5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  8QLWHG6WDWHVY&KDYLV 1R  3XUVXDQW WR 6L[WK &LUFXLW 5XOH  (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU †(FRPPHQWDU\DSSOLFQRWH D +DYLQJGHWHUPLQHG )LOH 1DPH DS WKDW&KDYLVZDVUHVSRQVLEOHIRUERWKKDQGJXQVWKHGLVWULFW FRXUWFRXOGUHDVRQDEO\FRQFOXGHWKDW&KDYLVmIDOVHO\GHQLHGl WKLVUHOHYDQWFRQGXFWDQGKDGmDFWHGLQDPDQQHULQFRQVLVWHQW 81,7('67$7(6&28572)$33($/6 ZLWKDFFHSWDQFHRIUHVSRQVLELOLW\>@l*LYHQWKHGHIHUHQFHGXH )257+(6,;7+&,5&8,7 WR GLVWULFW FRXUW GHWHUPLQDWLRQV FRQFHUQLQJ DFFHSWDQFH RI BBBBBBBBBBBBBBBBB UHVSRQVLELOLW\866*†(FRPPHQWDSSOLFQRWHZH FDQQRW VD\ WKDW WKLV FRQFOXVLRQ ZDV LQ HUURU  (YHQ LI DFFHSWDQFH RI UHVSRQVLELOLW\ ZHUH FRQVLGHUHG LQ UHODWLRQ WR HDFKRIIHQVHLQGHSHQGHQWO\WKHUHIRUH&KDYLVZRXOGQRWEH 81,7(' 67$7(6 2) $0(5,&$ ; HQWLWOHGWRDQ\UHGXFWLRQ&RQVHTXHQWO\ZHFRQFOXGHWKDWWKH 3ODLQWLII$SSHOOHH  GLVWULFW FRXUW GLG QRW HUU LQ GHQ\LQJ &KDYLVjV UHTXHVW IRU D  WZROHYHO UHGXFWLRQ EDVHG XSRQ SDUWLDO DFFHSWDQFH RI  1R  UHVSRQVLELOLW\ Y  !  ,,,&21&/86,21 s(5(0< /(( &+$9,6  'HIHQGDQW$SSHOODQW  %DVHG XSRQ WKH IRUHJRLQJ UHDVRQV ZH $)),50 WKH 1 GHFLVLRQRIWKHGLVWULFWFRXUW $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV 1R n$OJHQRQ/0DUEOH\'LVWULFWsXGJH 6XEPLWWHG $SULO 'HFLGHGDQG)LOHG sXO\ %HIRUH '$8*+75(<DQG0225(&LUFXLWsXGJHV 6,03621'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ 21%5,() /DUU\:D\QH7KRPDV7+20$6 ',;21 &ROXPEXV 2KLR IRU $SSHOODQW  0LFKDHO s %XUQV

7KH +RQRUDEOH &KDUOHV 5 6LPSVRQ ,,, 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ

  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  $66,67$1781,7('67$7(6$77251(<&ROXPEXV WKHKDQGJXQQRUGLGKHDFFHSWUHVSRQVLELOLW\IRUWKHDPRXQW 2KLRIRU$SSHOOHH RIFRFDLQHls$DW 6HQWHQFLQJ7UDW  BBBBBBBBBBBBBBBBB 1RUPDOO\&KDYLVjVGHQLDORIWKHFUDFNFRFDLQHFKDUJHDORQH ZRXOGUHQGHUKLPLQHOLJLEOHIRUDFFHSWDQFHRIUHVSRQVLELOLW\ 23,1,21 FUHGLW  :H KDYH SUHYLRXVO\ KHOG WKDW mD GHIHQGDQW PXVW BBBBBBBBBBBBBBBBB DFFHSWUHVSRQVLELOLW\IRUDOOFRXQWVEHIRUHKHLVHQWLWOHGWRD UHGXFWLRQ LQ VHQWHQFH IRU DFFHSWDQFH RI UHVSRQVLELOLW\l .$5(1 1(/621 0225( &LUFXLW sXGJH  7KH 8QLWHG6WDWHVY&KDPEHUV )G WK&LU  GHIHQGDQW sHUHP\ &KDYLV DSSHDOV KLV FRQYLFWLRQ DQG m7KLV FRQFOXVLRQ LV GLUHFWO\ VXSSRUWHG E\ WKH 6HQWHQFLQJ VHQWHQFH IRU RQH FRXQW RI FDXVLQJ DQRWKHU SHUVRQ WR PDNH *XLGHOLQHV DV 866* † % GLUHFWV FRXUWV WR JURXS IDOVHVWDWHPHQWVWRDIHGHUDOO\OLFHQVHGILUHDUPVGHDOHUDQG FRQYLFWLRQVSULRUWRDSSO\LQJDQDGMXVWPHQWIRUDFFHSWDQFHRI RQHFRXQWRIVLPSOHSRVVHVVLRQRILQH[FHVVRIILYHJUDPVRI UHVSRQVLELOLW\l,GDW 7KLVUXOHGRHVQRWDSSO\LQWKH FRFDLQH EDVH  2Q DSSHDO &KDYLV FRQWHQGV     WKDW WKH LQVWDQW FDVH KRZHYHU VLQFH WKH FRXQWV RI FRQYLFWLRQ ZHUH HYLGHQFHZDVLQVXIILFLHQWWRVXSSRUWWKHMXU\jVYHUGLFWRIJXLOW LPSURSHUO\MRLQHG:HWKLQN&KDYLVVKRXOGQRWEHKHOGWRD DV WR WKH GUXJ RIIHQVH   WKDW WKH GLVWULFW FRXUW HUUHG LQ KLJKHUVWDQGDUGWKDQKHZRXOGKDYHEHHQKDGWKHWZRFULPHV GHQ\LQJ KLV PRWLRQ WR VHYHU WKH WZR FRXQWV RI FRQYLFWLRQ EHHQ SURSHUO\ VHYHUHG  %HFDXVH WKH MRLQW WULDO RI WKH WZR SXUVXDQWWR)HGHUDO5XOHRI&ULPLQDO3URFHGXUH D   WKDW RIIHQVHVZDVLPSURSHUWKHUHIRUH&KDYLVZDVQRWREOLJHGWR WKH GLVWULFW FRXUW HUUHG LQ GHWHUPLQLQJ &KDYLVjV UHOHYDQW DFFHSWUHVSRQVLELOLW\IRUERWKRIIHQVHVLQRUGHUWRTXDOLI\IRU FRQGXFW IRU WKH SXUSRVHV RI VHQWHQFLQJ DQG   WKDW WKH WKHDGMXVWPHQW GLVWULFW FRXUW HUUHG LQ UHIXVLQJ WR DSSO\ D GRZQZDUG DGMXVWPHQWWR&KDYLVjVVHQWHQFHIRUKLVSDUWLDODFFHSWDQFHRI 1HYHUWKHOHVVZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUU UHVSRQVLELOLW\ IRU WKH ILUHDUPV FKDUJH  )RU WKH UHDVRQV LQ GHQ\LQJ &KDYLVjV PRWLRQ VLQFH WKH FRXUW SURSHUO\ GLVFXVVHG EHORZ ZH $)),50 WKH GHFLVLRQ RI WKH GLVWULFW GHWHUPLQHG WKDW &KDYLV KDG QRW DFFHSWHG UHVSRQVLELOLW\ IRU FRXUW HLWKHURIIHQVH7KHGLVWULFWFRXUWjVH[SODQDWLRQIRULWVGHQLDO RI&KDYLVjVPRWLRQPDNHVFOHDUWKDWWKHFRXUWGLGQRWEHOLHYH ,)$&76$1'352&('85( &KDYLVKDGDFFHSWHGUHVSRQVLELOLW\IRUWKHKDQGJXQRIIHQVH ,QVWHDG&KDYLVDWWHPSWHGWRmSDUVHRXWlKLVJXLOWDVWRWKH 2Q$XJXVW  DIHGHUDOJUDQGMXU\UHWXUQHGDWZR KDQGJXQRIIHQVHE\DGPLWWLQJUHVSRQVLELOLW\IRURQO\RQHRI FRXQW LQGLFWPHQW DJDLQVW WKH GHIHQGDQW sHUHP\ &KDYLV WKHWZRKDQGJXQVDQGGHQ\LQJUHVSRQVLELOLW\IRUWKHKDQGJXQ &RXQW2QHFKDUJHG&KDYLVZLWKFDXVLQJDQRWKHUSHUVRQWR SXUFKDVHGE\/DQJEHLQ&KDYLVjVGHQLDORIUHVSRQVLELOLW\DV PDNHDIDOVHVWDWHPHQWWRDIHGHUDOO\OLFHQVHGILUHDUPVGHDOHU UHOHYDQWFRQGXFWIRUWKHVHFRQGKDQGJXQLVDYDOLGJURXQGIRU RQRUDERXW6HSWHPEHU LQYLRODWLRQRI86& GHQ\LQJDQDFFHSWDQFHRIUHVSRQVLELOLW\DGMXVWPHQW8QGHU †  D    86& †  D  %  DQG  86& †  WKH 6HQWHQFLQJ *XLGHOLQHV mD GHIHQGDQW LV QRW UHTXLUHG WR &RXQW 7ZR FKDUJHG &KDYLV ZLWK XQODZIXOO\ SRVVHVVLQJ LQ YROXQWHHURUDIILUPDWLYHO\DGPLWUHOHYDQWFRQGXFWEH\RQGWKH H[FHVV RI ILYH JUDPV RI FRFDLQH EDVH ZLWK WKH LQWHQW WR RIIHQVH RI FRQYLFWLRQ LQ RUGHU WR REWDLQ D UHGXFWLRQ >IRU GLVWULEXWHRQRUDERXWsXQH  LQYLRODWLRQRI86& DFFHSWDQFHRIUHVSRQVLELOLW\@+RZHYHUDGHIHQGDQWZKR † D  DQG86&† E  % LLL  IDOVHO\GHQLHVRUIULYRORXVO\FRQWHVWVUHOHYDQWFRQGXFWWKDW WKH FRXUW GHWHUPLQHV WR EH WUXH KDV DFWHG LQ D PDQQHU 2Q 2FWREHU    &KDYLV ILOHG D PRWLRQ SXUVXDQW WR LQFRQVLVWHQWZLWKDFFHSWDQFHRIUHVSRQVLELOLW\>@l866* )HGHUDO5XOHRI&ULPLQDO3URFHGXUH D WRVHYHUWKHFRXQWV  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  866*†% D  :KHWKHUWKHFULPLQDODFWVRIRWKHUV LQWKHLQGLFWPHQW2UDODUJXPHQWZDVKHOGRQWKHPRWLRQRQ LQ D MRLQWO\ XQGHUWDNHQ FULPLQDO DFWLYLW\ DUH UHDVRQDEO\ 2FWREHU 7KHFRXUWGHQLHGWKHPRWLRQDWWKDWWLPH IRUHVHHDEOH LV D TXHVWLRQ RI IDFW UHYLHZDEOH RQO\ IRU FOHDU DQGWKHFDVHSURFHHGHGWRDFRQVROLGDWHGWULDORQERWKFRXQWV HUURU6HH8QLWHG6WDWHVY+DPLOWRQ)G WK &LU FHUWGHQLHG6&W   $W&KDYLVjVWULDO/RUULH&KPLHOHZVNLWHVWLILHGWKDW&KDYLV DQG'RQDOG/DQJEHLQ&KDYLVjVFRXVLQDVNHGKHUWRSXUFKDVH 7KH GLVWULFW FRXUWj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jVSXUFKDVHZDVUHDVRQDEO\ /DQJEHLQDQG&KDYLVj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jV DGPLVVLRQ WR KLV &KDYLVDQG/DQJEHLQ&KPLHOHZVNLWROGWKHVDOHVSHUVRQDW LQYROYHPHQW LQ WKH LOOHJDO ILUHDUPV SXUFKDVH  6HFWLRQ WKHVWRUHWKDWVKHZDVEX\LQJWKHJXQVIRUKHUVHOI6KHZDV ( D RIWKH6HQWHQFLQJ*XLGHOLQHVSURYLGHVWKDWm>L@IWKH JLYHQDUHFHLSWIRUWKHJXQVZKLFKVKHJDYHWR&KDYLV GHIHQGDQWFOHDUO\GHPRQVWUDWHVDFFHSWDQFHRIUHVSRQVLELOLW\ IRU KLV RIIHQVH GHFUHDVH WKH RIIHQVH OHYHO E\  OHYHOVl $IWHUWKHEDFNJURXQGFKHFNZDVFRPSOHWHG&KPLHOHZVNL 866*†( D 7KHFRPPHQWDU\WR†(H[SODLQV UHWXUQHGWRWKHJXQVWRUHZLWK&KDYLV/DQJEHLQDQG&KDYLVjV WKDWm>W@KHVHQWHQFLQJMXGJHLVLQDXQLTXHSRVLWLRQWRHYDOXDWH XQFOH&KPLHOHZVNLILOOHGRXWD)LUHDUPV7UDQVDFWLRQ5HFRUG DGHIHQGDQWjVDFFHSWDQFHRIUHVSRQVLELOLW\)RUWKLVUHDVRQ DWWKDWWLPHRQZKLFK&KPLHOHZVNLDIILUPHGWKDWVKHZDVWKH WKHGHWHUPLQDWLRQRIWKHVHQWHQFLQJMXGJHLVHQWLWOHGWRJUHDW DFWXDOEX\HURIWKHJXQV&KPLHOHZVNLFDUULHGWKHJXQVRXWRI GHIHUHQFHRQUHYLHZl866*†(FRPPHQWDSSOLF WKHVWRUHDQGJDYHWKHPWR&KDYLVDQG/DQJEHLQXSRQDUULYLQJ QRWH   &KDYLV UHTXHVWHG DQ DFFHSWDQFH RI UHVSRQVLELOLW\ DW&KDYLVjVJUDQGPRWKHUjVKRXVH&KPLHOHZVNLVWDWHGWKDW DGMXVWPHQWGXULQJKLVVHQWHQFLQJKHDULQJ7KHGLVWULFWFRXUW RYHUUXOHG &KDYLVjV PRWLRQ H[SODLQLQJ WKDW mLW LV P\ XQGHUVWDQGLQJ RI WKH FDVH ODZ WKDW WKHUH KDV WR EH DQ DFFHSWDQFH RI UHVSRQVLELOLW\ IRU DOO RI WKH DFWV  <RX FDQjW  SDUVH LW RXW  $QG , WKLQN WKDW LV ZKDW 0U &KDYLV ZDV ,Q SUHSDUDWLRQ IRU DSSHDO FRXQVHO ZHUH XQDEOH HLWKHU WR REWDLQ D

DWWHPSWLQJWRGR,GRQjWWKLQNKHDFFHSWHGUHVSRQVLELOLW\IRU WUDQVFULSW RI WKH KHDULQJ RU WR ORFDWH D ZULWWHQ RUGHU RQ WKH UHFRUG GHQ\LQJ &KDYLVjV PRWLRQ 2Q $XJXVW   WKH GLVWULFW FRXUW HQWHUHG DQ RUGHU H[SODLQLQJ WKDW LW KDG FRQVLGHUHG WKH PRWLRQ EXW GHQLHG LW GXH WR WKH GHIHQGDQWjV IDLOXUH WR VKRZ SUHMXGLFH  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  VKHUHFHLYHGDTXDQWLW\RIFUDFNFRFDLQHIURP/DQJEHLQDWWKDW HQWLWOHGWRDWZROHYHOGRZQZDUGDGMXVWPHQWLQKLVRIIHQVH WLPHLQH[FKDQJHIRUKHUVHUYLFHV OHYHOIRUSDUWLDODFFHSWDQFHRIUHVSRQVLELOLW\IRUWKHILUHDUPV RIIHQVH  ,Q UHYLHZLQJ D GLVWULFW FRXUWjV DSSOLFDWLRQ RI WKH 1HDUO\WZR\HDUVODWHURQsXQH  &ROXPEXV3ROLFH 6HQWHQFLQJ*XLGHOLQHVWKLVFRXUWUHYLHZVFRQFOXVLRQVRIODZ 2IILFHUs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jV WULDO +HDWKHU &URFN D FULPLQRORJLVW DW WKH FRXUW RYHUUXOHG WKLV REMHFWLRQ RQ WKH JURXQGV WKDW WKH &ROXPEXV SROLFH FULPH ODERUDWRU\ WHVWLILHG UHJDUGLQJ KHU SXUFKDVH RI ERWK KDQGJXQV ZDV D UHDVRQDEO\ IRUHVHHDEOH H[DPLQDWLRQ RI WKH VXEVWDQFH UHFRYHUHG GXULQJ WKH DUUHVW UHVXOWRI&KDYLVjVDQG/DQJEHLQjVMRLQWO\XQGHUWDNHQFULPLQDO &URFNVWDWHGWKDWWKHVXEVWDQFHZDVFUDFNFRFDLQHDQGWKDWLW DFWLYLW\ ZHLJKHGJUDPVDWWKHWLPHVKHH[DPLQHGLW$WWKHWLPH RI WULDO KRZHYHU WKH VXEVWDQFH ZHLJKHG RQO\  JUDPV 7KH6HQWHQFLQJ*XLGHOLQHVSURYLGHWKDWUHOHYDQWFRQGXFW &URFNWHVWLILHGWKDWVXFKDORVVRIZHLJKWRYHUWLPHZDVQRW IRUWKHSXUSRVHRIGHWHUPLQLQJWKHGHIHQGDQWjVRIIHQVHOHYHO DEQRUPDO6KHVWDWHGWKDWZHLJKWORVVFRXOGEHDWWULEXWHGWR LQFOXGHV HYDSRUDWLRQRIZDWHUFRQWDLQHGLQWKHVXEVWDQFH&URFNDOVR WHVWLILHGWKDWDVPDOOSRUWLRQRIWKHPDWHULDOZDVGHVWUR\HGDV $  DOO DFWV DQG RPLVVLRQV FRPPLWWHG DLGHG DEHWWHG D UHVXOW RI WHVWLQJ  6SHFLDO $JHQW 'DQLHO 2]EROW RI WKH FRXQVHOHGFRPPDQGHGLQGXFHGSURFXUHGRUZLOOIXOO\ )HGHUDO%XUHDXRI$OFRKRO7REDFFRDQG)LUHDUPVWHVWLILHG FDXVHGE\WKHGHIHQGDQW DQG DW&KDYLVj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jVLQVWUXFWLRQ RUSXUFKDVLQJGUXJVIUHTXHQWO\ZDONWKURXJKWKHDUHDZKHUH DQGGLGQRWXVHHYLGHQFHUHODWLQJWRWKHILUHDUPVFKDUJHWR KHZDVVWDQGLQJWKDWQLJKW LQIHUJXLOWDVWRWKHGUXJFULPH0RUHRYHUWKHUHLVOLWWOHEDVLV LQ WKH UHFRUG IRU FRQFOXGLQJ WKDW WKH MXU\ ZRXOG QRW KDYH sXGLWK*ULIILWKDOVRWHVWLILHGIRUWKHGHIHQVH6KHVWDWHGWKDW FRQYLFWHG&KDYLVRQWKHILUHDUPVFKDUJHLQWKHDEVHQFHRIKLV VKHZDVVWDQGLQJZLWK&KDYLVRQWKHQLJKWKHZDVDUUHVWHGE\ WHVWLPRQ\JLYHQWKHVWUHQJWKRIWKHJRYHUQPHQWj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jV &KDYLVPDGHD5XOH PRWLRQIRUDMXGJPHQWRIDFTXLWWDO UHOHYDQWFRQGXFW7KHGHIHQGDQWDOVRFRQWHQGVWKDWKHZDV DWWKHFORVHRIWKHVWDWHj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m>:@KHQ D JXLOW\ RI WKH ILUHDUPV FRXQW DQG VLPSOH SRVVHVVLRQ RI LQ SURVHFXWRU FKDUJHV WZR FULPHV LQ D VLQJOH LQGLFWPHQW WKH µPXOWLSOH FRXQWj H[FHVVRIILYHJUDPVRIFRFDLQHEDVH&KDYLVZDVDFTXLWWHG UXOHV PD\ SURGXFH D GLIIHUHQW VHQWHQFH WKDQ WKH VXP RI WKH WZR VHQWHQFHV WKDW WKH *XLGHOLQHV ZRXOG KDYH SURGXFHG KDG WKH SURVHFXWRU FKDUJHG WKH RISRVVHVVLQJFUDFNFRFDLQHZLWKWKHLQWHQWWRGLVWULEXWH WZR FULPHV LQ WZR WRWDOO\ VHSDUDWH LQGLFWPHQWVl  %HFDXVH WKH WZR RIIHQVHV ZHUH LQFOXGHG DV PXOWLSOH FRXQWV LQ WKH VDPH LQGLFWPHQW &KDYLV $WVHQWHQFLQJ&KDYLVDUJXHGWKDWKLVRIIHQVHOHYHOVKRXOG UHFHLYHG WKH EHQHILW RI WKH 6HQWHQFLQJ *XLGHOLQHVj UXOHV SUHVFULELQJ WKDW EHEDVHGRQO\RQWKHKDQGJXQKHSXUFKDVHGIRUKLPVHOIDQG WKH VHQWHQFHV IRU PXOWLSOH FRXQWV RI FRQYLFWLRQ UXQ FRQFXUUHQWO\ 6HH QRWWKHKDQGJXQSXUFKDVHGE\/DQJEHLQ7KHFRXUWRYHUUXOHG 866* † * F  7UXH LW ZRXOG EH SRVVLEOH IRU &KDYLV WR UHFHLYH WKLVREMHFWLRQFRQFOXGLQJWKDWERWKKDQGJXQSXUFKDVHVZHUH FRPSOHWHO\ FRQFXUUHQW VHQWHQFHV IRU WKH GUXJ DQG ILUHDUPV RIIHQVHV HYHQ LI WKH WZR ZHUH WULHG VHSDUDWHO\ VLQFH WKH GLVWULFW FRXUW KDV VRPH UHDVRQDEO\ IRUHVHHDEOH UHVXOWV RI &KDYLVjV DQG /DQJEHLQjV GLVFUHWLRQ WR LPSRVH HLWKHU FRQFXUUHQW RU FRQVHFXWLYH VHQWHQFHV ZKHUH MRLQWO\XQGHUWDNHQFULPLQDODFWLYLW\&KDYLVDOVRDUJXHGWKDW m>P@XOWLSOH WHUPV RI LPSULVRQPHQW >DUH@ LPSRVHG DW GLIIHUHQW WLPHVl  KHVKRXOGUHFHLYHDGRZQZDUGDGMXVWPHQWIRUDFFHSWDQFHRI 86& †  D VHH DOVR 8QLWHG 6WDWHV Y 0DQH\  )G   UHVSRQVLELOLW\7KHFRXUWRYHUUXOHGWKLVREMHFWLRQEHFDXVH WK &LU  m$ GLVWULFW FRXUW KDV GLVFUHWLRQ WR LPSRVH D FRQFXUUHQW RU DOWKRXJK &KDYLV DGPLWWHG WR KLV SDUWLFLSDWLRQ LQ LOOHJDOO\ FRQVHFXWLYH WHUP RI LPSULVRQPHQW RQ D GHIHQGDQW ZKR LV DOUHDG\ VXEMHFW WR DQ XQGLVFKDUJHG WHUP RI LPSULVRQPHQWl 866* † * F  :H SXUFKDVLQJ D KDQGJXQ KH GHQLHG SRVVHVVLQJ FUDFN FRFDLQH QRWH KRZHYHU WKDW WKH VWDWXWRU\ GHIDXOW LQ VXFK VLWXDWLRQV LV WKDW WKH DQGGHQLHGKLVUHVSRQVLELOLW\IRURQHRIWKHKDQGJXQV7KH VHQWHQFHV UXQ FRQVHFXWLYHO\  86& †  D  :H GR QRW SHUFHLYH FRXUWWKHQGHWHUPLQHGWKDW&KDYLVjVWRWDORIIHQVHOHYHOVKRXOG DQ\WKLQJ DERXW &KDYLVjV FDVH WKDW ZRXOG FOHDUO\ ZDUUDQW GHSDUWXUH IURP EHVHWDWWZHQW\VHYHQDQGWKDWKLVFULPLQDOKLVWRU\FDWHJRU\ WKH GHIDXOW UXOH 6HH JHQHUDOO\  86& ††  D   E OLVWLQJ ZDV,,,%DVHGXSRQWKLVGHWHUPLQDWLRQWKHFRXUWVHQWHQFHG IDFWRUV WR EH FRQVLGHUHG LQ LPSRVLWLRQ RI VHQWHQFH  :H WKHUHIRUH FDQQRW FRQFOXGH WKDW PLVMRLQGHU DGYHUVHO\ DIIHFWHG &KDYLVjV VXEVWDQWLDO ULJKWV DW &KDYLVWRHLJKW\VHYHQPRQWKVjLPSULVRQPHQW&KDYLVILOHG VHQWHQFLQJ VLQFH DOO LQGLFDWLRQV VXJJHVW WKDW &KDYLV UHFHLYHG D OHVVHU DWLPHO\QRWLFHRIDSSHDO VHQWHQFH WKDQ KH ZRXOG KDYH UHFHLYHG KDG WKH WZR RIIHQVHV EHHQ WULHG VHSDUDWHO\  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  ,,$1$/<6,6 ILUHDUPVFKDUJHDQGVWLOOWHVWLILHGLQKLVRZQGHIHQVHDVWRWKH FUDFNFRFDLQHFKDUJH $6XIILFLHQF\RIWKH(YLGHQFH 7KH/DQHGHFLVLRQUHTXLUHVWKDWZHGHWHUPLQHZKDWLPSDFW &KDYLV ILUVW FRQWHQGV WKDW WKH HYLGHQFH DW WULDO ZDV &KDYLVjVGHFLVLRQWRWHVWLI\KDGRQWKHMXU\jVYHUGLFWRQWKH LQVXIILFLHQWWRVXSSRUWWKHMXU\jVYHUGLFWWKDWKHSRVVHVVHGLQ ILUHDUPVFKDUJH86DW 7KLVLVDGLIILFXOWLQTXLU\ H[FHVVRIILYHJUDPVRIFUDFNFRFDLQH&KDYLVDUJXHVWKDWD VLQFHWKHLVVXHZDVQRWIXOO\OLWLJDWHGLQWKHGLVWULFWFRXUWDVD MXU\FRXOGQRWKDYHIRXQGDTXDQWLW\RIPRUHWKDQILYHJUDPV UHVXOW RI &KDYLVjV DGPLVVLRQ RI JXLOW  1HYHUWKHOHVV ZH LQOLJKWRIWKHIDFWWKDWWKHFRFDLQHEDVHZHLJKHGRQO\ FRQFOXGHWKDW&KDYLVZDVQRWSUHMXGLFHG7KHHYLGHQFHRI JUDPV DW WKH WLPH RI WULDO  &KDYLV DOVR FODLPV WKDW WKH &KDYLVjV JXLOW RQ WKLV FKDUJH ZDV RYHUZKHOPLQJ  6HH LG WHVWLPRQ\RI&URFNZDVWRRLQFRQVLVWHQWDQGVSHFXODWLYHWR )URVW)GDW  FLWLQJRYHUZKHOPLQJHYLGHQFHRIJXLOW VXSSRUWWKHMXU\jVYHUGLFW DVWRFRXQWRIFRQYLFWLRQDVSULPDU\JURXQGVIRUFRQFOXGLQJ WKDW DQ\ HUURU UHVXOWLQJ IURP PLVMRLQGHU ZDV KDUPOHVV  m7KLV FRXUW ZLOO UHYHUVH D MXGJPHQW IRU LQVXIILFLHQF\ RI &KDYLVZDVGLUHFWO\LPSOLFDWHGE\&KPLHOHZVNLLQWKHFULPH HYLGHQFHRQO\LIWKLVMXGJPHQWLVQRWVXSSRUWHGE\VXEVWDQWLDO DQG WZR HPSOR\HHV DW WKH JXQ VWRUH LGHQWLILHG &KDYLV DV DQGFRPSHWHQWHYLGHQFHXSRQWKHUHFRUGDVDZKROHl KDYLQJ EHHQ ZLWK &KPLHOHZVNL ZKHQ VKH SXUFKDVHG WKH 8QLWHG6WDWHVY%HGGRZ )G WK&LU  KDQGJXQV,QFRQWUDVWWKHUHLVQRHYLGHQFHLQWKHUHFRUGWR TXRWDWLRQRPLWWHG 7KH6XSUHPH&RXUWKDVH[SODLQHGWKDW GLVSXWH&KDYLVjVJXLOW$OWKRXJKZHXQGHUVWDQGWKDWWKLVLV DMXU\YHUGLFWPXVWEHXSKHOGLImYLHZLQJWKHHYLGHQFHLQWKH GXHSDUWO\WR&KDYLVjVGHFLVLRQQRWWRFRQWHVWJXLOWDWWULDOZH OLJKWPRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURI WKLQN&KDYLVFRXOGKDYHPDGHDSURIIHURISURRIFRQFHUQLQJ IDFW FRXOG KDYH IRXQG WKH HVVHQWLDO HOHPHQWV RI WKH FULPH DQ\SRVVLEOHGHIHQVHWRWKHILUHDUPVFKDUJHLQVXSSRUWRIKLV EH\RQGDUHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD86 5XOH D PRWLRQ*LYHQ&KDYLVjVDGPLVVLRQRIJXLOWLWLV       HPSKDVLV LQ RULJLQDO   m,Q DGGUHVVLQJ GLIILFXOWWRLPDJLQHWKDWDQ\VLJQLILFDQWH[FXOSDWRU\HYLGHQFH VXIILFLHQF\ RI WKH HYLGHQFH TXHVWLRQV WKLV &RXUW KDV ORQJ FRXOG KDYH EHHQ SUHVHQWHG RU DQ\ ZHDNQHVV LQ WKH GHFOLQHG WR ZHLJK WKH HYLGHQFH FRQVLGHU WKH FUHGLELOLW\ RI JRYHUQPHQWjV FDVH H[SRVHG  ,Q OLJKW RI WKH RYHUZKHOPLQJ ZLWQHVVHV RU VXEVWLWXWH LWV MXGJPHQW IRU WKDW RI WKH MXU\l HYLGHQFHSUHVHQWHGE\WKHJRYHUQPHQWRQWKHILUHDUPVFKDUJH 8QLWHG6WDWHVY)HUJXVRQ)G WK&LU FHUW DQG&KDYLVjVIDLOXUHWRPDNHDQ\SURIIHURIHYLGHQFHZKLFK GHQLHG86    7KLVVWDQGDUGSODFHVDmYHU\ PLJKW KDYH DIIRUGHG D GHIHQVH ZH GLVFHUQ OLWWOH EDVLV IRU KHDY\EXUGHQlXSRQDGHIHQGDQWPDNLQJDVXIILFLHQF\RIWKH ILQGLQJSUHMXGLFH HYLGHQFHFKDOOHQJH8QLWHG6WDWHVY7RFFR)G  WK&LU  %DVHGXSRQWKHIRUHJRLQJFRQVLGHUDWLRQVZHGHWHUPLQHWKDW DOWKRXJKLWZDVHUURUIRUWKHGLVWULFWFRXUWWRGHQ\&KDYLVjV $SSO\LQJ WKLV VWDQGDUG ZH FRQFOXGH WKDW WKHUH ZDV PRWLRQDQ\HUURUUHVXOWLQJIURPPLVMRLQGHULQWKHLQVWDQWFDVH VXIILFLHQWHYLGHQFHWRFRQYLFW&KDYLVRISRVVHVVLQJLQH[FHVV ZDVKDUPOHVV,QOLJKWRIWKH6XSUHPH&RXUWj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m866*l † ' s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s$DW/DQHLQVWUXFWVWKDWZHVKRXOGSUHVXPHWKDWWKH SDJHU:HDJUHHWKDWWKLVLVDFORVHFDVHEXWFRQFOXGHWKDWKH MXU\IROORZHGWKLVLQVWUXFWLRQDQGGLGQRWPDNHDQLPSURSHU GLVWULFWFRXUWUXOLQJZDVQRWLQHUURU$UHDVRQDEOHMXU\FRXOG SURSHQVLW\ LQIHUHQFH  :H WKLQN WKHUHIRUH WKDW WKH GLVWULFW KDYHDFFHSWHG$JHQW2]EROWjVWHVWLPRQ\LQGLFDWLQJWKDWILYH FRXUWjV LQVWUXFWLRQ VLJQLILFDQWO\ UHGXFHG WKH SRWHQWLDO IRU JUDPV RI FUDFN FRFDLQH ZDV FRQVLVWHQW ZLWK D VWUHHW GHDOHU SUHMXGLFH WR WKH GHIHQGDQW  7KH IDFW WKDW WKH MXU\ GLG QRW TXDQWLW\DQGWKDWDmXVHUlZRXOGJHQHUDOO\EHLQSRVVHVVLRQRI FRQYLFW&KDYLVRISRVVHVVLQJFUDFNFRFDLQHZLWKDQLQWHQWWR RQO\URFNVZHLJKLQJDERXWRQHWHQWKRIDJUDPHDFK,Q GLVWULEXWHPRUHRYHURIIHUVIXUWKHUVXSSRUWIRUWKHFRQFOXVLRQ FRPELQDWLRQZLWKWKHGHIHQGDQWjVSRVVHVVLRQRIWKHFDVKDQG WKDWWKH\GLGQRWODEHO&KDYLVDVDmGUXJGHDOHUlEDVHGXSRQ WKHFHOOSKRQHDQGSDJHUDMXU\FRXOGKDYHIRXQGLQWHQWWR KLVLQYROYHPHQWLQWKHKDQGJXQSXUFKDVH&I)URVW)G GLVWULEXWH6HH8QLWHG6WDWHVY3HWHUV)G DW  QRWLQJWKDWMXU\ZDVQRWOLNHO\WRKDYHEHHQSUHMXGLFHG WK&LU  ILQGLQJVXIILFLHQWHYLGHQFHRILQWHQWWRGLVWULEXWH E\ HYLGHQFH UHODWLQJ WR GHVWUXFWLRQ RI HYLGHQFH LQ OLJKW RI ZKHUHSROLFHIRXQGILYHJUDPVRIFUDFNFRFDLQH DQGD MXU\jVYHUGLFWDFTXLWWLQJWKHGHIHQGDQWRQWKDWFKDUJH 8QLWHG GLJLWDO SDJHU ZKHUH m>H@[SHUW WHVWLPRQ\ LQGLFDWHG WKDW WKH 6WDWHVY%LEE\)G WK&LU   FLWLQJ DPRXQW RI GUXJV WKH FXUUHQF\ GHQRPLQDWLRQV DQG WKH DFTXLWWDORQPLVMRLQHGFKDUJHVDVHYLGHQFHWKDWGHIHQGDQWZDV SUHVHQFHRIDSDJHUZHUHFRQVLVWHQWZLWKGUXJGLVWULEXWLRQl  QRW SUHMXGLFHG E\ MRLQGHU  FHUW GHQLHG  86  FHUWGHQLHG86   VHHDOVR8QLWHG6WDWHVY   +XEEDUG)GDW m>7@KHIDFWWKDWWKHMXU\ 9LQFHQW  )G    WK &LU    REVHUYLQJ WKDW FRQYLFWHG +XEEDUG RQ WKH ZHDSRQV RIIHQVH EXW FRXOG QRW LQWHQW WR GLVWULEXWH FDQ EH LQIHUUHG IURP TXDQWLW\ RI GUXJV UHDFK D YHUGLFW RQ WKH WZR QDUFRWLFV FKDUJHV VXJJHVWV LI LQYROYHG  DQ\WKLQJWKDWWKHMXU\ZDVTXLWHDEOHWRVHSDUDWHWKHILUHDUPV FRXQWIURPWKHQDUFRWLFVFRXQWVDQGGHOLEHUDWHHDFKZLWKWKH %,PSURSHUsRLQGHU DSSURSULDWHHYLGHQFHDQGOHJDOFULWHULDLQPLQGl  &KDYLVDSSHDOVWKHGLVWULFWFRXUWjVGHQLDORIKLVPRWLRQWR &KDYLVDOVRSRLQWVWRDVHFRQGW\SHRISUHMXGLFHUHVXOWLQJ VHYHU WKH WZR FRXQWV DOOHJHG LQ WKH LQGLFWPHQW EDVHG XSRQ IURPMRLQGHULQWKLVFDVH&KDYLVWHVWLILHGLQKLVRZQGHIHQVH PLVMRLQGHURIRIIHQVHV'HIHQGDQWj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jVPRWLRQ,QWKHGLVWULFWFRXUWjV  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  RUGHUH[SODLQLQJLWVUHDVRQVIRUGHQLDORIVHYHUDQFHWKHFRXUW FDQEHUHGXFHGVLJQLILFDQWO\E\SURSHUFXUDWLYHLQVWUXFWLRQV FRQFOXGHG WKDW WKH GHIHQGDQW KDG QRW VKRZQ D ULVN RI MXU\ 6HH/DQH86DWQ,Q/DQHWKH6XSUHPH&RXUW FRQIXVLRQRUSUHMXGLFH7KHFRXUWIXUWKHUQRWHGWKDWmERWKWKH HPSKDVL]HGWKHYDOXHRIOLPLWLQJLQVWUXFWLRQVLQPLQLPL]LQJ JXQFKDUJHDQGWKHFRFDLQHFKDUJHZHUHGUXJUHODWHGDOWKRXJK WKH ULVN RI mVSLOORYHUl SUHMXGLFH IURP LPSURSHU MRLQGHU RI WKH RIIHQVHV ZHUH VHSDUDWHG E\ D WZR\HDU SHULRGl  sRLQW PXOWLSOHGHIHQGDQWVXQGHU5XOH E H[SODLQLQJWKDW $SSHQGL[ ms$l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jV PLVGHPHDQRUV RU ERWK DUH RI WKH VDPH RU VLPLODU FRQFOXVLRQ LQ 6FKDIIHU WKDW GHIHQGDQWV IDLOHG WR VKRZ FKDUDFWHURUDUHEDVHGRQWKHVDPHDFWRUWUDQVDFWLRQRU SUHMXGLFHZDVEDVHGGLUHFWO\RQWKHIDFWWKDWWKHMXGJH RQWZRRUPRUHDFWVRUWUDQVDFWLRQVFRQQHFWHGWRJHWKHURU ZDVDFXWHO\DZDUHRIWKHSRVVLELOLW\RISUHMXGLFHDQGZDV FRQVWLWXWLQJSDUWVRIDFRPPRQVFKHPHRUSODQ VWULFWLQKLVFKDUJHnQRWRQO\DVWRWKHWHVWLPRQ\WKH MXU\ ZDV QRW WR FRQVLGHU EXW DOVR DV WR WKDW HYLGHQFH )(' 5 &5,0 3 D $OWKRXJKWKLVFRXUWKDVKHOGWKDW5XOH ZKLFKZDVDYDLODEOHLQWKHFRQVLGHUDWLRQRIWKHJXLOWRI mVKRXOGEHFRQVWUXHGLQIDYRURIMRLQGHULWLVDOVRWUXHWKDW HDFK GHIHQGDQW VHSDUDWHO\ XQGHU WKH UHVSHFWLYH IDLOXUH WR PHHW WKH UHTXLUHPHQWV RI WKLV UXOH FRQVWLWXWHV VXEVWDQWLYHFRXQWV PLVMRLQGHUDVDPDWWHURIODZl8QLWHG6WDWHVY+DWFKHU 7KHVDPHFDXWLRQZDVH[HUFLVHGE\WKHWULDOMXGJHKHUH )G WK&LU   FLWDWLRQVRPLWWHG ,IMRLQGHU DQGQRGLIIHUHQWUHVXOWVKRXOGEHUHTXLUHG RIPXOWLSOHGHIHQGDQWVRUPXOWLSOHRIIHQVHVGRHVQRWFRPSO\ ZLWK WKH UHTXLUHPHQWV RI 5XOH  WKH GLVWULFW FRXUW KDV mQR 86DWQ TXRWDWLRQVDQGEUDFNHWVRPLWWHG :H GLVFUHWLRQRQWKHTXHVWLRQRIVHYHUDQFHl,GDW VHHDOVR KDYHSUHYLRXVO\KHOGWKDWOLPLWLQJLQVWUXFWLRQVFDQVLPLODUO\ &+$5/(6 $/$1 :5,*+7 $ )('(5$/ 35$&7,&( PLQLPL]H WKH GDQJHU RI SUHMXGLFH UHVXOWLQJ IURP LPSURSHU 352&('85( &5,0,1$/ †  DW    G HG  MRLQGHU RI RIIHQVHV XQGHU 5XOH  D  SDUWLFXODUO\ ZKHUH mLW m0LVMRLQGHU RI RIIHQVHV RU GHIHQGDQWV     UDLVHV RQO\ D ZRXOGQRWKDYHEHHQGLIILFXOWIRUWKHMXU\WRFRPSDUWPHQWDOL]H TXHVWLRQRIODZ,IWKHUHKDVEHHQPLVMRLQGHUWKHWULDOFRXUW DQG GLVWLQJXLVK WKH HYLGHQFH FRQFHUQLQJl WKH GLIIHUHQW KDVQRGLVFUHWLRQWRGHQ\WKHPRWLRQl :KHWKHUMRLQGHUZDV RIIHQVHVFKDUJHG)URVW)GDW  m7KH'LVWULFW&RXUW SURSHUXQGHU5XOH D LVGHWHUPLQHGE\WKHDOOHJDWLRQVRQWKH IXUWKHU PLQLPL]HG DQ\ SUHMXGLFH E\ LQVWUXFWLQJ WKH MXU\ WR IDFHRIWKHLQGLFWPHQW6HH8QLWHG6WDWHVY)URVW)G FRQVLGHURQO\WKHHYLGHQFHDJDLQVWHDFKGHIHQGDQWRQHDFK   WK&LU  FHUWGHQLHG86   FKDUJH    ZLWKRXW UHJDUG WR WKH RWKHU FKDUJHV RU 8QLWHG6WDWHVY/OR\G)G  WK&LU   GHIHQGDQWVl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jV GHQLDO RI 7KHEXUGHQRISHUVXDVLRQLQGHPRQVWUDWLQJWKDWDQHUURULV &KDYLVjV VHYHUDQFH PRWLRQ EHFDXVH WKH PRWLRQ ZDV QRW KDUPOHVVXQGHU5XOH D UHVWVZLWKWKHJRYHUQPHQW8QLWHG UHQHZHGDWWKHFORVHRIDOOWKH HYLGHQFH7KHJRYHUQPHQW 6WDWHVY6HJLQHV)G WK&LU   EDVHVWKLVDUJXPHQWXSRQRXUSUHFHGHQWKROGLQJWKDWDPRWLRQ WR VHYHU FRXQWV LQ DQ LQGLFWPHQW XQGHU 5XOH  mZLOO EH &KDYLV DUJXHV WKDW SHUPLWWLQJ WKH MXU\ WR KHDU HYLGHQFH GHHPHG ZDLYHG LI LW LV QRW UHQHZHG DW WKH HQG RI WKH DERXWERWKWKHILUHDUPVFKDUJHDQGWKHGUXJFKDUJHFUHDWHGD HYLGHQFHl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mGUXJGHDOHUVOLNHls$DW 2]EROW7U 86    m5XOHUHFRJQL]HVWKDWMRLQGHU DW    :H DFNQRZOHGJH WKDW VXFK HYLGHQFH SUHVHQWV D HYHQ ZKHQ SURSHU XQGHU 5XOH  E  PD\ SUHMXGLFH HLWKHU D GDQJHU WKDW WKH MXU\ PLJKW LQIHU IURP &KDYLVjV DGPLWWHG GHIHQGDQWRUWKH*RYHUQPHQWl 6FKDIIHUY8QLWHG6WDWHV LQYROYHPHQW LQ WKH KDQGJXQ SXUFKDVH WKDW KH ZDV D GUXJ 86   &KDYLVPDGHDPRWLRQIRUUHOLHI GHDOHUDQGWKHUHIRUHWKDW&KDYLVZDVOLNHO\WREHLQNQRZLQJ XQGHU5XOH D QRW5XOHDVVHUWLQJWKDWLQLWLDOMRLQGHURI SRVVHVVLRQRIFUDFNFRFDLQH7KH1LQWK&LUFXLWLQ7HUU\  WKH WZR RIIHQVHV LQ WKH LQGLFWPHQW ZDV LPSURSHU  $V WKH )G DW  UHFRJQL]HG WKDW WKH SRWHQWLDO IRU WKLV NLQG RI 1LQWK&LUFXLWREVHUYHGLQ7HUU\DOWKRXJKmLWLVFOHDUWKDWD SUHMXGLFH H[LVWV ZKHQHYHU XQUHODWHG GUXJ DQG ILUHDUPV 5XOHPRWLRQWRVHYHUPXVWEHUHQHZHGDWWKHFORVHRIWKH FKDUJHVDUHLPSURSHUO\MRLQHG HYLGHQFHRULWLVZDLYHGWKHUHLVQRVXFKUHTXLUHPHQWIRUD 5XOHPRWLRQl )GDW7KH7HUU\FRXUWH[SODLQHG $ MXURU ZRXOG LQHYLWDEO\ EH PRUH GLVWXUEHG DERXW WKH WKHUHDVRQIRUWKLVGLVWLQFWLRQ LGHD RI D mGUXJ GHDOHUl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jVWHVWLPRQ\WKDW&KDYLV MXU\UHWXUQV VXSSOLHGKHUZLWKDTXDQWLW\RIFUDFNFRFDLQHLQH[FKDQJHIRU $5XOHPRWLRQLQFRQWUDVWWR5XOHGLVSXWHVWKH KHUDVVLVWDQFHZLWKWKHKDQGJXQSXUFKDVHZKLFKDOVRFDUULHV SURSULHW\RIMRLQLQJFKDUJHVLQWKHLQGLFWPHQW5DWKHU WKHULVNWKDWWKHMXU\ZRXOGLPSURSHUO\LQIHUWKDW&KDYLVZDV WKDQEHLQJGHFLGHGDWWKHGLVFUHWLRQRIWKHORZHUFRXUW SUHGLVSRVHGWRFRPPLWGUXJRIIHQVHV MXGJH LW SHUPLWV MRLQGHU RQO\ XQGHU FHUWDLQ VSHFLILF FLUFXPVWDQFHV  :LWK 5XOH  XQOLNH 5XOH  LW LV QRW 7KH6XSUHPH&RXUWKDVLQVWUXFWHGKRZHYHUWKDWWKHGDQJHU QHFHVVDU\IRUWKHWULDOFRXUWWRDVVHVVZKHWKHUDMRLQGHULV RISUHMXGLFHUHVXOWLQJIURP LPSURSHUSURSHQVLW\LQIHUHQFHV  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  SUHMXGLFLDO DW D WLPH ZKHQ WKH HYLGHQFH LV IXOO\ LQDVVHVVLQJWKHSURSULHW\RIMRLQGHU6ZLIW )GDW GHYHORSHG WKH SDUWLHV DUH EHVW SUHSDUHG DQG WKH $VRQHFRPPHQWDWRUKDVQRWHGm>L@IWKHRIIHQVHVDULVHRXWRI ZLWQHVVHVj UHFROOHFWLRQV IUHVKHVW      %HFDXVH WKH VHSDUDWHDQGXQUHODWHGWUDQVDFWLRQVWKHUHLVOLNHO\WREHOLWWOH SURSULHW\RID5XOHMRLQGHULVGHWHUPLQHGVROHO\E\WKH VDYLQJLQWLPHDQGPRQH\LQKDYLQJDVLQJOHWULDOl:5,*+7 LQLWLDODOOHJDWLRQVRIWKHLQGLFWPHQWWKHUHLVQRQHHGWR VXSUD†DW,QWKHLQVWDQWFDVHWKHUHLVQRRYHUODSLQ DVVHVVZKDWDFWXDOO\KDSSHQHGLQWKHWULDO WKHSURRIUHTXLUHGWRSURYHWKHWZRRIIHQVHVDQGWKH\GRQRW VSULQJIURPWKHVDPHVHULHVRIHYHQWVRUIDFWXDOEDFNJURXQG ,G TXRWDWLRQDQGFLWDWLRQVRPLWWHG $OWKRXJKWKLVFLUFXLW 6HH6ZLIW )GDW 8QLWHG6WDWHVY+DOSHU )G KDVQHYHUH[SUHVVO\UXOHGRQWKLVLVVXHZHKDYHSUHYLRXVO\  G &LU   QRWLQJWKDWDGYDQWDJHVRIMRLQGHU FLWHG WKH DERYHTXRWHG GLVFXVVLRQ LQ 7HUU\ ZLWK DSSURYDO mODUJHO\GLVDSSHDUlZKHUHWKHUHLVQRFRPPRQIDFWXDOEDVLV ZKHQ H[SODLQLQJ WKH UDWLRQDOH IRU WKH UHQHZDO UHTXLUHPHQW IRUWZRRIIHQVHV  XQGHU5XOH6HH8QLWHG6WDWHVY$OOHQ)G   WK &LU    FHUW GHQLHG  86   8QLWHG6WDWHVY5H\QROGV )G WK&LU   8QLWHG6WDWHVY+XGVRQ)G WK&LU FHUW FHUW GHQLHG  86     XSRQ ZKLFK WKH GHQLHG  86        :H OLNHZLVH ILQG JRYHUQPHQWDQGWKHGLVWULFWFRXUWGHFLVLRQUHO\LVQRWWRWKH SHUVXDVLYHWKH7HUU\FRXUWj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mRI WKH VDPH RU VLPLODU FKDUDFWHUl EXW XQUHODWHG ZKLFK LV H[SOLFLWO\ SHUPLWWHG XQGHU 5XOH  D   7KH LQVWDQW FDVH LV 3URSULHW\RIsRLQGHU LQDSSRVLWHKRZHYHUEHFDXVHWKHWZRFRXQWVRIWKHLQGLFWPHQW ZHUHERWKGLVVLPLODUDQGXQUHODWHGWRHDFKRWKHU :H FRQFOXGH WKDW WKH MRLQGHU RI WKH GUXJ DQG ILUHDUPV RIIHQVHV LQ WKH LQVWDQW FDVH ZDV QRW SURSHU  7KHUH LV QR +DUPOHVV(UURU$QDO\VLV HYLGHQFH RU DOOHJDWLRQ LQ WKH LQGLFWPHQW VXJJHVWLQJ WKDW &KDYLVjVSRVVHVVLRQRIFRFDLQHEDVHLQsXQHRI ZDVSDUW 'HWHUPLQLQJWKDWMRLQGHUZDVLPSURSHUGRHVQRWHQGRXU RI mWKH VDPH DFW RU WUDQVDFWLRQl DV WKH SXUFKDVH RI WKH LQTXLU\5HYLHZRIHUURUVLQYROYLQJPLVMRLQGHULVVXEMHFWWR KDQGJXQLQ6HSWHPEHURI RUWKDWWKHWZRRIIHQVHVZHUH WKH KDUPOHVV HUURU SURYLVLRQ RI )HGHUDO 5XOH RI &ULPLQDO RWKHUZLVH mFRQQHFWHG WRJHWKHU RU FRQVWLWXWLQJ SDUWV RI D 3URFHGXUH D ZKLFKSHUPLWVUHYHUVDORQO\IRUWULDOHUURUV FRPPRQVFKHPHRUSODQl )(' 5 &5,0 3  D 7KHUHLVQR WKDWmDIIHFWVXEVWDQWLDOULJKWVl6HH8QLWHG6WDWHVY/DQH LQGLFDWLRQLQWKHLQGLFWPHQWRUHOVHZKHUHLQWKHUHFRUGWKDW 86        m>$@Q HUURU LQYROYLQJ PLVMRLQGHU &KDYLV SRVVHVVHG RU XVHG DQ\ ZHDSRQV LQFOXGLQJ WKH µDIIHFWVVXEVWDQWLDOULJKWVjDQGUHTXLUHVUHYHUVDORQO\LIWKH KDQGJXQV FLWHG LQ &RXQW 2QH LQ FRQQHFWLRQ ZLWK KLV PLVMRLQGHU UHVXOWV LQ DFWXDO SUHMXGLFH EHFDXVH LW KDG SRVVHVVLRQRIFRFDLQHEDVHLQsXQHRI 1RULVWKHUHD VXEVWDQWLDODQGLQMXULRXVHIIHFWRULQIOXHQFHLQGHWHUPLQLQJWKH FRPPRQ WKUHDG RI DQ RYHUDUFKLQJ FULPLQDO VFKHPH MXU\jV YHUGLFWl  ,G TXRWDWLRQ RPLWWHG   $SSO\LQJ WKLV FRQQHFWLQJWKHVHWZRFULPHV7KHLQGLFWPHQWGLGQRWDOOHJH VWDQGDUGWKH6XSUHPH&RXUWLQ/DQHLGHQWLILHGDQXPEHURI WKDW&KDYLVjVLOOHJDODFTXLVLWLRQRIWKHILUHDUPVZDVUHODWHGWR IDFWRUVZKLFKVKRZHGWKDWPLVMRLQGHUZDVKDUPOHVVLQWKDW  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  >ZLWK@FRFDLQHlXQGHUWKHRU\WKDWWKH\ZHUHFRQQHFWHGDFWVRU GUXJDFWLYLW\LQDQ\ZD\mDQGLWLVWKHIDFHRIWKHLQGLFWPHQW WUDQVDFWLRQV  RQZKLFKZHPXVWIRFXVLQGHFLGLQJZKHWKHUWKHFKDUJHVZHUH SURSHUO\MRLQHGl+XEEDUG)GDW7KHODFNRIDQ\ ,QWKHLQVWDQWFDVHWKHUHLVVRPHHYLGHQFHWKDWWKHSXUFKDVH UHODWLRQVKLS EHWZHHQ WKH WZR FRXQWV LQ WKH LQGLFWPHQW LV RI WKH ILUHDUPV ZDV UHODWHG WR GUXJ DFWLYLW\ VLQFH IXUWKHUGHPRQVWUDWHGE\WKHVLJQLILFDQWJDSLQWLPHnQHDUO\ &KPLHOHZVNL UHFHLYHG FUDFN FRFDLQH IRU KHU DVVLVWDQFH LQ WZR \HDUV n WKDW RFFXUUHG EHWZHHQ WKH RIIHQVH FRQGXFW SXUFKDVLQJWKHKDQGJXQV$WEHVWKRZHYHUWKHJRYHUQPHQW XQGHUO\LQJ&RXQW2QHDQGWKDWXQGHUO\LQJ&RXQW7ZR,GDW FDQ VKRZ WKDW WKH ILUHDUPV ZHUH mFRQQHFWHGl RU SDUW RI D 7KHUHIRUHWKHJRYHUQPHQWjVFDVHIRUMRLQGHUGHSHQGV mFRPPRQ SODQl ZLWK VRPH XQFKDUJHG GUXJ DFWLYLW\ WKDW XSRQZKHWKHUWKHWZRRIIHQVHVZHUHRIWKHmVDPHRUVLPLODU RFFXUUHGWZR\HDUVEHIRUHWKHsXQH DUUHVW7KLVGRHVQRW FKDUDFWHUl)(' 5 &5,0 3  D  VKRZWKDWWKHWZRRIIHQVHVFKDUJHGLQWKHLQGLFWPHQWnLH WKHSXUFKDVHRIWKHILUHDUPDQGWKHGHIHQGDQWjVSRVVHVVLRQRI :HFRQFOXGHWKDWWKHILUHDUPVFKDUJHZDVQRWRIWKHmVDPH QDUFRWLFV LQ   n ZHUH mFRQQHFWHG WRJHWKHUl IRU WKH RU VLPLODU FKDUDFWHUl DV WKH FUDFN FRFDLQH FKDUJH  $V WKH SXUSRVHVRI5XOH D 7KHQHDUO\WZR\HDUJDSLQWLPHZKLFK 6HYHQWK&LUFXLWKDVQRWHG m>W@KHXQODZIXOSRVVHVVLRQRID VHSDUDWHVWKHWZRFKDUJHVVWURQJO\UHIXWHVDQ\LQIHUHQFHRI ILUHDUPLVDQRIIHQVHZKROO\GLVWLQFWIURPWKHGLVWULEXWLRQ VXFKDFRQQHFWLRQ1RUGRHVWKHIDFWWKDWFUDFNFRFDLQHZDV RIQDUFRWLFVHVWDEOLVKHGRQSURRIRIHOHPHQWVXQLTXHWRWKDW SUHVHQW DW WKH WLPH RI WKH ILUHDUPV RIIHQVH WUDQVIRUP WKH RIIHQVHl+XEEDUG)GDW VHHDOVR7HUU\  LOOHJDOSXUFKDVHRIDILUHDUPLQWRDQRIIHQVHmRIWKHVDPHRU )G DW   /LNHZLVH FDXVLQJ VRPHRQH WR PDNH IDOVH VLPLODU FKDUDFWHUl WR SRVVHVVLRQ RI FUDFN FRFDLQH  $V WKH VWDWHPHQWVWRDIHGHUDOO\OLFHQVHGILUHDUPVGHDOHULVDQHQWLUHO\ 6HYHQWK&LUFXLWQRWHGLQ+XEEDUG GLVWLQFWRIIHQVHIURPSRVVHVVLQJZLWKLQWHQWWRGLVWULEXWHFUDFN FRFDLQH$OWKRXJKGUXJVDQGJXQVDUHIUHTXHQWO\FRQQHFWHG 7KHXQODZIXOSRVVHVVLRQRIDILUHDUPLVQRWLQRWKHU LQSDUWLFXODUFULPLQDODFWLYLWLHVZKLFKZRXOGSHUPLWMRLQGHU ZRUGV D FULPH mRI WKH VDPH RU VLPLODU FKDUDFWHUl WR XQGHU WKH mWKH VDPH DFW RU WUDQVDFWLRQl RU WKH mFRPPRQ QDUFRWLFVWUDIILFNLQJIRUSXUSRVHVRI5XOH D 7UXHWKH VFKHPHRUSODQlSURQJVRI5XOH D LQWKHDEVWUDFWLOOHJDOO\ WZRGRRIWHQRFFXUKDQGLQKDQGDQGLQWKDWVHQVHWKH\ SXUFKDVLQJ D ILUHDUP GRHV QRW QHFHVVDULO\ LQYROYH GUXJ PLJKW EH GHHPHG mFRQQHFWHG WRJHWKHUl RU mSDUWV RI D DFWLYLW\ FRPPRQ VFKHPH RU SODQl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j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mWKHSUHGRPLQDQWFRQVLGHUDWLRQl  8QLWHG6WDWHVY&KDYLV 1R  1R  8QLWHG6WDWHVY&KDYLV  FKDUJHVZHUHHLWKHUmFRQQHFWHGWRJHWKHUlRUZHUHRIDmVLPLODU 7KH JRYHUQPHQW DUJXHV KRZHYHU WKDW EHFDXVH JXQV DUH FKDUDFWHUl,GDW7KHFRXUWUHMHFWHGERWKDUJXPHQWV WRROVRIWKHGUXJWUDGHDQGEHFDXVHWKHUHLVHYLGHQFHOLQNLQJ 7KH FRXUW QRWHG WKDW MRLQGHU LV IUHTXHQWO\ SHUPLWWHG ZKHQ WKHILUHDUPVSXUFKDVHZLWKGUXJDFWLYLW\WKHUHLVDVXIILFLHQW ILUHDUPV DUH GLVFRYHUHG DORQJ ZLWK HYLGHQFH RI GUXJ FRQQHFWLRQEHWZHHQWKHWZRRIIHQVHVWRSHUPLWMRLQGHU7KH WUDIILFNLQJmGXHWRWKHQDWXUDOLQIHUHQFHVWKDWPD\EHGUDZQ mWRROVRIWKHWUDGHlDUJXPHQWJHQHUDOO\SHUPLWVMRLQGHURQO\ IURPWKHFRQWHPSRUDQHRXVSRVVHVVLRQRIJXQVDQGGUXJV ZKHQ WKH ILUHDUPV FKDUJHV DQG WKH GUXJ FKDUJHV DUH WKHILUHDUPLVDQLQGLFDWLRQRIGUXJDFWLYLW\DQGSDUWLFLSDWLRQ mVXIILFLHQWO\FRQQHFWHGWHPSRUDOO\RUORJLFDOO\WRVXSSRUWWKH LQGUXJWUDIILFNLQJVXSSOLHVDPRWLYHIRUKDYLQJWKHJXQl,G FRQFOXVLRQ WKDW WKH WZR FULPHV DUH SDUW RI WKH VDPH 7KH FRXUW IRXQG WKHVH FDVHV GLVWLQJXLVKDEOH IURP WKH WUDQVDFWLRQ RU SODQl DV ZKHQ JXQV DUH XVHG LQ FRQQHFWLRQ GHIHQGDQWjVFDVHKRZHYHUGXHWRWKHIDFWWKDWmDVLJQLILFDQW ZLWK WKH GUXJ RIIHQVH RU ZKHQ ERWK JXQV DQG GUXJV DUH H[SDQVHRIWLPHVHSDUDWH>G@WKHGLVFRYHU\RIWKHILUHDUPVIURP XQFRYHUHGLQWKHVDPHVHDUFK8QLWHG6WDWHVY*RUHFNL WKHFRQGXFWXQGHUO\LQJWKHQDUFRWLFVFKDUJHVl,G7KHFRXUW )G  G&LU  VHHDOVRHJ8QLWHG6WDWHVY QRWHGWKDWWKHUHZDVQRFRQQHFWLRQDOOHJHGEHWZHHQWKHWZR *UDKDP  )G    WK &LU   DSSURYLQJ FULPHVLQWKHLQGLFWPHQW0RUHRYHUWKHFRXUWIRXQGWKDWWKH MRLQGHU ZKHUH LQGLFWPHQW DOOHJHG WKDW GUXJV ZHUH XVHG WR SUHVHQFH RI WKH JXQ LQ WKH FRPSDUWPHQW DOOHJHGO\ XVHG WR ILQDQFH ZHDSRQV SXUFKDVHV GHIHQGDQW ZDV FKDUJHG ZLWK VWRUH GUXJV DW DQ HDUOLHU GDWH GLG QRW VXSSO\ DQ DGHTXDWH SRVVHVVLQJ ILUHDUP LQ FRQQHFWLRQ ZLWK QDUFRWLFV DQG FRQQHFWLRQEHWZHHQWKHRIIHQVHVEHFDXVHmZLWKRXWVRPHWKLQJ WHVWLPRQ\ VKRZHG RIIHQVHV RFFXUUHG LQ VDPH WLPH IUDPH  HOVHLWOLQNVWKHWZRFKDUJHVQRPRUHFORVHO\WKDQDQ\WZR FHUWGHQLHG6&W:/  8QLWHG6WDWHVY FULPHVFRPPLWWHGLQWKHVDPHUHVLGHQFHRUWKHVDPHYHKLFOHl 9RQ:LOOLH   )G    WK &LU    ILQGLQJ QR ,GDW)LQDOO\WKHFRXUWQRWHGWKDWDOWKRXJKWKHUHZDV PLVMRLQGHU ZKHUH LQGLFWPHQW FKDUJHG IHORQ LQ SRVVHVVLRQ VRPHHYLGHQWLDU\RYHUODS UHJDUGLQJWKHFRPSDUWPHQWVXFK RIIHQVH DV ZHOO DV SRVVHVVLRQ RI WKH VDPH ILUHDUPV LQ RYHUODSZDVQRWHYLGHQWRQWKHIDFHRIWKHLQGLFWPHQW,G FRQQHFWLRQ ZLWK GUXJ FULPH   ,Q VXFK FLUFXPVWDQFHV WKH SRVVHVVLRQRIDILUHDUPFDQEHFKDUDFWHUL]HGDVSDUWRImWKH 6LPLODUO\ LQ 7HUU\ WKH 1LQWK &LUFXLW IRXQG LPSURSHU VDPHDFWRUWUDQVDFWLRQlRUDVDQDFWmFRQVWLWXWLQJSDUW>@RID MRLQGHURIFKDUJHVRIQDUFRWLFVSRVVHVVLRQDQGEHLQJDIHORQ FRPPRQVFKHPHRUSODQlDVWKHQDUFRWLFVFULPHEHFDXVHWKH LQSRVVHVVLRQRIDILUHDUPZKHUHQDUFRWLFVZHUHIRXQGLQWKH ILUHDUP LV DQ LQVWUXPHQW XVHG WR DFFRPSOLVK QDUFRWLFV GHIHQGDQWjVYHKLFOHIRUW\PLOHVDZD\IURP KLVKRPHDQGD WUDIILFNLQJ6HHHJ8QLWHG6WDWHVY3ULFH)G  VHDUFKRIWKHGHIHQGDQWjVKRPHWKLUWHHQGD\VODWHUXQFRYHUHG  WK&LU  DIILUPLQJMRLQGHUmXQGHUWKHWKHRU\ DVKRWJXQEXWQRHYLGHQFHRIGUXJDFWLYLW\ )GDW WKDWWKHILUHDUPVDQGWKHGUXJVZHUHEHLQJXVHGLQSXUVXLWRI 7KHFRXUWQRWHGWKDWQRFRQQHFWLRQEHWZHHQWKHJXQDQGWKH D FRPPRQ XQODZIXO DFWLYLW\l TXRWDWLRQ RPLWWHG  8QLWHG GUXJVZDVDOOHJHGLQWKHLQGLFWPHQWDQGWKHUHZDVQRRYHUODS 6WDWHV Y 6WRNHV  )G    WK &LU  LQWKHHYLGHQFHQHHGHGWRSURYHWKHWZRRIIHQVHV,GDW m%HFDXVHZHDSRQVDUHWRROVRIWKHWUDGHRIGUXJGHDOHUVDQG 7KHFRXUWGLVWLQJXLVKHGFDVHVSHUPLWWLQJMRLQGHURIILUHDUPV DOORIWKHYLRODWLRQVRFFXUUHGDWWKHVDPHSODFHDQG DQG QDUFRWLFV RIIHQVHV RQ WKH JURXQGV WKDW m>D@OO WKH FDVHV FOHDUO\ FRQVWLWXWHG µD VHULHV RI DFWVj ZH DJUHH WKDW >WKH FLWHGE\WKHJRYHUQPHQWHLWKHULQYROYHILUHDUPVIRXQGLQ GHIHQGDQWjV@FRXQWVZHUHSURSHUO\MRLQHGl TXRWDWLRQV GHIHQGDQWVjSRVVHVVLRQDWWKHWLPHRIWKHLUDUUHVWVRUJXQVDQG DQGFLWDWLRQVRPLWWHG 8QLWHG6WDWHVY%ODNQH\ )G DPPXQLWLRQ IRXQG GXULQJ WKH VDPH VHDUFK RU DUUHVW ZKLFK   G &LU    ILQGLQJ SURSHU MRLQGHU ZKHUH XQFRYHUHGWKHGUXJVl,GDWQ mHYLGHQFH VKRZHG LQWHU DOLD WKDW >GHIHQGDQW@ ZDV VHOOLQJ ERWKFRPPRGLWLHV>GUXJVDQGJXQV@WRWKHVDPHFXVWRPHUVl DQGmRQDWOHDVWRQHRFFDVLRQKHVRXJKWWRSD\IRUJXQV