5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB

81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1RV  Y  !  '$11$ <9211( %(1'(5   DQG'$9,' (  &8//,9(5    'HIHQGDQWV$SSHOODQWV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH0LGGOH'LVWULFWRI7HQQHVVHHDW1DVKYLOOH 1R n7RGGs&DPSEHOO'LVWULFWsXGJH $UJXHG $XJXVW 'HFLGHGDQG)LOHG 6HSWHPEHU %HIRUH &/$<*,/0$1DQG:$//$&(&LUFXLW sXGJHV

7KH +RQRUDEOH s &OLIIRUG :DOODFH &LUFXLW sXGJH RI WKH 8QLWHG 6WDWHV &RXUW RI $SSHDOV IRU WKH 1LQWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ

  8QLWHG6WDWHVY%HQGHUHWDO 1RV 

BBBBBBBBBBBBBBBBB &2816(/ $5*8(' 0DUN&6FUXJJV1DVKYLOOH7HQQHVVHH&0DUN 3LFNUHOO 1DVKYLOOH 7HQQHVVHH IRU $SSHOODQWV  :LOOLDP &RKHQ $66,67$17 81,7(' 67$7(6 $77251(< 1DVKYLOOH7HQQHVVHHIRU$SSHOOHH21%5,() 0DUN& 6FUXJJV1DVKYLOOH7HQQHVVHH&0DUN3LFNUHOO1DVKYLOOH 7HQQHVVHH IRU $SSHOODQWV  'DQLHO s 3HUU\ $66,67$17 81,7('67$7(6$77251(<1DVKYLOOH7HQQHVVHHIRU $SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 521$/'/((*,/0$1&LUFXLWs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jV FRQYLFWLRQ DQG VHQWHQFH DV ZHOO DV WKH VHQWHQFH LPSRVHGRQ&XOOLYHU 1RV  8QLWHG6WDWHVY%HQGHUHWDO 

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sRUGDQREWDLQHGDIHGHUDOVHDUFKZDUUDQW RQ)HEUXDU\ WRRSHQWKHSDUFHO2QFHRSHQHGWKH LQVSHFWRUVIRXQGDSDLURIPHQj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jV $SSUHQGL FODLP ([SUHVV0DLOSDUFHOQXPEHU(*867KLVVDPH EHFDXVHWKHFRGHIHQGDQWUDLVHGLWSURVHIRUWKHILUVWWLPHDIWHU ZRPDQDOVRWROGWKHVXSHUYLVRUWKDWVKHKDGLQTXLUHGDERXW RUDODUJXPHQW ,I&XOOLYHUZLVKHVWRSXUVXHDFKDOOHQJHWRKLV WKH GHOLYHU\ VWDWXV RI KHU SDFNDJH E\ FDOOLQJ WKH WROO IUHH VHQWHQFHEDVHGRQ$SSUHQGLKHZLOOKDYHWRGRVRE\ILOLQJD QXPEHUIRU([SUHVV0DLOLQIRUPDWLRQ SHWLWLRQIRUSRVWFRQYLFWLRQUHOLHIXQGHU86&† 2Q)HEUXDU\ DWDSSUR[LPDWHO\ SP3RVWDO ,,,&21&/86,21 ,QVSHFWRU:DOODFH%RZGHQGHOLYHUHGWKHSDUFHOWR)RUHVW 5LGJH 'ULYH +HUPLWDJH 7HQQHVVHH  'DQQD ( %HQGHU )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 DFFHSWHGWKHSDUFHODQGVLJQHGWKHGHOLYHU\VKHHWDVm'DQQD %HQGHUjV FRQYLFWLRQ DQG VHQWHQFH DV ZHOO DV WKH VHQWHQFH &XOOLYHUl  3ULRU WR WKH FRQWUROOHG GHOLYHU\ sRUGDQ KDG LPSRVHGRQ&XOOLYHU REWDLQHG D ZDUUDQW WR FRQGXFW D VHDUFK RI WKH UHFLSLHQWj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jV UHVLGHQFH  7KH\ IRXQG PDQ\ LWHPV LQGLFDWLYH RI QDUFRWLFV WUDIILFNLQJ,Q%HQGHUjVEHGURRPWKH\GLVFRYHUHGUHFHLSWV IURP PRQH\ WUDQVIHUV DQG FDU UHQWDOV D PLUURU ZLWK ZKLWH SRZGHURQLWDQGDEHDNHURQWKHGUHVVHU7KH\DOVRIRXQG WZR2UHRFRRNLHWLQV2QHWLQFRQWDLQHGVPDOOEDJJLHVDYLDO FRQWDLQLQJZKLWHSRZGHUPDULMXDQDDQGUD]RUEODGHV7KH RWKHUWLQFRQWDLQHGDVPDOOEDJRIFRFDLQHDVZHOODVYLDOV VWUDLQHUV PHDVXULQJ VSRRQV VFRRSV DQG PXOWLFRORUHG EDJJLHV$VKDYLQJNLWKHOGQXPHURXVWHVWWXEHVDQGEHDNHUV  8QLWHG6WDWHVY%HQGHUHWDO 1RV  1RV  8QLWHG6WDWHVY%HQGHUHWDO 

WKH FRPPLVVLRQ RI WKH RIIHQVH DV ORQJ DV LW FRQVWLWXWHV 0RVWRIWKHEHDNHUVFRQWDLQHGWUDFHVRIFRFDLQHDQG%HQGHUjV UHDVRQDEO\IRUHVHHDEOHFRQGXFWjl8QLWHG6WDWHVY1LFKROV ILQJHUSULQWVZHUHIRXQGRQRQHRIWKHP2QHEHDNHUWKDWZDV  )G WK&LU  DIIjG86   PLVVLQJIURPWKHFROOHFWLRQLQWKHVKDYLQJNLWZDVIRXQGRQ TXRWLQJ8QLWHG6WDWHVY:LOOLDPV )G WK %HQGHUjVGUHVVHU &LU  $OWKRXJKWKHUHLVQRFDVHRQSRLQWLQRXUFLUFXLW LQZKLFKDGHIHQGDQWKDVDUJXHGWKDWKHLQFRUUHFWO\UHFHLYHG 7KHDJHQWVDOVRIRXQGWZRKDQGJXQVLQWKHEHGURRPFORVHW D WZROHYHO HQKDQFHPHQW XQGHU 86 6HQWHQFLQJ *XLGHOLQH 2QHZDVORDGHGDQGIRXQGRQDVKHOILQWKHFORVHW WKHRWKHU † ' E   EHFDXVH KH ZDV LQ DQRWKHU VWDWH ZKHQ WKH ZDVIRXQGLQDEULHIFDVHRQWKHFORVHWIORRU7KHEULHIFDVH FRQVSLUDF\ ZDV XQFRYHUHG ZH GR QRW VHH KRZ &XOOLYHUjV EHORQJHGWR%HQGHUDQGFRQWDLQHGLPSRUWDQWIDPLO\SDSHUV VLWXDWLRQ LV OHJDOO\ GLVWLQJXLVKDEOH IURP DQ\ RWKHU 2WKHU LWHPV IRXQG LQ WKH UHVLGHQFH LQFOXGHG ([SUHVV 0DLO FRFRQVSLUDWRUZKRLVVKRZQWREHNQRZOHGJHDEOHDERXWWKH HQYHORSHVDQGSDFNDJHVDFRIIHHFDQZLWKDIDOVHERWWRPWZR SUHVHQFHRIWKHILUHDUPVEXWLVQRWSK\VLFDOO\RQWKHSUHPLVHV VFDOHVDQGWZRERWWOHVFRQWDLQLQJZKLWHSRZGHU ZKHUHSDUWRIWKHLOOHJDODFWLYLW\RFFXUUHG6HHLG 7KHDJHQWVPDLOHGVHYHUDOLWHPVIRXQGGXULQJWKHVHDUFKRI ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUWjV FRQFOXVLRQ WKDW %HQGHUjV UHVLGHQFH WR WKH 8QLWHG 6WDWHV 3RVWDO ,QVSHFWLRQ &XOOLYHUZDVLQFRQVWUXFWLYHSRVVHVVLRQRIDILUHDUPGXULQJD 6HUYLFH 1DWLRQDO )RUHQVLF /DERUDWRU\ LQ 'XOOHV 9LUJLQLD GUXJWUDIILFNLQJRIIHQVHLVVXSSRUWHGE\ERWKWKHMXU\jVYHUGLFW $IWHU FRQGXFWLQJ WHVWV WKH ODERUDWRU\ GHWHUPLQHG WKDW WKH DJDLQVWKLPIRUEHLQJDIHORQLQSRVVHVVLRQRIDILUHDUPDQG FRPSUHVVHGZKLWHSRZGHULQWKHVW\URIRDPSODWHZDV   WKHGLVWULFWFRXUWjVRZQIDFWXDOILQGLQJWKDWmWKHWZRILUHDUPV JUDPV RI FRFDLQH EDVH  ,Q DGGLWLRQ WKH ODERUDWRU\ IRXQG ZHUHFRQQHFWHGZLWKWKHRIIHQVHl:HWKHUHIRUHFRQFOXGHWKDW WUDFHV RI FRFDLQH RQ PHDVXULQJ VSRRQV IRXU EHDNHUV IRXU WKHGLVWULFWFRXUWGLGQRWHUULQHQKDQFLQJ&XOOLYHUjVVHQWHQFH JODVVWHVWWXEHVDQGVHYHUDORIWKHSODVWLFEDJJLHV XQGHU866HQWHQFLQJ*XLGHOLQH†' E   %HQGHUDQG&XOOLYHUKDGDQRQJRLQJUHODWLRQVKLSLQFOXGLQJ + &XOOLYHUjVEHODWHG$SSUHQGLDUJXPHQW WKHIDFWWKDW&XOOLYHUZDVWKHIDWKHURI%HQGHUjVVRQ%RWK %HQGHU DQG &XOOLYHU KDG SULRU IHORQ\ FRQYLFWLRQV  7KH )RU WKH ILUVW WLPH DW RUDO DUJXPHQW &XOOLYHUjV FRXQVHO JRYHUQPHQW SUHVHQWHG HYLGHQFH WKDW EHWZHHQ 'HFHPEHU  FODLPHGWKDW&XOOLYHUjVVHQWHQFHLVLQYDOLGDVDUHVXOWRIWKH  DQG)HEUXDU\ %HQGHUVHQW&XOOLYHUPRQH\ 6XSUHPH &RXUWjV GHFLVLRQ LQ$SSUHQGL Y 1HZ sHUVH\  ZLUHWUDQVIHUVWR)ORULGDWRWDOLQJ &XOOLYHUFODLPHG 86  &XOOLYHUjVFRXQVHOIDLOHGWRILOHDQ\ZULWWHQ WKDWWKHZLUHGPRQH\FDPHIURPKLVZRUNGRLQJFRQVWUXFWLRQ VWDWHPHQWUHJDUGLQJWKHPHULWVRIWKLVDUJXPHQW)XUWKHUPRUH MREV DQG VHOOLQJ 7VKLUWV  %HWZHHQ $XJXVW RI   DQG KHVLPSO\DQQRXQFHGDWRUDODUJXPHQWWKDW$SSUHQGLDIIHFWHG )HEUXDU\ RI    ([SUHVV 0DLO SDFNDJHV ZHUH VHQW WR &XOOLYHUjV VHQWHQFH ZLWKRXW SURYLGLQJ DQ\ OHJDO RU IDFWXDO &XOOLYHU DW WKUHH GLIIHUHQW DGGUHVVHV LQ WKH 1DVKYLOOH DUHD VXSSRUW IRU KLV SRVLWLRQ  7KH JRYHUQPHQW UHVSRQGHG WKDW &XOOLYHU FODLPHG WKDW WKHVH SDFNDJHV FRQWDLQHG 7VKLUWV RU &XOOLYHU KDG ZDLYHG WKH $SSUHQGL LVVXH EHFDXVH KH ZDV RWKHUJLIWV UDLVLQJLWIRUWKHILUVWWLPHDWRUDODUJXPHQW %HQGHU PDLQWDLQHG WKURXJKRXW KHU WULDO WKDW VKH ZDV QRW :HDJUHHZLWKWKHJRYHUQPHQWjVSRVLWLRQWKDW&XOOLYHUKDV JXLOW\RIGLVWULEXWLQJHLWKHUSRZGHUFRFDLQHRUFRFDLQHEDVH ZDLYHGDQ\$SSUHQGLFKDOOHQJHRQGLUHFWDSSHDODQGZHZLOO 6KHWZLFHVWDWHGRQGLUHFWH[DPLQDWLRQWKDWVKHKDGQHYHUVROG WKHUHIRUH QRW DGGUHVV WKLV LVVXH  6HH 8QLWHG 6WDWHV Y GUXJVEXWKDGEHFRPHDGGLFWHGWRGUXJVLQ GXHWRVWUHVV 9DQDPDQ1RV      %HQGHU WHVWLILHG WKDW VKH VPRNHG FUDFNODFHG PDULMXDQD :/   DW  WK &LU $SU    XQSXEOLVKHG FLJDUHWWHVDQGWKDWGXULQJWKHFRXUVHRIDZHHNVKHZRXOGXVH  8QLWHG6WDWHVY%HQGHUHWDO 1RV  1RV  8QLWHG6WDWHVY%HQGHUHWDO 

DSSUR[LPDWHO\RQHRXQFHRIPDULMXDQDDQGILYHWRWHQJUDPV GHIHQGDQWDFWXDOO\RUFRQVWUXFWLYHO\µSRVVHVVHGjWKHZHDSRQ RISRZGHUFRFDLQH6KHDOVRVWDWHGWKDWVKHSXUFKDVHGGUXJV DQG  VXFKSRVVHVVLRQZDVGXULQJWKHFRPPLVVLRQRIWKH ZLWKPRQH\WUDQVIHUUHGIURP&XOOLYHU5HJDUGLQJWKHHYHQWV RIIHQVHl+LOO )GDW&RQVWUXFWLYHSRVVHVVLRQRID WKDWRFFXUUHGRQWKHGD\RIKHUDUUHVW%HQGHUFRQWHQGVWKDW ILUHDUPRFFXUVZKHQWKHGHIHQGDQWKDV VKH QHYHU RSHQHG WKH SDUFHO WKDW VKH VLJQHG IRU  6KH DOVR WHVWLILHGWKDWWKHLWHPVRIGUXJSDUDSKHUQDOLDWKDWZHUHVHL]HG WKH RZQHUVKLS RU GRPLQLRQ RU FRQWURO RYHU WKH LWHP EHORQJHGWR:DOWHU%DLOH\&XOOLYHUKHUFRGHIHQGDQWj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†   XQODZIXOXVHRIDFRPPXQLFDWLRQIDFLOLW\ XSKROG WKH GLVWULFW FRXUWjV IDFWXDO ILQGLQJV XQOHVV WKH\ DUH LQDGUXJIHORQ\RUDLGLQJDQGDEHWWLQJWKHXQODZIXOXVHRID FOHDUO\HUURQHRXV6HH+LOO )GDW FRPPXQLFDWLRQIDFLOLW\LQYLRODWLRQRI86&† E DQG  86& †     SRVVHVVLRQ ZLWK LQWHQW WR GLVWULEXWH %HQGHUDQG&XOOLYHUVKDUHGWKHKRXVHDQGWKHEHGURRPDW FRFDLQH EDVH LQ YLRODWLRQ RI  86& †  D   DQG   )RUHVW 5LGJH 'ULYH LQ +HUPLWDJH 7HQQHVVHH HYHQ 86&†   SRVVHVVLRQZLWKLQWHQWWRGLVWULEXWHSRZGHU WKRXJK&XOOLYHUVSOLWKLVWLPHEHWZHHQ7HQQHVVHHDQG)ORULGD FRFDLQHLQYLRODWLRQRI86&† D  DQG86& ,WZDVXQFRQWURYHUWHGDWWULDOWKDWWZRKDQGJXQVZHUHIRXQG † DQG  EHLQJDFRQYLFWHGIHORQLQSRVVHVVLRQRIDILUHDUP LQWKHEHGURRPFORVHWDQGWKDWYDULRXVGUXJSDUDSKHUQDOLD LQ YLRODWLRQ RI  86& †  J    7KH GLVWULFW FRXUW ZDVSUHVHQWLQWKHEHGURRP%HQGHUWHVWLILHGWKDW&XOOLYHU RUGHUHG WKDW WKH FKDUJHV DJDLQVW %HQGHU DQG &XOOLYHU EH RZQHGWKHORDGHGKDQGJXQWKDWZDVIRXQGRQWKHVKHOILQWKH FRQVROLGDWHG IRU WULDO IROORZLQJ &XOOLYHUj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m7KLVFRXUWKDV  PRQWKV RQ &RXQW  WR UXQ FRQFXUUHQWO\  &XOOLYHU ZDV FRQVLVWHQWO\KHOGWKDWSRVVHVVLRQRIDILUHDUPXQGHUVHFWLRQ ' E  µLVDWWULEXWDEOHWRDFRFRQVSLUDWRUQRWSUHVHQWDW  8QLWHG6WDWHVY%HQGHUHWDO 1RV  1RV  8QLWHG6WDWHVY%HQGHUHWDO 

7KH GLVWULFW FRXUW KHDUG ERWK SURRI DQG DUJXPHQW DW WKH VHQWHQFHGWRPRQWKVRQ&RXQWVDQG PRQWKVRQ VHQWHQFLQJKHDULQJUHJDUGLQJWKHTXDQWLW\RIFRFDLQHEDVHWKDW &RXQWDQGPRQWKVRQ&RXQWWRUXQFRQFXUUHQWO\ ZDV FRQWDLQHG LQ WKH SDUFHO  6XFK D KHDULQJ ZDV UHTXLUHG %HQGHUDQG&XOOLYHUERWKILOHGWLPHO\DSSHDOV EHFDXVH&XOOLYHUKDGREMHFWHGWRWKHTXDQWLW\RIJUDPV WKDWZDVXVHGLQWKH3UHVHQWHQFH,QYHVWLJDWLRQ5HSRUW6HH ,,$1$/<6,6 )HG5&ULP3 F *LYHQWKHVZRUQWHVWLPRQ\RIsRUGDQ DQG WKH FRUURERUDWLRQ E\ WKH RWKHU SRVWDO LQVSHFWRUV ZKR $ 7KHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJ%HQGHUjV SDUWLFLSDWHG LQ WKH LQWHUFHSWLRQ DQG VHDUFK RI WKH SDUFHO PRWLRQWRVXSSUHVV GHVWLQHGIRU%HQGHUjVUHVLGHQFHZHFRQFOXGHWKDWWKHGLVWULFW FRXUWjVIDFWXDOILQGLQJWKDW&XOOLYHUZDVUHVSRQVLEOHIRU %HQGHUDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQIDLOLQJWRJUDQW JUDPVRIFRFDLQHEDVHZDVQRWFOHDUO\HUURQHRXV6HH8QLWHG KHUPRWLRQWRVXSSUHVVWKHHYLGHQFHWKDWZDVVHL]HGIURPKHU 6WDWHVY+LOO )G WK&LU   GHFODULQJ UHVLGHQFHRQ)HEUXDU\ 6KHFRQWHQGVWKDWSUREDEOH WKDWWKHGLVWULFWFRXUWjVIDFWXDOILQGLQJVZLOOEHXSKHOGXQOHVV FDXVHWRVHDUFKKHUUHVLGHQFHZDVODFNLQJDQGWKDWWKHZDUUDQW WKH\DUHFOHDUO\HUURQHRXV 7KHGLVWULFWFRXUWZDVWKHUHIRUH ZDVLPSURSHUO\H[HFXWHGEHFDXVHWKHODZHQIRUFHPHQWDJHQWV FRUUHFW LQ DVVLJQLQJ &XOOLYHU D EDVH RIIHQVH OHYHO RI  HQWHUHGKHUKRPHDIWHUVKHDFFHSWHGWKHSDFNDJHEXWEHIRUH EHFDXVHKHZDVUHVSRQVLEOHIRURYHUJUDPVRIFRFDLQHEDVH VKHRSHQHGLW XQGHU † ' F   RI WKH 8QLWHG 6WDWHV 6HQWHQFLQJ *XLGHOLQHV :KHQ UHYLHZLQJ GHFLVLRQV RQ PRWLRQV WR VXSSUHVV HYLGHQFHZHZLOOQRWGLVWXUEIDFWXDOILQGLQJVXQOHVVWKH\DUH * 7KH GLVWULFW FRXUW GLG QRW HUU LQ VHQWHQFLQJ FOHDUO\HUURQHRXV6HH8QLWHG6WDWHVY6PLWK)G &XOOLYHUIRUSRVVHVVLQJDILUHDUPLQFRQQHFWLRQ  WK&LU :HUHYLHZOHJDOFRQFOXVLRQVGHQRYR ZLWKDGUXJWUDIILFNLQJRIIHQVH 6HH LG  $ PDJLVWUDWH MXGJHjV GHFLVLRQ WR LVVXH D VHDUFK ZDUUDQWmLVWREHDFFRUGHGJUHDWGHIHUHQFHE\WKHUHYLHZLQJ &XOOLYHUDOVRFKDOOHQJHVWKHGLVWULFWFRXUWjVGHWHUPLQDWLRQ FRXUWl8QLWHG6WDWHVY/DZVRQ )G   WK&LU WKDW &XOOLYHUjV EDVH RIIHQVH OHYHO VKRXOG EH LQFUHDVHG    FLWDWLRQDQGLQWHUQDOTXRWDWLRQPDUNVRPLWWHG  SXUVXDQW WR † ' E   RI WKH 8QLWHG 6WDWHV 6HQWHQFLQJ *XLGHOLQHV7KLV*XLGHOLQHFDOOVIRUDWZROHYHOLQFUHDVHm>L@I :HKROGWKDWWKHUHZDVSUREDEOHFDXVHWRLVVXHWKHVHDUFK D GDQJHURXV ZHDSRQ LQFOXGLQJ D ILUHDUP  ZDV SRVVHVVHGl ZDUUDQWLQTXHVWLRQ7KLVFDVHUHSUHVHQWVDW\SLFDOFRQWUROOHG GXULQJWKHXQODZIXOPDQXIDFWXULQJLPSRUWLQJH[SRUWLQJRU GHOLYHU\ GUXJ EXVW  3RVWDO ,QVSHFWRU sRUGDQjV DIILGDYLW LQ WUDIILFNLQJ RI D FRQWUROOHG VXEVWDQFH  $SSOLFDWLRQ QRWH  VXSSRUWRIWKHVHDUFKZDUUDQWFRQWDLQVVXIILFLHQWLQIRUPDWLRQ IXUWKHUVWDWHVWKDWWKH†' E  DGMXVWPHQWmVKRXOGEH WRPDNHLWSUREDEOHWKDWmDVHDUFKZRXOGXQFRYHUHYLGHQFHRI DSSOLHG LI WKH ZHDSRQ ZDV SUHVHQW XQOHVV LW LV FOHDUO\ ZURQJGRLQJl6PLWK)GDW FLWLQJ,OOLQRLVY*DWHV LPSUREDEOHWKDWWKHZHDSRQZDVFRQQHFWHGZLWKWKHRIIHQVHl  86       7KH REVHUYHG IUHTXHQF\ RI 8QLWHG6WDWHV6HQWHQFLQJ*XLGHOLQHV0DQXDO†'FPW ([SUHVV 0DLO GUXJ GHOLYHULHV EHWZHHQ )ORULGD DQG WKH Q  &XOOLYHU DUJXHV WKDW EHFDXVH KH ZDV LQ )ORULGD WKH 1DVKYLOOH DUHD WKH SRVLWLYH LGHQWLILFDWLRQ RI D FRQWUROOHG ZHDSRQ ZDV QRW SUHVHQW DW WKH ORFDWLRQ ZKHUH KH ZDV VXEVWDQFH E\ D GUXJGHWHFWLRQ GRJ DQG WKH GLVFRYHU\ RI FRPPLWWLQJWKHRIIHQVH DSSUR[LPDWHO\JUDPVRIFRFDLQHEDVHLQWKH([SUHVV0DLO SDFNDJHDOOVXSSRUWHGWKHLVVXDQFHRIDQDQWLFLSDWRU\VHDUFK )RU D FRXUW WR LPSRVH D VHQWHQFH HQKDQFHPHQW XQGHU ZDUUDQW6HH/DZVRQ )G  KROGLQJWKDWWKHUH †' E  mWKHJRYHUQPHQWPXVWHVWDEOLVKWKDW  WKH ZDVSUREDEOHFDXVHWRLVVXHDQDQWLFLSDWRU\VHDUFKZDUUDQWLQ D VLPLODU FRQWUROOHGGHOLYHU\ GUXJ FDVH ZKHUH SRVWDO  8QLWHG6WDWHVY%HQGHUHWDO 1RV  1RV  8QLWHG6WDWHVY%HQGHUHWDO 

LQVSHFWRUVLQWHUFHSWHGDQ([SUHVV0DLOSDFNDJHDQGGHWHFWHG ZLUHWUDQVIHUVWR)ORULGDWKDWWRWDOHG RYHUWKHFRXUVHRI QDUFRWLFV  WZR DQG D KDOI PRQWKV  7KH GUXJ SDUDSKHUQDOLD IRXQG DW %HQGHUjVUHVLGHQFHDOVRVWURQJO\LQGLFDWHGWKDW%HQGHUZDV )XUWKHUPRUHZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUU HQJDJHGLQWKHVDOHDQGGLVWULEXWLRQRIFRFDLQHEDVHDVGLGWKH LQGHQ\LQJ%HQGHUj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jV EHG ZKHQ WKH\ ILUVW HQWHUHG WKH &XOOLYHUEDVHGRQWKHGLVWULEXWLRQRIJUDPV EHGURRP,QDQ\HYHQWWKHVHDUFKZDUUDQWGLGQRWUHTXLUHWKDW RIFRFDLQHEDVH WKH WUDQVPLWWHU EH DFWLYDWHG LQ RUGHU WR FRQGXFW D GD\WLPH VHDUFK7KHVHDUFKZDUUDQWDGRSWHGWKHFRQGLWLRQVVHWIRUWK &XOOLYHUFKDOOHQJHVKLVVHQWHQFHE\DUJXLQJWKDWWKHGLVWULFW LQWKHDIILGDYLWRI3RVWDO,QVSHFWRUsRUGDQsRUGDQjVDIILGDYLW FRXUW HUUHG LQ KROGLQJ KLP UHVSRQVLEOH IRU FRQVSLULQJ WR GHVFULEHGWKHIROORZLQJSDUDPHWHUVWRHIIHFWXDWHWKHVHDUFK GLVWULEXWHDQGIRUGLVWULEXWLQJJUDPVRIFRFDLQHEDVH+H FODLPVWKDWWKHJRYHUQPHQWj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jVUHVLGHQFH3RVWDO,QVSHFWRU0D[sRUGDQ (PSKDVLVDGGHG VWDWHG WKDW WKH SDUFHO FRQWDLQHG D FRRNLHVKDSHG VXEVWDQFH WKDWFRQVWLWXWHGDSSUR[LPDWHO\JUDPVRIFRFDLQHEDVH %DVHGRQWKHFRQGLWLRQVGHVFULEHGDERYHLWLVFOHDUWKDWDV sRUGDQIXUWKHUUHSUHVHQWHGXQGHURDWKWKDWWKHVFDOHXVHGRQ ORQJ DV WKH SRVWDO LQVSHFWRUV DQG HQWU\ WHDP H[HFXWHG WKH VLWHWRZHLJKWKHVXEVWDQFHZDVUHOLDEOHDQGDFFXUDWH7KH VHDUFK ZDUUDQW GXULQJ WKH GD\WLPH WKH SUHUHTXLVLWH IRU WKH SRVWDO LQVSHFWRUV UHWDLQHG D VDPSOH RI WKH FRFDLQH EDVH WR HQWU\ ZDV VLPSO\ WKH VLJQLQJ RI WKH GHOLYHU\ UHFHLSW UHSDFNDJHLQWKHSDUFHOIRUWKHFRQWUROOHGGHOLYHU\sRUGDQ DFFHSWDQFHRIWKHSDUFHODQGWKHWDNLQJRIWKHSDUFHOLQWRWKH DOVRWHVWLILHGDWWKHVHQWHQFLQJKHDULQJWKDWWKUHHVDPSOHVZHUH UHVLGHQFH%HFDXVHWKHVHFRQGLWLRQVZHUHPHWWKHZDUUDQW H[WUDFWHG IURP WKH FRFDLQH EDVH FRRNLH IRU WKH SXUSRVH RI ZDV SURSHUO\ H[HFXWHG DQG WKH GLVWULFW FRXUW GLG QRW HUU LQ FRQGXFWLQJWKHILHOGWHVWWRGHWHUPLQHWKHVXEVWDQFH$VD GHQ\LQJ%HQGHUjVPRWLRQWRVXSSUHVV UHVXOWWKHVDPSOHWKDWZDVVHQWWRWKHODERUDWRU\ JUDPV RIFRFDLQHEDVHZDVQRWWKHIXOODPRXQWRIFRFDLQHEDVHWKDW ZDVRULJLQDOO\FRQWDLQHGLQWKHSDUFHO  8QLWHG6WDWHVY%HQGHUHWDO 1RV  1RV  8QLWHG6WDWHVY%HQGHUHWDO

7KH6XSUHPH&RXUWKDVKHOGWKDWm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mWKHGLVWULFWFRXUWGLGQRWHUULQUHIXVLQJ QDWXUHRIKHUSULRUFRQYLFWLRQ6KHZDVFRQYLFWHGLQ RI WRSHUPLW>WKHFULPLQDOGHIHQGDQW@WRDUJXHDERXWKLVSRVVLEOH FRQVSLUDF\WRGLVWULEXWHSRZGHUFRFDLQHDQGSRVVHVVLRQZLWK SXQLVKPHQWl  8QLWHG 6WDWHV Y &KHVQH\  )G   LQWHQWWRGLVWULEXWHWKHGUXJ:HZLOOQRWGLVWXUEDGLVWULFW WK&LU  *LYHQWKLVSUHFHGHQWZHVLPLODUO\FRQFOXGH FRXUWjVDGPLVVLRQRIWHVWLPRQ\UHJDUGLQJDGHIHQGDQWjVSULRU WKDW WKH GLVWULFW FRXUW GLG QRW HUU LQ SURKLELWLQJ %HQGHUjV FRQYLFWLRQIRULPSHDFKPHQWSXUSRVHVXQOHVVZHFRQFOXGHWKDW FRXQVHOIURPPHQWLRQLQJ%HQGHUjVSRVVLEOHSXQLVKPHQWWRWKH WKHUHZDVDQDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVY0H\HUV MXU\ )G   WK&LU   ( 7KHHYLGHQFHZDVVXIILFLHQWWRVXSSRUWWKHMXU\jV 3ULRUWRWULDOWKHGLVWULFWFRXUWFRQVLGHUHGZKHWKHU%HQGHUjV JXLOW\YHUGLFWDJDLQVW%HQGHU SULRU FRQYLFWLRQ FRXOG EH LQWURGXFHG IRU WKH SXUSRVH RI LPSHDFKLQJ KHU FUHGLELOLW\ XQGHU 5XOH   RI WKH )HGHUDO )LQDOO\%HQGHUVXEPLWVWKDWWKHHYLGHQFHZDVLQVXIILFLHQW 5XOHVRI(YLGHQFH%RWKSDUWLHVDJUHHGWRVWLSXODWHWRWKHIDFW WRVXSSRUWWKHMXU\jVYHUGLFWWKDWVKHZDVJXLOW\RQDOOILYH WKDW %HQGHU ZDV FRQYLFWHG RI D IHORQ\ LQ   LQ OLHX RI FRXQWV:HUHYLHZFODLPVRILQVXIILFLHQF\RIWKHHYLGHQFHE\ UHTXLULQJWKHJRYHUQPHQWWRLQWURGXFHHYLGHQFHRIWKHSULRU DVNLQJmZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKHOLJKWPRVW FRQYLFWLRQLQVXSSRUWRI&RXQW EHLQJDIHORQLQSRVVHVVLRQ IDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOG RIDILUHDUP %H\RQGWKHVWLSXODWLRQWKHGLVWULFWFRXUWDJUHHG KDYH IRXQG WKH HVVHQWLDO HOHPHQWV RI WKH FULPH EH\RQG D WR mOLPLW WKH FURVVH[DPLQDWLRQ >RI %HQGHU@ WR HVVHQWLDOO\ UHDVRQDEOHGRXEWl8QLWHG6WDWHVY$EOHV)G UHSHDWLQJWKHVWLSXODWLRQWKDWWKHUHLVDFRQYLFWLRQDQGJHWWLQJ  WK &LU   FLWLQJsDFNVRQ Y 9LUJLQLD  86 KHUWRFRQILUPVKHDJUHHGWRLWl1HYHUWKHOHVVWKHGLVWULFW       HPSKDVLV LQ RULJLQDO   )XUWKHUPRUH FRXUWJDYHWKHIROORZLQJZDUQLQJ m>F@LUFXPVWDQWLDO HYLGHQFH LV VXIILFLHQW WR VXVWDLQ D FRQYLFWLRQl,G >,@WLVDOZD\VRIFRQFHUQWRPHDQGWKHFRXUWWKDWWKHMXU\ QRWEHPLVOHG6RLIRQGLUHFWH[DPLQDWLRQ0V%HQGHU %HQGHUPDLQWDLQVWKDWmWKHHYLGHQFHSUHVHQWHGWRWKHMXU\ DIILUPDWLYHO\GHQLHGNQRZOHGJHRIGUXJVDQGRWKHUZLVH LVVLPSO\WKDWRI'DQQD%HQGHUEHLQJDGUXJDGGLFWXVHUZKR VHWVXSVRPHWKLQJFRQWUDU\WRWKHREYLRXVWKHQVKHZLOO UHFHLYHGDSDFNDJHWKDWFRQWDLQHGDUHODWLYHO\VPDOODPRXQW EHRSHQLQJWKHGRRUDQGVKHFDQPDNHWKHQDWXUHRIWKH RI FUDFN FRFDLQH RQ )HEUXDU\   l DQG WKDW WKH FRQYLFWLRQPRUHSUREDWLYHWKDQLWRWKHUZLVHLVE\RSHQLQJ HYLGHQFHWKHUHIRUHGRHVQRWVXSSRUWDQLQIHUHQFHWKDW%HQGHU WKHGRRU7KHQ,ZLOODOORZWKHJRYHUQPHQWWRJHWLQWR ZDV HQJDJHG LQ WKH WUDQVSRUWDWLRQ UHFHLSW RU VDOH RI D ZKDWWKHQDWXUHRIWKHFRQYLFWLRQLV FRQWUROOHGVXEVWDQFH+HUSRVLWLRQLVXQWHQDEOHLQOLJKWRIWKH HYLGHQFHWKDWZDVSUHVHQWHGDWWULDO$VDUHVXOWRIVHDUFKLQJ 'HVSLWH WKLV ZDUQLQJ %HQGHU WHVWLILHG RQ WZR GLIIHUHQW %HQGHUjV UHVLGHQFH WKH JRYHUQPHQW SUHVHQWHG FRQYLQFLQJ RFFDVLRQVGXULQJGLUHFWH[DPLQDWLRQWKDWVKHKDGQHYHUVROG HYLGHQFHWKDW%HQGHUKDGUHFHLYHGQXPHURXVSDFNDJHVVHQWE\ GUXJV  6KH DOVR DVVHUWHG WKDW VKH mEHJDQ XVLQJ GUXJV LQ &XOOLYHUIURP)ORULGDDQGWKDWVKHKDGVHQWPXOWLSOHPRQH\  l7KHGLVWULFWFRXUWFRQFOXGHGWKDWWKHVHVWDWHPHQWVE\ %HQGHUZHUHPLVOHDGLQJ,WWKHUHIRUHDOORZHGWKHJRYHUQPHQW  8QLWHG6WDWHVY%HQGHUHWDO 1RV  1RV  8QLWHG6WDWHVY%HQGHUHWDO 

WR EULQJ RXW RQ FURVVH[DPLQDWLRQ WKH QDWXUH RI KHU SULRU HQIRUFHPHQW WHDP WKDW H[HFXWHG WKH VHDUFK ZDUUDQW DW FRQYLFWLRQLQRUGHUWRLPSHDFKKHUFUHGLELOLW\DVDZLWQHVV %HQGHUjV UHVLGHQFH RQ )HEUXDU\     +H UHFRYHUHG m>:@KHQDSDUW\RSHQVXSDVXEMHFW>WKHSDUW\@FDQQRW VHYHUDO LWHPV IURP %HQGHUjV EHGURRP LQFOXGLQJ WKH FRPSODLQRQDSSHDOLIWKHRSSRVLQJSDUW\LQWURGXFHVHYLGHQFH SDSHUZRUNGHWDLOLQJWKHPRQH\WUDQVIHUVDQGWKHFRRNLHWLQV RQWKHVDPHVXEMHFWl8QLWHG6WDWHVY5DPRV)G DQGVKDYLQJNLWWKDWFRQWDLQHGGUXJSDUDSKHUQDOLD   WK&LU   %HQGHUDUJXHVWKDW'RQHJDQmZDVQRWSURSHUO\TXDOLILHGDV :H FRQFOXGH WKDW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV DQH[SHUWZLWQHVVLQWKDWKHKDGOLWWOHLIDQ\GLUHFWH[SHULHQFH GLVFUHWLRQLQDOORZLQJWKHJRYHUQPHQWWRLPSHDFK%HQGHUjV ZLWKWKHVDOHDQGGLVWULEXWLRQRIFUDFNFRFDLQHl$GLVWULFW FUHGLELOLW\ZLWKHYLGHQFHRIKHUSULRUFRQYLFWLRQ%HQGHUjV FRXUWj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mKDV DOORZHG SROLFH %HQGHUjV SULRU FRQYLFWLRQ LQWR FRQVLGHUDWLRQ RQO\ IRU WKH RIILFHUVWRWHVWLI\DVH[SHUWZLWQHVVHVDERXWFULPLQDODFWLYLW\ SXUSRVHVRIHYDOXDWLQJKHUFUHGLELOLW\DQGIRUHVWDEOLVKLQJKHU VLQFH NQRZOHGJH RI VXFK DFWLYLW\ LV JHQHUDOO\ EH\RQG WKH JXLOWRQ&RXQW7KHGLVWULFWFRXUWWKXVSURSHUO\DOORZHGWKH XQGHUVWDQGLQJ RI WKH DYHUDJH OD\PDQl  8QLWHG 6WDWHV Y JRYHUQPHQWWRXVH%HQGHUjVSULRUFRQYLFWLRQWRLPSHDFKKHU 7KRPDV  )G   WK &LU    FLWDWLRQ DQG FUHGLELOLW\EXWPLQLPL]HGDQ\SUHMXGLFLDOHIIHFWE\SURYLGLQJ LQWHUQDOTXRWDWLRQPDUNVRPLWWHG )XUWKHUPRUHZHKDYHKHOG OLPLWLQJLQVWUXFWLRQVWRWKHMXU\6HH8QLWHG6WDWHVY*DLWDQ WKDWVXFKH[SHUWWHVWLPRQ\E\SROLFHRIILFHUVLVQRWXQIDLUO\ $FHYHGR)G   WK&LU   ILQGLQJQR SUHMXGLFLDO SDUWLFXODUO\ ZKHQ WKH GLVWULFW FRXUW SURYLGHV DEXVHRIGLVFUHWLRQZKHUHWKHGLVWULFWFRXUWDOORZHGHYLGHQFH FDXWLRQDU\LQVWUXFWLRQVWRWKHMXU\6HHLGDW7KHGLVWULFW RI WKH GHIHQGDQWjV SULRU GUXJ FRQYLFWLRQ XQGHU VLPLODU FRXUWJDYHVXFKFDXWLRQDU\LQVWUXFWLRQVLQWKHSUHVHQWFDVH,Q FLUFXPVWDQFHV  VXP WKH GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ SHUPLWWLQJ 'RQHJDQ WR WHVWLI\ DV DQ H[SHUW ZLWQHVV DQG & 7KHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ %HQGHU VXIIHUHG QR XQIDLU SUHMXGLFH DV D UHVXOW RI VXFK DOORZLQJ2IILFHU'RQHJDQWRWHVWLI\DVDQH[SHUW WHVWLPRQ\ ZLWQHVV ' 7KH GLVWULFW FRXUW GLG QRW HUU LQ SURKLELWLQJ %HQGHU IXUWKHU DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ %HQGHU IURP LQIRUPLQJ WKH MXU\ RI WKH DOORZLQJ2IILFHUsRKQ'RQHJDQWRWHVWLI\DVDQH[SHUWZLWQHVV PDQGDWRU\PLQLPXPVHQWHQFHWKDW%HQGHUZRXOG RQWKHQDWXUHRIWKHGUXJWUDIILFNLQJEXVLQHVV'RQHJDQKDG IDFHLIFRQYLFWHG EHHQ D SROLFH RIILFHU ZLWK WKH 1DVKYLOOH 0HWUR 3ROLFH 'HSDUWPHQWIRU\HDUVDQGDPHPEHURIWKH9LFH1DUFRWLFV %HQGHUDOVRDUJXHVWKDWVKHZDVGHQLHGGXHSURFHVVZKHQ 'LYLVLRQIRU RIWKRVH\HDUVDWWKHWLPHRI%HQGHUjVWULDO+H WKHGLVWULFWFRXUWSURKLELWHGKHUFRXQVHOIURPPHQWLRQLQJWKH KDG UHFHLYHG H[WHQVLYH WUDLQLQJ LQ GUXJ FULPHV DQG GUXJ PDQGDWRU\PLQLPXPVHQWHQFHWKDW%HQGHUZRXOGUHFHLYHLI WUDIILFNLQJDQGKDGHYHQWDXJKWFODVVHVRQGUXJHQIRUFHPHQW VKHZHUHFRQYLFWHG:HUHYLHZFRQFOXVLRQVRIODZGHQRYR DQG GUXJ LQWHUGLFWLRQ  'RQHJDQ ZDV D PHPEHU RI WKH ODZ 6HH8QLWHG6WDWHVY.LQJ)G  WK&LU