United States v. Cope, Terry

U.S. Court of Appeals for the Sixth Circuit

United States v. Cope, Terry

Opinion

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  !  5$1'$// &23(    DQG 7(55< :$<1( &23(      'HIHQGDQWV$SSHOODQWV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW&RYLQJWRQ 1R nsHQQLIHU%&RIIPDQ'LVWULFWsXGJH $UJXHG 6HSWHPEHU 'HFLGHGDQG)LOHG 1RYHPEHU  %HIRUH '$8*+75(<*,/0$1DQG*,%621&LUFXLW sXGJHV

7KH +RQRUDEOH sRKQ 5 *LEVRQ 6HQLRU &LUFXLW sXGJH RI WKH 8QLWHG 6WDWHV &RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ

  8QLWHG6WDWHVY&RSH 1RV  

BBBBBBBBBBBBBBBBB &2816(/ $5*8('   +DUU\ 3 +HOOLQJV sU +(//,1*6 3,6$&$12 &RYLQJWRQ .HQWXFN\ .HYLQ 0 0F1DOO\ 0F1$//<  2j'211(// )UDQNIRUW .HQWXFN\ IRU $SSHOODQWV  )UHGHULFN $ 6WLQH 9 $66,67$17 81,7(' 67$7(6$77251(<&RYLQJWRQ.HQWXFN\IRU$SSHOOHH 21 %5,()   +DUU\ 3 +HOOLQJV sU +(//,1*6 3,6$&$12 &RYLQJWRQ .HQWXFN\ .HYLQ 0 0F1DOO\ 0F1$//<  2j'211(// )UDQNIRUW .HQWXFN\ IRU $SSHOODQWV  )UHGHULFN $ 6WLQH 9 (GZLQ s :DOERXUQ ,,, $66,67$1781,7('67$7(6$77251(<6&RYLQJWRQ .HQWXFN\ &KDUOHV 3 :LVGRP sU $66,67$17 81,7(' 67$7(6$77251(</H[LQJWRQ.HQWXFN\IRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 521$/'/((*,/0$1&LUFXLWsXGJH%URWKHUV5DQGDOO &RSHDQG7HUU\&RSH FROOHFWLYHO\WKH&RSHV ZHUHLQGLFWHG RQHOHYHQFRXQWVRIDWWHPSWHGPXUGHUDQGILUHDUPYLRODWLRQV 7KH &RSHV ZHUH FRQYLFWHG E\ D MXU\ RQ WHQ RI WKH FRXQWV 5DQGDOO ZDV VXEVHTXHQWO\ VHQWHQFHG WR  PRQWKVj LPSULVRQPHQWDQG7HUU\WRPRQWKVjLPSULVRQPHQW%RWK QRZDSSHDOUDLVLQJDP\ULDGRILVVXHV)RUWKHUHDVRQVVHW IRUWKEHORZZH$)),50WKHMXGJPHQWVRIWKHGLVWULFWFRXUW ,%$&.*5281' 7KLV FDVH FHQWHUV DURXQG DOOHJDWLRQV UHODWLQJ WR WKH DWWHPSWHGPXUGHUVRI6DUDKsDFNVRQ(OL]DEHWKDQG5RQDOG 1LPPRDQGIRUPHU$VVLVWDQW8QLWHG6WDWHV$WWRUQH\ $86$ 'DYLG%XQQLQJsDFNVRQLV5DQGDOOjVIRUPHUILDQFHpDQG (OL]DEHWK 1LPPR ZKR LV PDUULHG WR 5RQDOG 1LPPR LV 7HUU\jVH[ZLIH$86$%XQQLQJUHSUHVHQWHGWKHJRYHUQPHQW LQSUHWULDOSURFHHGLQJVLQYROYLQJWKH&RSHV 1RV   8QLWHG6WDWHVY&RSH 

2Q0D\ 5DQGDOOZDVDUUHVWHGRQDFRPSODLQWRI LQWHUQHW KDUDVVPHQW DQG FUHGLW FDUG IUDXG  5DQGDOO KDG DOOHJHGO\ORJJHGRQWRWKHHPDLODFFRXQWRIsDFNVRQZLWKRXW KHU SHUPLVVLRQ DQG VHQW WKUHDWHQLQJ DQG KDUDVVLQJ HPDLO PHVVDJHVWRsDFNVRQjVDFTXDLQWDQFHV+HDOVRXVHGKHUFUHGLW FDUG WR SXUFKDVH FRPSXWHU HTXLSPHQW RQ WKH LQWHUQHW sDFNVRQ KDG WHUPLQDWHG KHU UHODWLRQVKLS ZLWK 5DQGDOO LQ 1RYHPEHURI  $WWKHWLPHRIKLVDUUHVW5DQGDOOFRQVHQWHGWRWKHVHDUFKRI KLVFDUE\ODZHQIRUFHPHQWRIILFHUV7KHVHDUFKXQFRYHUHGD FDOLEHUUHYROYHU5DQGDOOSRVWHGERQGZDVUHOHDVHGDQG KLVWULDOGDWHFRQWLQXHGXQWLO)HEUXDU\  ,QWKHLQWHULP0DUVKDOO&RXQW\.HQWXFN\ODZHQIRUFHPHQW RIILFHUVDUUHVWHG5DQGDOORQ'HFHPEHU IRUVHQGLQJ KDUDVVLQJ FRPPXQLFDWLRQV LQ WKH IRUP RI QXGH SLFWXUHV RI sDFNVRQWKDW5DQGDOOKDGSODFHGRQWKHGULYHZD\RIsDFNVRQjV IDWKHU  $V D UHVXOW 5DQGDOOjV ERQG VWHPPLQJ IURP WKH FRPSODLQWRILQWHUQHWKDUDVVPHQWDQGFUHGLWFDUGIUDXGZDV UHYRNHGDQGKHZDVUHWXUQHGWRMDLOWRDZDLWWULDO $W VRPH SRLQW EHIRUH 5DQGDOOjV ERQG ZDV UHYRNHGnWKH WLPH SHULRG OHW DORQH WKH H[DFW GDWH LV XQFOHDU IURP WKH UHFRUGn6KLUOH\6KHSKHUGDQDFTXDLQWDQFHRIWKH&RSHVDQG DORFDOJXQGHDOHUKDGDFRQYHUVDWLRQZLWK5DQGDOO5DQGDOO WROGKLPWKDW7HUU\mKDGDSUREOHPDQGWKDWLI>7HUU\@GLGQjW KDYHDZLWQHVVDJDLQVWKLPWKDWKLVEURWKHUZRXOG>QR ORQJHU@ KDYH D SUREOHPl  7KH SUREOHP WKDW 5DQGDOO ZDV UHIHUULQJWRLQYROYHGVWDWHFULPLQDOFKDUJHVWKDWZHUHSHQGLQJ DJDLQVW7HUU\LQ7HQQHVVHH+HWKHQH[SODLQHGWR6KLUOH\WKDW KHZRXOGSD\IRUVRPHRQHmWRJHWWKHMREGRQHl 5DQGDOOjV VLVWHU SRVWHG ERQG IRU sDVRQ *ULIILWK RQH RI 5DQGDOOjVFHOOPDWHVRQsDQXDU\ ,QH[FKDQJHIRUWKH ERQGPRQH\*ULIILWKDJUHHGWRmNQRFNRIIlsDFNVRQ5DQGDOO WROG*ULIILWKWRZDLWIRUDWHOHSKRQHFDOODFDOOWKDW*ULIILWK QHYHU UHFHLYHG  +H WKHQ WROG *ULIILWK WKDW D PHPEHU RI 5DQGDOOjVIDPLO\ZRXOGNLOOsDFNVRQLI*ULIILWKFRXOGQRWGR VR  5DQGDOO H[SUHVVHG VLPLODU VHQWLPHQWV WR RQH RI KLV EXVLQHVVSDUWQHUV&KDUOHV6WHZDUW+HDVNHG6WHZDUWLIKH  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

NQHZ ZK\ sDFNVRQ GLG QRW ZDQW WR GDWH KLP  6WHZDUW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ GHQ\LQJ UHVSRQGHGE\VD\LQJWKDWsDFNVRQZDVDIUDLG5DQGDOOZRXOG 7HUU\jVPRWLRQWRVHYHU NLOOKHU5DQGDOOUHSOLHGWKDWKHZRXOGQRWNLOOKHUEXWWKDWKH NQHZSHRSOHZKRZRXOGNLOOKHUIRUKLP ,,,&21&/86,21 2Q sDQXDU\    WHQ GD\V EHIRUH sDFNVRQ ZDV )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH VFKHGXOHG WR WHVWLI\ DJDLQVW 5DQGDOO UHJDUGLQJ WKH LQWHUQHW MXGJPHQWVRIWKHGLVWULFWFRXUW KDUDVVPHQW DQG FUHGLW FDUG IUDXG FKDUJHV VRPHRQH ILUHG JXQVKRWVDWWKHFDULQZKLFKsDFNVRQDQGKHUVRQZHUHVLWWLQJ DV WKH\ ZHUH DERXW WR SXOO RXW RI WKHLU KRPHjV JDUDJH LQ )ORUHQFH.HQWXFN\)LYHEXOOHWVZKLFKZHUHILUHGIURPD FDOLEHU UHYROYHU SHQHWUDWHG sDFNVRQjV FDU  7KH ULIOLQJ FKDUDFWHULVWLFVVKRZHGWKDWWKHEXOOHWVFRXOGKDYHEHHQILUHG IURPRQHRIWKUHHFDOLEHUUHYROYHUVODWHUIRXQGDWWKHKRPH RI WKH &RSHVj IDWKHU RU IURP WKH  FDOLEHU UHYROYHU GLVFRYHUHG IRXU PRQWKV ODWHU LQ WKH \DUG RI 7HUU\jV KRXVH %XWWKHEXOOHWVDOVRFRXOGKDYHEHHQILUHGIURPDQ\RIWR  PLOOLRQ RWKHU KDQGJXQV ZLWK WKH VDPH ULIOLQJ FKDUDFWHULVWLFV sDFNVRQ GLG QRW VHH ZKR ILUHG WKH VKRWV  6KH EHOLHYHG KRZHYHUWKDW5DQGDOOSOD\HGDUROHLQWKHVKRRWLQJGXHWRWKH WXPXOWXRXVQDWXUHRIWKHLUUHODWLRQVKLSWKHIDFWWKDWsDFNVRQ KDGWHVWLILHGDW5DQGDOOjVGHWHQWLRQKHDULQJDQGZDVVFKHGXOHG WRWHVWLI\DWKLVWULDODQG5DQGDOOjVKDYLQJFRQILGHGLQKHUWKDW KHZLVKHGWRKDYHKLVH[ZLIH6DQG\ZKRFXUUHQWO\UHVLGHV LQ'HQYHU&RORUDGRNLOOHGZLWKDQXQUHJLVWHUHGJXQ 5DQGDOOWDONHGWRWZRRWKHUIHOORZLQPDWHVsDPHV+LDWWDQG &DUO&OD\DERXWKLVGHVLUHWRKDYHsDFNVRQNLOOHG7KHGD\ DIWHU WKH VKRRWLQJ 5DQGDOO WROG &OD\ WKDW mLI VRPHWKLQJ KDSSHQHGWRKLP 5DQGDOO VRPHRQHLQKLVIDPLO\ZRXOG NLOO KHUl  $IWHU 5DQGDOO WDONHG ZLWK +LDWW DERXW KDYLQJ sDFNVRQ NLOOHG +LDWW FRQWDFWHG D )HGHUDO %XUHDX RI ,QYHVWLJDWLRQDJHQWZKRWROG+LDWWWRJLYH5DQGDOOWKHQDPH m%LOOlLI5DQGDOODSSURDFKHGKLPDJDLQDERXWNLOOLQJsDFNVRQ 7KHDJHQWDOVRVXSSOLHG+LDWWZLWKWKHSKRQHQXPEHURI%LOO ZKR ZDV LQ DFWXDOLW\ DQ XQGHUFRYHU VHUJHDQW ZLWK WKH &DPSEHOO&RXQW\3ROLF\'HSDUWPHQW  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

HUURU LW ZRXOG KDYH EHHQ KDUPOHVV LQ OLJKW RI WKH 5DQGDOOVXEVHTXHQWO\DVNHG+LDWWLI%LOOZRXOGmWDNHFDUH RYHUZKHOPLQJHYLGHQFHRI7HUU\jVJXLOW&I&R\Y,RZD RIVRPHERG\IRUKLPl:KHQ+LDWWUHSOLHGWKDWLWZRXOGEH 86      &RQIURQWDWLRQ &ODXVH YLRODWLRQ SRVVLEOH5DQGDOOZURWHWR7HUU\ m,IRXQGVRPHRQHZKRFDQ VXEMHFWWRKDUPOHVVHUURUDQDO\VLV  KDQGOH DOO RXU MREV  +H    ZLOO GR ZKDWHYHU QHHGV WR EH GRQH+HW\SLFDOO\ZRUNVORFDOO\KHUHEXWLVZLOOLQJWRWUDYHO F 6HYHUDQFHRIFRXQWV RXWRIWRZQWRGRVSHFLDOMREVDVVXPLQJWKHPRQH\LVULJKW %LOO #   6XSSRVHGO\ YHU\ UHDVRQDEOH TXLHW QR 7HUU\jVILQDODUJXPHQWLVWKDWWKHGLVWULFWFRXUWHUUHGZKHQ LVVXHV DQGDEOHWRGRDQ\WKLQJl+HODWHUZURWHWR7HUU\ LWGHQLHGKLVPRWLRQWRVHYHUWKHFRXQWVUHODWLQJWRWKHSORWVWR m>%LOO@UHFHQWO\GLGDMREIRUDJX\,PHW,QOHVVWKDQDZHHN PXUGHUsDFNVRQWKH1LPPRVDQG$86$%XQQLQJ:HZLOO KH SURGXFHG WKH GHVLUHG UHVXOWV  $QG DOO WKH JX\V >VLF@ UHYHUVHDGLVWULFWFRXUWjVGHQLDORIDPRWLRQIRUVHYHUDQFHRI SUREOHPVZHUHHOLPLQDWHGSHUPDQHQWO\+HKDVDFFHVVWR FRXQWVRQO\LIWKHGHQLDOFRQVWLWXWHGDQDEXVHRIGLVFUHWLRQ G\QDPLWHEODVWLQJFDSV IXVHVl 8QLWHG6WDWHVYsDFREV)G WK&LU  5DQGDOOZURWHIRXURWKHULQFULPLQDWLQJOHWWHUV7KHILUVW 5XOH D RI)HGHUDO5XOHVRI&ULPLQDO3URFHGXUHSHUPLWV ZULWWHQRQ)HEUXDU\ ZDVDGGUHVVHGWRKLVSDUHQWV m>W@ZR RU PRUH RIIHQVHV >WR@ EH FKDUJHG LQ WKH VDPH DSSULVLQJWKHPWKDWILYHmZDUQLQJVKRWVlKDGEHHQILUHGLQWR LQGLFWPHQWLIWKHRIIHQVHVFKDUJHGDUHRIWKHVDPHRU sDFNVRQjV FDU IURP D GLVWDQFH RI WKUHH WR ILYH IHHW 2Q VLPLODUFKDUDFWHURUDUHEDVHGRQWKHVDPHDFWRUWUDQVDFWLRQ 0DUFK 5DQGDOOZURWHDOHWWHUWR7HUU\UHTXHVWLQJ RURQWZRRUPRUHDFWVRUWUDQVDFWLRQVFRQQHFWHGWRJHWKHURU WKDW7HUU\DVNWKHLUIDWKHUWRPHHWZLWKmWKH+XQJDULDQlD FRQVWLWXWLQJSDUWVRIDFRPPRQVFKHPHRUSODQl6HYHUDQFH FRQWUDFW NLOOHU DOOHJHGO\ WR DUUDQJH IRU WKH PXUGHUV RI WKH RI MRLQHG RIIHQVHV LV SHUPLWWHG KRZHYHU LI VXFK MRLQGHU 1LPPRV  5DQGDOO VXEVHTXHQWO\ ZURWH D OHWWHU GDWHG ZRXOGEHSUHMXGLFLDO)HG5&ULP3 VHHDOVR8QLWHG 0DUFK WR7HUU\WRWHOOKLPWKDWsDFNVRQZRXOGOLNHO\ 6WDWHV Y &ULWWRQ  )G      WK &LU   WHVWLI\DJDLQVW5DQGDOOUHJDUGLQJWKHLQWHUQHWKDUDVVPHQWDQG VWDWLQJWKDWm5XOHDOORZVIRUVHYHUDQFH>L@ILWDSSHDUVWKDW FUHGLWFDUGIUDXGFKDUJHVEHFDXVHVKHZDVmIXOO\FRPPLWWHGWR DGHIHQGDQWRUWKHJRYHUQPHQWLVSUHMXGLFHGE\DMRLQGHURI WU\LQJWRJHWPHVHQWWRSULVRQl+HDOVRWROG7HUU\WRFRQWDFW RIIHQVHVRURIGHIHQGDQWVl  LQWHUQDOTXRWDWLRQPDUNVRPLWWHG WKHmGU\ZDOOFRQWUDFWRUlDQGWRmKDQGOHEXVLQHVVlIRUKLP DOWHUDWLRQ LQ RULJLQDO   1RQHWKHOHVV D MXU\ LV SUHVXPHG PHDQLQJ WKDW 7HUU\ ZDV WR ILQG D FRQWUDFW NLOOHU WR PXUGHU FDSDEOHRIFRQVLGHULQJHDFKFRXQWVHSDUDWHO\8QLWHG6WDWHVY sDFNVRQ  7KH IRXUWK WKH VRFDOOHG m'DGG\ IRU \RXU H\HV 5XJHULR  )G    WK &LU    DQG DQ\ RQO\ OHWWHUlZDVZULWWHQWRKLVIDWKHURQ0DUFK  DQG SUHMXGLFHPD\EHFXUHGE\OLPLWLQJLQVWUXFWLRQVsDFREV UHDGVLQSHUWLQHQWSDUWDVIROORZV )G DW   0RUHRYHU DQ DSSHOODQW PXVW VKRZ WKDW WKH GHQLDO RI KLV PRWLRQ IRU VHYHUDQFH RI FRXQWV DIIHFWHG KLV *LYHQWKDW,jPLQKHUHWKHUHjVVRPHXQVDYRU\EXVLQHVV mVXEVWDQWLDOULJKWVl8QLWHG6WDWHVY&KDYLV )G \RXQHHGWRKDQGOH&RQWDFWRXUIULHQGDQGLQTXLUH  WK&LU  DERXWWKH+XQJDULDQ ZKHWKHURUQRWKHjVVWLOOJRLQJWR 7XHVGD\jVPDUNHW:HDULQJJORYHVSXW 7HUU\KDVIDLOHGWRHVWDEOLVKWKDWWKHGHQLDORIKLVPRWLRQWR FDVKLQHDFKRIHQYHORSHVQRZ*RWRWKHPDUNHW VHYHUFRXQWVDIIHFWHGKLVVXEVWDQWLDOULJKWV,QIDFWLWLVFOHDU XQDQQRXQFHGVWDUWLQJ7XHVGD\WDNLQJWKHDERYHZLWK\RX WKDW WKH MXU\ ZDV DEOH WR FRQVLGHU HDFK FRXQW VHSDUDWHO\    2QFH \RX PHHW WKH >+XQJDULDQ@ KHjV DZDUH WKDW EHFDXVHLWDFTXLWWHG7HUU\RQDOOFKDUJHVUHODWHGWRWKHDOOHJHG WKHUHjVZRUNWREHGRQH LVLQWHUHVWHG WDNHKLPIRUD SORWWRPXUGHU$86$%XQQLQJ:HWKHUHIRUHFRQFOXGHWKDW ZDON ZKHUH \RX DUH QRW RYHUKHDUG  7HOO KLP DERXW D  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

GUHDP \RX KDG ZKHUH \RX QHHGHG D SUREOHP UHVROYHG FXUHGHYHQLIWKHMXU\LVLQVWUXFWHGWRFRQVLGHUWKHFRQIHVVLRQ SHUPDQHQWO\HLWKHUE\DFFLGHQWRUDGLVDSSHDUDQFHDQG RQO\ DV HYLGHQFH DJDLQVW WKH FRGHIHQGDQW  ,G  ,Q 8QLWHG HLWKHUDUHSHUPDQHQW7KHGHSRVLWVKRXOGEHDERXW 6WDWHVY%DUWOH)G WK&LU  WKLVFRXUW HQYHORSHV0DNHVXUH\RXDUHZHDULQJJORYHVZKHQ H[WHQGHGWKH%UXWRQSULQFLSOHE\KROGLQJWKDWDGHIHQGDQWjV \RXKDQGOHWKHVHHQYHORSHV,I\RXjUHQRWXSWRGRLQJ 6L[WK$PHQGPHQWULJKWWRFRQIURQWZLWQHVVHVLVYLRODWHGQRW WKLVWHOO7HUU\WRWHOOPH\RXFDQjWGRWKHMRE,DVNHG\RX RQO\ZKHQWKHFRXUWDGPLWVWKHFRQIHVVLRQRIDQRQWHVWLI\LQJ WRGR,I,GRQjWJHWRXWKHjOOKDYHWRKDQGOHLWZKLFKLV FRGHIHQGDQWEXWDOVRDQ\VWDWHPHQWPDGHE\DFRGHIHQGDQW ZKDWZHGRQjWZDQW,I\RXFDQjWFRQQHFWZLWKWKH WKDWLPSOLFDWHVWKHDFFXVHG7KHULJKWWRFRQIURQWZLWQHVVHV +XQJDULDQRUIRUVRPHVWUDQJHUHDVRQKHjVFKDQJHGKLV GRHV QRW DSSO\ KRZHYHU ZKHQ WKH QRQWHVWLI\LQJ PLQG,jYHJRWDFRQWDFWRXWRI3DGXFDK FRGHIHQGDQWjV WHVWLPRQ\ LV DGPLWWHG SXUVXDQW WR D KHDUVD\ H[FHSWLRQ :KLWH Y ,OOLQRLV  86     5DQGDOOjVIDWKHUVKRZHGWKHOHWWHUWR7HUU\DQGWKHWZRRI KROGLQJ WKDW mZKHUH SURIIHUHG KHDUVD\ KDV VXIILFLHQW WKHPZHQWWRDPDUNHWLQVHDUFKRIWKH+XQJDULDQZKHUHWKH\ JXDUDQWHHV RI UHOLDELOLW\ WR FRPH ZLWKLQ D ILUPO\ URRWHG ZHUH WROG WKDW WKH +XQJDULDQ mQR ORQJHU H[LVWHGl  7KH H[FHSWLRQ WR WKH KHDUVD\ UXOH WKH &RQIURQWDWLRQ &ODXVH LV JRYHUQPHQW FRQWHQGV WKDW WKH &RSHV VRXJKW WR SD\ WKH VDWLVILHGl RUIRUQRQKHDUVD\SXUSRVHV7HQQHVVHHY6WUHHW +XQJDULDQWRNLOOWKH1LPPRV  86       KROGLQJ WKDW m>W@KH QRQKHDUVD\ DVSHFWRI>WKHFRGHIHQGDQWjV@FRQIHVVLRQnQRWWRSURYHZKDW $FFRUGLQJWRWKHJRYHUQPHQWWKLVZDVQRWWKHILUVWWLPH KDSSHQHGDWWKHPXUGHUVFHQHEXWWRSURYHZKDWKDSSHQHG WKDW RQH RI WKH &RSHV KDG VRXJKW WKH VHUYLFHV RI WKH ZKHQ >WKH GHIHQGDQW@ FRQIHVVHGnUDLVHV QR &RQIURQWDWLRQ +XQJDULDQ5DQGDOOKDGSUHYLRXVO\DVNHG6KLUOH\6KHSSDUG &ODXVHFRQFHUQVl  DERXWWKHDYDLODELOLW\RIWKH+XQJDULDQLQRUGHUWRDUUDQJHIRU WKHPXUGHURIWKH1LPPRV 7HUU\ SRLQWV WR WKH DGPLVVLRQ RI YDULRXV VWDWHPHQWV WKDW DOOHJHGO\ YLRODWHG KLV 6L[WK $PHQGPHQW ULJKWV  sDFNVRQjV 2Q$SULO WKHVDPHGD\WKDW7HUU\DQGKLVIDWKHU UHSHWLWLRQRIFRPPHQWVE\5DQGDOOWKDWKHZDQWHGWRNLOOKLV YLVLWHGWKHPDUNHW7HUU\ZHQWWRWKH8QLWHG6WDWHV$WWRUQH\jV H[ZLIH  &KDUOHV 6WHZDUWjV FRQYHUVDWLRQ ZLWK 5DQGDOO LQ 2IILFHLQ&RYLQJWRQ.HQWXFN\8SRQHQWHULQJWKHEXLOGLQJ ZKLFK 6WHZDUW WROG 5DQGDOO WKDW sDFNVRQ ZDV VFDUHG RI 7HUU\ WRRN RXW D ODUJH SRFNHW NQLIH DQG DVNHG DQ 5DQGDOO  6KLUOH\ 6KHSSDUGjV NQRZOHGJH RI WKH FRQQHFWLRQ DGPLQLVWUDWLYHDVVLVWDQWLILWZDVFRQVLGHUHGDZHDSRQ+H EHWZHHQ WKH +XQJDULDQ DQG 5DQGDOO  WKH WHVWLPRQ\ RI DVNHGWRVHH$86$%XQQLQJEXWZDVWROGWKDW%XQQLQJZDV 5DQGDOOjV IDWKHU WKDW 5DQGDOO VWDWHG KLV LQWHQW WR GLVWULEXWH XQDEOHWRPHHWZLWKKLP7HUU\WKHQOHIWWKHEXLOGLQJ PRUHQXGHSKRWRJUDSKVRIsDFNVRQ *ULIILWKjV+LDWWjVDQG &OD\jVFRQYHUVDWLRQVZLWK5DQGDOO DQG5DQGDOOjVOHWWHUVWKDW /DWHUWKDWDIWHUQRRQ7HUU\ZKRKDGSUHYLRXVO\DUUDQJHGD KHZURWHZKLOHLQFDUFHUDWHG0RVWRIWKLVHYLGHQFHKRZHYHU PHHWLQJZLWKm%LOOlPHW%LOOLQ)ORUHQFH.HQWXFN\7HUU\ GRHVQRWLPSOLFDWH7HUU\)RUH[DPSOHsDFNVRQjVFRPPHQWV LQVWUXFWHG %LOO WR NLOO sDFNVRQ DQG KH SURYLGHG %LOO ZLWK 6KHSSDUGjV NQRZOHGJH RI WKH FRQQHFWLRQ EHWZHHQ WKH sDFNVRQjV IXOO QDPH DQG DGGUHVV  +H DOVR WROG %LOO WKDW +XQJDULDQDQG5DQGDOOWKHWHVWLPRQ\RIWKH&RSHVjIDWKHU sDFNVRQjVFDUDOUHDG\KDGEXOOHWKROHVLQLWDQGODXJKHGWKDW DQG6WHZDUWjVFRQYHUVDWLRQZLWK5DQGDOOKDYHQREHDULQJRQ sDFNVRQ ZDV mJXQ VK\l  %LOO DJUHHG WR NLOO sDFNVRQ IRU 7HUU\jVJXLOW7KHUHPDLQLQJHYLGHQFHWRWKHH[WHQWWKDWLW KDOIRIZKLFKKHUHTXHVWHGLPPHGLDWHO\7HUU\WKHQ LPSOLFDWHG 7HUU\ ILWV ZLWKLQ ZHOOHVWDEOLVKHG KHDUVD\ JDYH%LOODQHQYHORSHFRQWDLQLQJ H[FHSWLRQV RU ZDV DGPLWWHG IRU QRQKHDUVD\ SXUSRVHV )XUWKHUPRUHHYHQLIWKHUHKDGEHHQD&RQIURQWDWLRQ&ODXVH  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

5XOHRIWKH)HGHUDO5XOHVRI&ULPLQDO3URFHGXUHDOORZV 7RZDUG WKH HQG RI WKHLU FRQYHUVDWLRQ ZKLFK %LOO ZDV IRUmUHOLHIIURPSUHMXGLFLDOMRLQGHUlm6HYHUDQFHLVUHTXLUHG VXUUHSWLWLRXVO\UHFRUGLQJ7HUU\VXJJHVWHGWKDWKHKDGRWKHU µRQO\ LI WKHUH LV D VHULRXV ULVN WKDW D MRLQW WULDO ZRXOG SHRSOHKHZDQWHG%LOOWRPXUGHUmGRZQVRXWKlVRORQJDVWKH FRPSURPLVHDVSHFLILFWULDOULJKWRIRQHRIWKHGHIHQGDQWVRU sDFNVRQPXUGHUZHQWDFFRUGLQJWRSODQ$OWKRXJKWKHUHZDV SUHYHQWWKHMXU\IURPPDNLQJDUHOLDEOHMXGJPHQWDERXWJXLOW QRGLUHFWHYLGHQFHUHJDUGLQJZKRHOVH7HUU\ZDQWHG%LOOWR RULQQRFHQFHjl:DOOV )GDW  TXRWLQJ=DILUR NLOOWKHJRYHUQPHQWFODLPVWKDW7HUU\ZDV UHIHUULQJWRWKH 86 DW    $ MRLQW WULDO RI FRGHIHQGDQWV ZKR SUHVHQW 1LPPRVZKROLYHLQ7HQQHVVHH PXWXDOO\ DQWDJRQLVWLF GHIHQVHV LV QRW SUHMXGLFLDO SHU VH =DILUR86DW0RUHRYHUDWULDOFRXUWjVOLPLWLQJ /DZHQIRUFHPHQWRIILFHUVDUUHVWHG7HUU\DWWKHHQGRIKLV LQVWUXFWLRQVPD\mFXUHlVXFKSUHMXGLFH,GDW  FRQYHUVDWLRQZLWK%LOO:KLOHLQWHUURJDWLQJ7HUU\WKHRIILFHUV UHTXHVWHG 7HUU\jV SHUPLVVLRQ WR VHDUFK KLV WUXFN  7HUU\ 7KH &RSHV KDYH IDLOHG WR VKRZ KRZ WKH GHQLDO RI WKHLU DFTXLHVFHG DQG DFFRPSDQLHG WKHP WR WKH WUXFN ZKHUH WKH PRWLRQ IRU VHYHUDQFH SUHMXGLFHG WKHLU ULJKWV WR D IDLU WULDO RIILFHUV IRXQG DQRWKHU HQYHORSH FRQWDLQLQJ DSSUR[LPDWHO\ 7KH GLVWULFW FRXUWjV QXPHURXV OLPLWLQJ LQVWUXFWLRQV DVZHOODVVHYHUDORI5DQGDOOjVLQFULPLQDWLQJOHWWHUV DPHOLRUDWHGDQ\SRWHQWLDOSUHMXGLFH)LQDOO\DOWKRXJKLWLV LQFOXGLQJWKHm'DGG\ IRU\RXUH\HVRQO\ OHWWHUl GHEDWDEOHZKHWKHUWKH&RSHVSUHVHQWHGDQWDJRQLVWLFGHIHQVHV WKH\ KDYH IDLOHG LQ DQ\ HYHQW WR VKRZ WKDW WKHLU UHVSHFWLYH 2Q 0D\     D IHGHUDO JUDQG MXU\ LQ WKH (DVWHUQ GHIHQVHVPLVOHGRUFRQIXVHGWKHMXU\&I8QLWHG6WDWHVY 'LVWULFWRI.HQWXFN\LQGLFWHG5DQGDOODQG7HUU\RQ HOHYHQ +RUWRQ)G WK&LU   m7RSUHYDLO>RQD FRXQWV LQFOXGLQJ FRQVSLULQJ WR PXUGHU DWWHPSWHG PXUGHU PRWLRQ IRU D VHYHUDQFH@ WKH GHIHQGDQWV PXVW VKRZ WKDW DWWHPSWHG PXUGHU WR UHWDOLDWH DJDLQVW D ZLWQHVV XVH DQG DQWDJRQLVPEHWZHHQFRGHIHQGDQWVZLOOPLVOHDGRUFRQIXVH GLVFKDUJHRIDILUHDUPGXULQJDFULPHRIYLROHQFHSRVVHVVLQJ WKHMXU\l  LQWHUQDOTXRWDWLRQPDUNVRPLWWHG  D ILUHDUP ZKLOH VXEMHFW WR D GRPHVWLF YLROHQFH SURWHFWLRQ RUGHU SRVVHVVLQJ D ILUHDUP ZKLOH XQGHU LQGLFWPHQW IRU D E &RQIURQWDWLRQ&ODXVH IHORQ\RIIHQVHXVLQJWKHPDLOZLWKWKHLQWHQWWKDWPXUGHUVEH FRPPLWWHG DQG WKUHDWHQLQJ WR PXUGHU  5DQGDOO DQG 7HUU\ 7HUU\IXUWKHUDUJXHVWKDWKLVFRQYLFWLRQVKRXOGEHUHYHUVHG SOHGQRWJXLOW\WRDOOFRXQWV EHFDXVHWKHGLVWULFWFRXUWDGPLWWHGKHDUVD\VWDWHPHQWVE\KLV QRQWHVWLI\LQJFRGHIHQGDQWLQYLRODWLRQRIKLVULJKWVVHFXUHG 7KH FDVH SURFHHGHG WR WULDO RQ sDQXDU\    2Q E\WKH&RQIURQWDWLRQ&ODXVHRIWKH6L[WK$PHQGPHQW:H )HEUXDU\WKHMXU\FRQYLFWHG5DQGDOODQG7HUU\RQDOO ZLOOUHYHUVHDFRQYLFWLRQEDVHGRQWKHDGPLVVLRQRIHYLGHQFH FRXQWVH[FHSWWKRVHUHODWLQJWRWKHDOOHJHGSORWWRNLOO$86$ RQO\LIWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQDGPLWWLQJWKH %XQQLQJ  $IWHU GHQ\LQJ WKHLU PRWLRQV IRU DFTXLWWDO WKH HYLGHQFH*HQHUDO(OHFYsRLQHU86    GLVWULFWFRXUWVHQWHQFHG5DQGDOOWRPRQWKVjLPSULVRQPHQW DQG7HUU\WRPRQWKVjLPSULVRQPHQW5DQGDOODQG7HUU\ 7KH &RQIURQWDWLRQ &ODXVH SURYLGHV WKDW mLQ DOO FULPLQDO WKHQILOHGWKLVWLPHO\DSSHDO SURVHFXWLRQV WKH DFFXVHG VKDOO HQMR\ WKH ULJKW    WR EH FRQIURQWHG ZLWK WKH ZLWQHVVHV DJDLQVW KLPl  86 &RQVW ,,$1$/<6,6 DPHQG9,$QDFFXVHGLVGHSULYHGRIKLVULJKWVXQGHUWKH &RQIURQWDWLRQ&ODXVHZKHQWKHFRQIHVVLRQRIDQRQWHVWLI\LQJ $ 6XIILFLHQF\RIWKHHYLGHQFH FRGHIHQGDQW WKDW LPSOLFDWHV WKH DFFXVHG LV LQWURGXFHG LQWR HYLGHQFHDWWKHLUMRLQWWULDO%UXWRQY8QLWHG6WDWHV 86 :KHQSUHVHQWHGZLWKDFKDOOHQJHWRWKHVXIILFLHQF\RIWKH    7KLVYLRODWLRQRIWKHDFFXVHGjVULJKWVLVQRW HYLGHQFH WR VXSSRUW D FRQYLFWLRQ mWKH UHOHYDQW TXHVWLRQ LV  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

ZKHWKHU DIWHU YLHZLQJ WKH HYLGHQFH LQ WKH OLJKW PRVW RPLWWHGWKHUHIHUHQFHVWRDVSHFLILFW\SHRIILUHDUPDQGWRWKH IDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOG RZQHURIWKHILUHDUP KDYH IRXQG WKH HVVHQWLDO HOHPHQWV RI WKH FULPH EH\RQG D UHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD86 7HUU\ KDV QRW LGHQWLILHG DQ\ DXWKRULW\ WKDW PDQGDWHV WKH    HPSKDVLVLQRULJLQDO ,QPDNLQJWKLVGHWHUPLQDWLRQ SURGXFWLRQRIWKHRULJLQDOLQGLFWPHQWIRUWKHMXU\0RUHRYHU ZH mUHIUDLQ IURP LQGHSHQGHQWO\ MXGJLQJ WKH FUHGLELOLW\ RI 7HUU\ KDV QRW H[SODLQHG ZK\ WKH UHIXVDO WR SURYLGH WKH ZLWQHVVHVRU>WKH@ZHLJKWRIWKHHYLGHQFHl8QLWHG6WDWHVY RULJLQDO LQGLFWPHQW WR WKH MXU\ FRPSRXQGHG DQ\ HUURU :DOOV   )G    WK &LU    $OO UHDVRQDEOH UHJDUGLQJWKHDGPLVVLRQRIWKHJXQV1RUKDVKHVKRZQKRZ LQIHUHQFHVDUHWREHGUDZQLQWKHJRYHUQPHQWjVIDYRU8QLWHG WKH UHIXVDO WR SURYLGH WKH RULJLQDO LQGLFWPHQW WR WKH MXU\ 6WDWHVY.HOO\)G WK&LU m(YHQ SUHMXGLFHGKLPLQDQ\PDQQHU:HWKHUHIRUHILQGQRHUURU FLUFXPVWDQWLDOHYLGHQFHPD\VXVWDLQDFRQYLFWLRQVRORQJDV UHODWLQJWRWKHGLVWULFWFRXUWjVUHIXVDOWRSURYLGHWKHRULJLQDO WKHWRWDOLW\RIWKHHYLGHQFHZDVVXEVWDQWLDOHQRXJKWRHVWDEOLVK LQGLFWPHQWWRWKHMXU\ JXLOWEH\RQGDUHDVRQDEOHGRXEWl:DOOV )GDW   6HYHUDQFH  5DQGDOOjVFRQYLFWLRQ 5DQGDOODQG7HUU\ERWKDUJXHWKDWWKHGLVWULFWFRXUWHUUHGLQ 5DQGDOO DUJXHV WKDW WKH JRYHUQPHQW GLG QRW SUHVHQW UHIXVLQJWRVHYHUWKHLUFDVHV7HUU\IXUWKHUFRQWHQGVWKDWWKH VXIILFLHQWHYLGHQFHWRHVWDEOLVKKLVJXLOWZLWKUHVSHFWWRFRXQWV IDLOXUH WR VHYHU WKH FDVHV UHVXOWHG LQ WKH LQWURGXFWLRQ RI WZRIRXUILYHQLQHDQGWHQ5DQGDOOKRZHYHUZDVQHLWKHU mUDPSDQWKHDUVD\VWDWHPHQWVlE\DQRQWHVWLI\LQJFRGHIHQGDQW FKDUJHGZLWKQRUFRQYLFWHGRQFRXQWILYHVRZHZLOOWXUQRXU LHKLVEURWKHU5DQGDOO DQGWKXVYLRODWHGKLVULJKWVXQGHU DWWHQWLRQWRWKHHYLGHQFHVXSSRUWLQJWKHUHPDLQLQJFKDOOHQJHG WKH&RQIURQWDWLRQ&ODXVHRIWKH6L[WK$PHQGPHQW)LQDOO\ FRXQWV 7HUU\ PDLQWDLQV WKDW WKH GLVWULFW FRXUW HUUHG LQ UHIXVLQJ WR VHYHUWKHYDULRXVFRXQWVRIWKHLQGLFWPHQW D &RXQWWZR D 6HYHUDQFHRIFDVHV &RXQWWZRFKDUJHGWKDW5DQGDOODLGHGDQGDEHWWHG7HUU\LQ DWWHPSWLQJWRNLOOsDFNVRQZLWKWKHLQWHQWRISUHYHQWLQJKHU :HZLOOUHYHUVHDGLVWULFWFRXUWjVGHFLVLRQWRGHQ\DPRWLRQ DWWHQGDQFHDQGWHVWLPRQ\DW5DQGDOOjVXSFRPLQJWULDODOOLQ IRUVHYHUDQFHRIFRGHIHQGDQWVRQO\LIWKHGHQLDOFRQVWLWXWHGDQ YLRODWLRQ RI  86& †  D    7KH JRYHUQPHQW DEXVHRIGLVFUHWLRQ8QLWHG6WDWHVY:DOOV )G    DFFRUGLQJO\QHHGHGWRSURYHWKDW  sDFNVRQZDVVFKHGXOHG WK &LU    )RU WKH VDNH RI SURPRWLQJ HIILFLHQF\ DQG WREHDZLWQHVVDWDQXSFRPLQJMXGLFLDOSURFHHGLQJDJDLQVW DYRLGLQJWKHSRWHQWLDOIRULQFRQVLVWHQWYHUGLFWVMRLQWWULDOVRI 5DQGDOO  7HUU\DWWHPSWHGWRNLOOsDFNVRQ  7HUU\GLGVR GHIHQGDQWVZKRDUHLQGLFWHGWRJHWKHUDUHDFWXDOO\HQFRXUDJHG NQRZLQJO\ DQG ZLOIXOO\ ZLWK WKH LQWHQW WR SUHYHQW WKH UDWKHUWKDQGLVFRXUDJHG=DILURY8QLWHG6WDWHV86 DWWHQGDQFH RU WHVWLPRQ\ RI sDFNVRQ   5DQGDOO KHOSHG    VHHDOVR)HG5&ULP3 E  VWDWLQJWKDW FRPPDQGHG LQGXFHG RU HQFRXUDJHG 7HUU\ WR FRPPLW WKH m>W@ZR RU PRUH GHIHQGDQWV PD\ EH FKDUJHG LQ WKH VDPH FULPH DQG   5DQGDOO LQWHQGHG WR KHOS 7HUU\ FRPPLW WKH LQGLFWPHQWLIWKH\DUHDOOHJHGWRKDYHSDUWLFLSDWHGLQWKH FULPH VDPH DFW RU WUDQVDFWLRQ RU LQ WKH VDPH VHULHV RI DFWV RU WUDQVDFWLRQV FRQVWLWXWLQJ DQ RIIHQVH RU RIIHQVHVl   7KLV LV 5DQGDOOjVRQO\DUJXPHQWFRQFHUQLQJWKHVXIILFLHQF\RIWKH HVSHFLDOO\ WUXH ZKHQ WZR GHIHQGDQWV DUH DFFXVHG RI HYLGHQFHWRHVWDEOLVKKLVJXLOWRQFRXQWWZRZDVWKDWKHZDV SDUWLFLSDWLQJLQDFRQVSLUDF\RUMRLQWVFKHPH8QLWHG6WDWHV QRWLQYROYHGLQWKHsDQXDU\ VKRRWLQJ7KHHYLGHQFH Y:HLQHU )G  WK&LU    8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH

GLGQRWUDLVHWKLVLVVXHSULRUWR WULDOHYHQWKRXJKWKHIDFWV EHOLHVKLVFRQWHQWLRQ5DQGDOOVROLFLWHGQXPHURXVLQGLYLGXDOV XQGHUO\LQJ KLV DUJXPHQW ZHUH DSSDUHQW EHIRUH WKH WULDO ERWKEHIRUHDQGDIWHUWKHVKRRWLQJWRNLOOsDFNVRQZKRZDV FRPPHQFHGZHDUHSUHFOXGHGIURPFRQVLGHULQJWKHPHULWVRI VFKHGXOHGWRWHVWLI\DJDLQVW5DQGDOODWKLVXSFRPLQJWULDORQ KLVFRQWHQWLRQ6HHLG KROGLQJWKDWWKHGHIHQGDQWjVFODLPRI )HEUXDU\ UHJDUGLQJWKHLQWHUQHWKDUDVVPHQWDQGFUHGLW SURVHFXWRULDO PLVFRQGXFW LQ LQLWLDWLQJ D SURVHFXWLRQ ZDV FDUGIUDXGFKDUJHV0RUHRYHU5DQGDOOjV)HEUXDU\ ZDLYHGEHFDXVHKHmIDLO>HG@WRUDLVHWKLVREMHFWLRQLQDWLPHO\ OHWWHUDGGUHVVHGWRKLVSDUHQWVPHQWLRQHGWKDWILYHmZDUQLQJ IDVKLRQl  VKRWVlKDGEHHQILUHGLQWRsDFNVRQjVFDUIURPDGLVWDQFHRI WKUHHWRILYHIHHW$OWKRXJK5DQGDOOFRXOGKDYHIRXQGRXW  3URVHFXWRUjVVOLGHSUHVHQWDWLRQ GHWDLOVDERXWWKHVKRRWLQJDIWHULWRFFXUUHG SHUKDSVIURPD QHZVSDSHUDUWLFOHRUIURPIDPLO\RUIULHQGV KLVNQRZOHGJH 7HUU\QH[WDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJKLV RIVSHFLILFIDFWVDERXWWKHVKRRWLQJVWURQJO\LQGLFDWHWKDWKH PRWLRQ IRU D PLVWULDO EDVHG RQ WKH JRYHUQPHQWjV VOLGH ZDVLQWLPDWHO\LQYROYHGLQWKHSORW SUHVHQWDWLRQ EHFDXVH WKH VOLGH SUHVHQWDWLRQ UHIHUUHG WR WKH &RSHVjFRQVSLULQJWR NLOO $86$%XQQLQJ:HHPSOR\DQ 5DQGDOOZURWHDOHWWHUWR7HUU\RQ0DUFK WHOOLQJ DEXVHRIGLVFUHWLRQ VWDQGDUG ZKHQ UHYLHZLQJ WKH GLVWULFW 7HUU\ WKDW sDFNVRQ ZDV OLNHO\ WR WHVWLI\ DJDLQVW 5DQGDOO FRXUWjV GHQLDO RI D PRWLRQ IRU D PLVWULDO  8QLWHG 6WDWHV Y EHFDXVHVKHZDVmIXOO\FRPPLWWHGWRWU\LQJWRJHWPHVHQWWR <DQJ)G  WK&LU  SULVRQl,QWKHVDPHOHWWHU5DQGDOODVNHG7HUU\WRFRQWDFWWKH mGU\ZDOOFRQWUDFWRUlDQGWRmKDQGOHEXVLQHVVlIRUKLPWKHLU 7HUU\ ZDV LQ IDFW DFTXLWWHG RQ WKH FKDUJHV UHJDUGLQJ WKH FRGHZRUGVIRUILQGLQJDFRQWUDFWNLOOHUWRPXUGHUsDFNVRQ DWWHPSW WR PXUGHU $86$ %XQQLQJ  7KLV XQGHUPLQHV KLV SRVLWLRQWKDWSUHMXGLFHUHVXOWHGIURPWKHJRYHUQPHQWjVVOLGH )LQDOO\sDFNVRQZDVVFKHGXOHGWRWHVWLI\DJDLQVW5DQGDOO SUHVHQWDWLRQ:HWKHUHIRUHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLG RQO\WHQGD\VDIWHUWKHVKRRWLQJLQFLGHQW7KLVIDFWE\LWVHOI QRW DEXVH LWV GLVFUHWLRQ LQ GHQ\LQJ 7HUU\jV PRWLRQ IRU D GRHV QRW FRQFOXVLYHO\ HVWDEOLVK WKDW 5DQGDOO mKHOSHG PLVWULDO FRPPDQGHGLQGXFHGRUHQFRXUDJHGlWKHVKRRWLQJ%XWDOORI WKHDERYHPHQWLRQHGIDFWVFRQVLGHUHGWRJHWKHUDQGLQDOLJKW  2ULJLQDOVXSHUVHGHGLQGLFWPHQW PRVWIDYRUDEOHWRWKHJRYHUQPHQWZHUHVXIILFLHQWWRSHUPLW D UDWLRQDO WULHU RI IDFW WR KDYH IRXQG EH\RQG D UHDVRQDEOH 7HUU\PDNHVYDJXHDOOHJDWLRQVRIHUURUUHJDUGLQJWKHGLVWULFW GRXEWWKDWWKHJRYHUQPHQWSURYHGDOORIWKHHOHPHQWVDWLVVXH FRXUWjVUHIXVDOWRDGPLWLQWRHYLGHQFHWKHRULJLQDOLQGLFWPHQW LQFRXQWWZRDJDLQVW5DQGDOO LQWKLVFDVH:HUHYLHZWKHGLVWULFWFRXUWjVUHIXVDOWRSHUPLW WKHMXU\WRYLHZWKHRULJLQDOLQGLFWPHQWXQGHUDQDEXVHRI E &RXQWIRXU GLVFUHWLRQVWDQGDUG8QLWHG6WDWHVY6FDOHV )G  WK&LU   &RXQWIRXUFKDUJHGWKDW5DQGDOODLGHGDQGDEHWWHG7HUU\LQ NQRZLQJO\XVLQJDQGFDUU\LQJDFDOLEHUKDQGJXQGXULQJ 7HUU\PDLQWDLQVWKDWWKHGLVWULFWFRXUWjVUHIXVDOWRSURYLGH DQG LQ UHODWLRQ WR D FULPH RI YLROHQFH DQG LQ VR GRLQJ WKHRULJLQDOLQGLFWPHQWWRWKHMXU\mFRPSRXQGHGWKHHUURULQ GLVFKDUJLQJ D ILUHDUP DOO LQ YLRODWLRQ RI  86& WKHLPSURSHUDGPLVVLRQRIWKHIRXUJXQVlDQGWKXVZDUUDQWV †  F  $   8QGHU WKLV FRXQW WKH JRYHUQPHQW ZDV DQHZWULDO7KHRULJLQDOLQGLFWPHQWDOOHJHGWKDWDSDUWLFXODU UHTXLUHG WR HVWDEOLVK WKDW   7HUU\ FRPPLWWHG WKH FULPH JXQRZQHGE\WKH&RSHVjIDWKHUZDVXVHGLQWKHFRPPLVVLRQ DOOHJHG LQ FRXQW WZR   7HUU\ NQRZLQJO\ XVHG D ILUHDUP RI WKH sDQXDU\  VKRRWLQJ  7KH VXSHUVHGLQJ LQGLFWPHQW GXULQJDQGLQUHODWLRQWR7HUU\jVDOOHJHGFRPPLVVLRQRIWKDW FULPH   5DQGDOO KHOSHG FRPPDQGHG LQGXFHG RU  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

HQFRXUDJHG 7HUU\ WR FRPPLW WKH FULPH DQG   5DQGDOO HYLGHQFHLQWKHOLJKWPRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\ LQWHQGHGWRKHOS7HUU\FRPPLWWKHFULPH UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKHHVVHQWLDOHOHPHQWV RIWKHFULPHEH\RQGDUHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD 5DQGDOOjVRQO\GHIHQVHWRFRXQWIRXUDJDLQFRQVLVWHGRIKLV 86     HPSKDVLVLQRULJLQDO  DUJXPHQWWKDWKHZDVVLPSO\QRWLQYROYHGLQWKHsDQXDU\  VKRRWLQJ)RUDOORIWKHUHDVRQVVWDWHGDERYHKRZHYHU (QWUDSPHQWRFFXUVZKHQWKHJRYHUQPHQWjVDFWLRQVmLPSODQW ZHILQGKLVDUJXPHQWWREHZLWKRXWPHULW LQWKHPLQGRIDQLQQRFHQWSHUVRQWKHGLVSRVLWLRQWRFRPPLW WKH DOOHJHG RIIHQVH DQG LQGXFH LWV FRPPLVVLRQl  8QLWHG F &RXQWQLQH 6WDWHV Y 7XFNHU  )G   WK &LU    $FFRUGLQJO\ 5DQGDOO PXVW VKRZ WKDW   WKH JRYHUQPHQW &RXQWQLQHFKDUJHGWKDW5DQGDOONQRZLQJO\DQGYROXQWDULO\ LQGXFHG KLP WR FRPPLW D FULPH DQG   KH ODFNHG WKH FRQVSLUHGWRXVHWKHPDLOZLWKWKHLQWHQWWKDWWKHPXUGHUVRI SUHGLVSRVLWLRQ WR HQJDJH LQ WKH FULPLQDO DFWLYLW\  8QLWHG WKH 1LPPRV EH FRPPLWWHG LQ YLRODWLRQ RI  86& 6WDWHVY%XUQV )G  WK&LU  †  D 7KHJRYHUQPHQWQHHGHGWRSURYHWKDW  5DQGDOO FRQVSLUHGWRXVHWKHPDLOZLWKWKHLQWHQWWKDWWKHPXUGHUVRI 7KHHYLGHQFHDPSO\VKRZVWKDW5DQGDOOZDVSUHGLVSRVHGWR WKH1LPPRVEHFRPPLWWHGLQFRQVLGHUDWLRQRIPRQH\WREH HQJDJH LQ WKH FULPLQDO DFWLYLW\ RI ZKLFK KH ZDV DFFXVHG SDLGDFRQWUDFWNLOOHU  5DQGDOONQRZLQJO\DQGYROXQWDULO\ 5DQGDOOWROGsDFNVRQRQQXPHURXVRFFDVLRQVWKDWKHZDQWHG MRLQHG WKH FRQVSLUDF\ DQG   D PHPEHU RI WKH WR KDYH KLV H[ZLIH NLOOHG ZLWK DQ XQUHJLVWHUHG ILUHDUP FRQVSLUDF\nHLWKHU 5DQGDOO RU 7HUU\nGLG RQH RI WKH RYHUW 0RUHRYHU5DQGDOOjVFRQYHUVDWLRQVZLWKIHOORZLQPDWHV&OD\ DFWV GHVFULEHG LQ SDUDJUDSKV  WR  RI WKH LQGLFWPHQW WR +LDWWDQG*ULIILWKDVZHOODVKLVOHWWHUVWRKLVIDPLO\VKRZD DGYDQFHRUKHOSWKHFRQVSLUDF\ FRQYLQFLQJSUHGLVSRVLWLRQWRHQJDJHLQWKHPXUGHURXVSORWV DJDLQVWsDFNVRQDQGWKH1LPPRV 5DQGDOODUJXHVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFHW\LQJ KLPWRWKHDOOHJHGFRQVSLUDF\7KHFLUFXPVWDQWLDOHYLGHQFH  3URVHFXWRULDOPLVFRQGXFW RIIHUHG E\ WKH JRYHUQPHQW KRZHYHU ZKLFK WKH MXU\ DSSDUHQWO\DFFHSWHGSURYLGHGDVXIILFLHQWOLQN)LUVW5DQGDOO 7HUU\FRQWHQGVRQDSSHDOWKDWWKH8QLWHG6WDWHV$WWRUQH\jV DVNHG6KLUOH\6KHSSDUGLQ DERXWWKHDYDLODELOLW\RIWKH 2IILFHIRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\VKRXOGQRWKDYH +XQJDULDQDOOHJHGO\WRKDYHWKH+XQJDULDQNLOOWKH1LPPRV SURVHFXWHG WKH FDVH EHFDXVH   7HUU\ ZDV DFFXVHG RI 6HFRQG5DQGDOOjV0DUFK OHWWHUWR7HUU\LQVWUXFWHG DWWHPSWLQJ WR PXUGHU %XQQLQJ RQH RI WKH $86$jV LQ WKDW KLPWRDVNWKHLUIDWKHUWRPHHWWKH+XQJDULDQDOVRZLWKWKH RIILFHDQG  WKHSURVHFXWRUVXVHGKLVFDVHWRDGYDQFHWKHLU LQWHQWRIKDYLQJWKH1LPPRVPXUGHUHGDWWKDWWLPH$WKLUG FDUHHUV,QVKRUW7HUU\FODLPVWKDWWKH$86$ZKRSURVHFXWHG OLQNLVIRXQGLQ5DQGDOOjVm'DGG\ IRU\RXUH\HVRQO\ OHWWHUl KLV FDVH ZDV mDQ LQWHUHVWHG SURVHFXWRUl ZLWK D FRQIOLFW RI ZKLFK GLVFXVVHG 5DQGDOOjV SODQV IRU HLWKHU 7HUU\ RU WKHLU LQWHUHVW IDWKHUWRFRQWDFWWKH+XQJDULDQIRUWKHSXUSRVHRINLOOLQJWKH 1LPPRV)LQDOO\DUDWLRQDOMXURUFRXOGKDYHDJUHHGZLWKWKH m'HIHFWVDQGREMHFWLRQVEDVHGRQGHIHFWVLQWKHLQVWLWXWLRQ JRYHUQPHQWjVFRQWHQWLRQWKDW7HUU\jVDVNLQJ%LOOZKHWKHUKH RIWKHSURVHFXWLRQlKRZHYHUmPXVWEHUDLVHGSULRUWRWULDOl mGLGDQ\ZRUNGRZQVRXWKlZDVDUHIHUHQFHWRKDYLQJ%LOONLOO )HG 5 &ULP 3  E   m>7@KH SROLF\ EHKLQG WKH UXOH LV WKH1LPPRV WZRIROG UHVWULFWLRQRIµVDQGEDJJLQJjE\WKHGHIHQVHWRFUHDWH DEDVLVIRUDSRVWFRQYLFWLRQPRWLRQ DQGUHVROXWLRQRIOHJDO TXHVWLRQV SULRU WR WKH H[SHQVH RI WULDOl  8QLWHG 6WDWHV Y 2VSLQD)G WK&LU  %HFDXVH7HUU\  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

JRYHUQPHQWRUWKHFULPLQDOGHIHQGDQWLVPRUHWREODPHIRU G &RXQWWHQ WKDWGHOD\ZKHWKHULQGXHFRXUVHWKHGHIHQGDQWDVVHUWHGKLV ULJKWWRDVSHHG\WULDODQGZKHWKHUKHVXIIHUHGSUHMXGLFHDV &RXQWWHQFKDUJHGWKDW5DQGDOOXVHGWKHPDLOZLWKWKHLQWHQW WKHGHOD\jVUHVXOW." 'RJJHWWY8QLWHG6WDWHV86 WKDW WKH PXUGHUV RI WKH 1LPPRV EH FRPPLWWHG LQ     FRQVLGHUDWLRQ IRU D SD\PHQW RI PRQH\ LQ YLRODWLRQ RI  86&†  D 7HUU\FRQWHQGVWKDWWKHUHZDVLQVXIILFLHQW m8QWLO WKHUH LV VRPH GHOD\ ZKLFK LV SUHVXPSWLYHO\ HYLGHQFHWRFRQYLFWKLPRQWKLVFRXQWEHFDXVHWKHUHZDVQR SUHMXGLFLDO WKHUH LV QR QHFHVVLW\ IRU LQTXLU\ LQWR WKH RWKHU HYLGHQFHWKDWWKH&RSHVFRQVSLUHGWRNLOOWKH1LPPRVDQG IDFWRUVWKDWJRLQWRWKHEDODQFHl%DUNHUY:LQJR86 EHFDXVH WKH m'DGG\ IRU \RXU H\HV RQO\  OHWWHUl ZDV QRW    $RQH\HDUGHOD\EHWZHHQDFFXVDWLRQDQG DGGUHVVHGWR7HUU\$VH[SODLQHGDERYHKRZHYHUWKHUHZDV WKHEHJLQQLQJRIWULDOLVJHQHUDOO\FRQVLGHUHGmSUHVXPSWLYHO\ DPSOHHYLGHQFHRIVXFKDFRQVSLUDF\)XUWKHUPRUHWKHIDFW SUHMXGLFLDOl'RJJHWW86DWQ,QWKHSUHVHQW WKDWWKHOHWWHUZDVQRWGLUHFWO\DGGUHVVHGWR7HUU\LQQRZD\ FDVHWKHFULPLQDOFRPSODLQWZDVILOHGRQ0D\ DQGWKH PLWLJDWHVWKHLQFULPLQDWLQJUHIHUHQFHVWR7HUU\jVLQYROYHPHQW WULDOFRPPHQFHGRQsDQXDU\$OWKRXJKDQHLJKW LQWKHDWWHPSWWRNLOOWKH1LPPRV:HWKHUHIRUHFRQFOXGHWKDW PRQWKDQGWKUHHZHHN GHOD\ LV VXEVWDQWLDO LW LV QRW D UDWLRQDO WULHU RI IDFW FRXOG KDYH IRXQG WKDW WKH HVVHQWLDO SUHVXPSWLYHO\ SUHMXGLFLDO LQ D FDVH RI WKLV VHULRXVQHVV DQG HOHPHQWVRIWKHFULPHZHUHSURYHQDJDLQVW5DQGDOOEH\RQGD FRPSOH[LW\ UHDVRQDEOHGRXEW 7HUU\ DUJXHV LQ KLV EULHI WKDW mQHDUO\  PRQWKV LV WRR  7HUU\jVFRQYLFWLRQ ORQJlEXWKHFLWHVRQO\UREEHU\FDVHVDVDXWKRULW\7KLVLVQRW DUREEHU\FDVH5DWKHULWLVDWZRGHIHQGDQWHOHYHQFRXQW 7HUU\DUJXHVWKDWWKHJRYHUQPHQWGLGQRWSUHVHQWVXIILFLHQW FDVHWKDWLQYROYHVPXOWLSOHDOOHJDWLRQVRIDWWHPSWHGPXUGHU HYLGHQFH WR HVWDEOLVK KLV JXLOW ZLWK UHVSHFW WR FRXQWV WZR 7KHHLJKWPRQWKDQGWKUHHZHHNGHOD\ZDVQRWmXQUHDVRQDEOH IRXU ILYH VL[ DQG QLQH  :H ZLOO DGGUHVV HDFK RI KLV HQRXJK WR WULJJHU WKH %DUNHU LQTXLU\l XQGHU WKHVH DUJXPHQWVLQWXUQ FLUFXPVWDQFHV,G QRWLQJWKDWDGHOD\VXIILFLHQWWRFRQVWLWXWH SUHVXPSWLYH SUHMXGLFH m>G@HSHQG>V@ RQ WKH QDWXUH RI WKH D &RXQWWZR FKDUJHVl   $FFRUGLQJO\ ZH FRQFOXGH WKDW 7HUU\jV 6L[WK $PHQGPHQWULJKWWRDVSHHG\WULDOZDVQRWYLRODWHG &RXQWWZRFKDUJHGWKDW7HUU\DWWHPSWHGWRNLOOsDFNVRQE\ VKRRWLQJ DW KHU ZLWK D  FDOLEHU KDQGJXQ RQ sDQXDU\  * 0LVFHOODQHRXVLVVXHV   ZLWK WKH LQWHQW RI SUHYHQWLQJ KHU DWWHQGDQFH DQG WHVWLPRQ\DW5DQGDOOjVXSFRPLQJWULDODOOLQYLRODWLRQRI  (QWUDSPHQW 86&† D  7KHJRYHUQPHQWQHHGHGWRSURYHWKDW  sDFNVRQZDVVFKHGXOHGWREHDZLWQHVVDWDQXSFRPLQJ 5DQGDOOPDLQWDLQVWKDWWKHGLVWULFWFRXUWHUUHGZKHQLWIDLOHG MXGLFLDOSURFHHGLQJDJDLQVW5DQGDOO  7HUU\DWWHPSWHGWR WR GLUHFW D YHUGLFW RI DFTXLWWDO IRU KLP RQ WKH EDVLV RI NLOOsDFNVRQDQG  7HUU\GLGVRNQRZLQJO\DQGZLOIXOO\ZLWK HQWUDSPHQW$QDUJXPHQWUHJDUGLQJWKHGLVWULFWFRXUWjVIDLOXUH WKHLQWHQWWRSUHYHQWWKHDWWHQGDQFHRUWHVWLPRQ\RIsDFNVRQ WRGLUHFWDYHUGLFWRIDFTXLWWDOIRUWKHGHIHQVHRIHQWUDSPHQW LVFRQVWUXHGDVDQDWWDFNRQWKHVXIILFLHQF\RIWKHHYLGHQFH 7HUU\FRQWHQGVWKDWWKHUHZDVLQVXIILFLHQWSURRIUHJDUGLQJ 8QLWHG6WDWHVY+DPLOWRQ1R  :/  WKHVHFRQGHOHPHQWQDPHO\WKDWKHDWWHPSWHGWRNLOOsDFNVRQ WK &LU $SU     SHU FXULDP  XQSXEOLVKHG WDEOH 7KHWHVWLPRQ\DGGXFHGDWWULDOKRZHYHUVKRZHGWKDW7HUU\jV GHFLVLRQ   :H WKHUHIRUH DVN mZKHWKHU DIWHU YLHZLQJ WKH XQDFFRXQWHGIRUWLPHPDGHLWSRVVLEOHIRUKLPWRKDYHEHHQLQ  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

WKH YLFLQLW\ RI sDFNVRQjV KRPH RQ WKH PRUQLQJ RI WKH 7KHFRXUWGHQLHGWKHPRWLRQWRZLWKGUDZRQsXQH  VKRRWLQJ  0RUHRYHU WKH JXQ IRXQG LQ WKH \DUG RI 7HUU\jV 7HUU\ILOHGKLVQH[WSUHWULDOPRWLRQRQsXQH 7KUHH KRXVHDVZHOODVWKUHHJXQVRZQHGE\WKH&RSHVjIDWKHUDQG QRQH[FOXGDEOHGD\VWKXVHODSVHGEHWZHHQWKHGHQLDORIWKH WRZKLFK7HUU\KDGDFFHVVKDGJHQHUDOULIOLQJFKDUDFWHULVWLFV PRWLRQ WR ZLWKGUDZ DQG WKH ILOLQJ RI WKH QH[W PRWLRQ WKDW PDWFKHG WKH EXOOHWV ILUHG LQWR sDFNVRQjV FDU  )LQDOO\ EULQJLQJWKHWRWDOQRQH[FOXGDEOHGD\VWR 7HUU\PHWZLWK%LOO DIWHUWKHsDQXDU\ VKRRWLQJWR DUUDQJHIRU%LOOWRPXUGHUsDFNVRQ+HPHQWLRQHGWR%LOOWKDW 7KH JRYHUQPHQW FRQWHQGV WKDW WKHUH ZHUH QR PRUH sDFNVRQjVFDUZDVULGGOHGZLWKEXOOHWKROHVDQGODXJKHGWKDW QRQH[FOXGDEOHGD\VEHWZHHQsXQH DQGWKHILUVWGD\ sDFNVRQZDVmJXQVK\l7KHVHIDFWVWRJHWKHUZLWK7HUU\jV RI WULDO  7HUU\ RQ WKH RWKHU KDQG DUJXHV WKDW WKH WLPH FRQWHPSRUDQHRXVLQYROYHPHQWZLWKKLVEURWKHULQDQHIIRUWWR EHWZHHQ$XJXVW ZKHQWKHPDJLVWUDWHMXGJHJUDQWHG ULG WKHPVHOYHV RI mSUREOHPl ZLWQHVVHV ZRXOG SHUPLW D 5DQGDOOjV PRWLRQ IRU D FRPSHWHQF\ HYDOXDWLRQ DQG UDWLRQDOWULHURIIDFWWRILQGWKDW7HUU\DWWHPSWHGWRPXUGHU 2FWREHU ZKHQWKHFRPSHWHQF\H[DPLQDWLRQSURFHVV sDFNVRQRQsDQXDU\  ZDV FRQFOXGHG LV QRQH[FOXGDEOH WLPH  7KHVH  GD\V KRZHYHU ZHUH QHFHVVDU\ WR FRPSOHWH 5DQGDOOjV PHQWDO E &RXQWIRXU FRPSHWHQF\H[DPLQDWLRQ SURFHVV DQG WKXV DUH H[FOXGDEOH IURPWKHWLPHFDOFXODWLRQ8QLWHG6WDWHVY0XUSK\)G &RXQWIRXUFKDUJHGWKDW7HUU\NQRZLQJO\XVHGDQGFDUULHG   WK &LU   H[FOXGLQJ D OHQJWK\ WLPH SHULRG D  FDOLEHU KDQGJXQ GXULQJ DQG LQ UHODWLRQ WR D FULPH RI QHFHVVDU\ IRU WKH GHIHQGDQWjV FRPSHWHQF\H[DPLQDWLRQ YLROHQFH DQG LQ VR GRLQJ GLVFKDUJLQJ WKH ILUHDUP DOO LQ SURFHVVDQGQRWLQJWKDWmHYHU\RWKHUFLUFXLWWKDWKDVDGGUHVVHG YLRODWLRQRI86&†  F  $ 8QGHUWKLVFRXQWWKH WKH LVVXH KDV FRQFOXGHG WKDW WLPH DVVRFLDWHG ZLWK PHQWDO JRYHUQPHQW ZDV UHTXLUHG WR HVWDEOLVK WKDW   7HUU\ FRPSHWHQF\H[DPLQDWLRQVDUHH[FOXGHGIURPWKH6SHHG\7ULDO FRPPLWWHG WKH FULPH DOOHJHG LQ FRXQW WZR DQG   7HUU\ FORFNl   7HUU\ WKHUHIRUH IDLOHG WR VDWLVI\ KLV EXUGHQ RI NQRZLQJO\XVHGDILUHDUPGXULQJDQGLQUHODWLRQWRKLVDOOHJHG SURYLQJ WKDW WKH 6SHHG\ 7ULDO $FW ZDV YLRODWHG FRPPLVVLRQRIWKDWFULPH 86&† D   m7KHGHIHQGDQWVKDOOKDYHWKHEXUGHQ RISURRIRIVXSSRUWLQJVXFKPRWLRQ>WRGLVPLVVWKHLQGLFWPHQW 7HUU\jVRQO\GHIHQVHWRWKLVFRXQWFRQVLVWHGRIKLVDUJXPHQW EDVHGRQDYLRODWLRQRIWKH$FW@l 0XUSK\)GDW WKDW WKHUH ZDV QR HYLGHQFH WKDW KH FRPPLWWHG WKH FULPH  QRWLQJ WKDW WKH GHIHQGDQW UDLVLQJ D 6SHHG\ 7ULDO $FW DOOHJHGLQFRXQWWZR$VGLVFXVVHGDERYHKRZHYHUDUDWLRQDO YLRODWLRQEHDUVWKHEXUGHQRISURRI  WULHURIIDFWFRXOGKDYHIRXQGEH\RQGDUHDVRQDEOHGRXEWWKDW WKHJRYHUQPHQWKDGPHWLWVEXUGHQRISURRIUHJDUGLQJ7HUU\jV  6L[WK$PHQGPHQWULJKWWRVSHHG\WULDO LQYROYHPHQWLQWKHDWWHPSWHGPXUGHURIsDFNVRQ ,Q DGGLWLRQ WR D FULPLQDO GHIHQGDQWjV ULJKWV XQGHU WKH F &RXQWILYH 6SHHG\7ULDO$FWWKH6L[WK$PHQGPHQWJXDUDQWHHVmWKHULJKW WRDVSHHG\DQGSXEOLFWULDOl86&RQVWDPHQG9, VHHDOVR &RXQWILYHFKDUJHGWKDW7HUU\ZKLOHVXEMHFWWRDGRPHVWLF .ORSIHUY1RUWK&DUROLQD86    KROGLQJ YLROHQFH SURWHFWLRQ RUGHU NQRZLQJO\ DQG XQODZIXOO\ WKDWmWKHULJKWWRDVSHHG\WULDOLVDVIXQGDPHQWDODVDQ\RIWKH SRVVHVVHG D  FDOLEHU KDQGJXQ WKDW ZDV LQ RU DIIHFWHG ULJKWVVHFXUHGE\WKH6L[WK$PHQGPHQWl :KHWKHUWKHUHKDV FRPPHUFH DOO LQ YLRODWLRQ RI  86& †  J    7KH EHHQDYLRODWLRQRIWKHFRQVWLWXWLRQDOULJKWWRDVSHHG\WULDOLV JRYHUQPHQW DFFRUGLQJO\ QHHGHG WR SURYH WKDW   7HUU\ DIDFWLQWHQVLYHLQTXLU\UHTXLULQJWKHEDODQFLQJRImZKHWKHU NQRZLQJO\ SRVVHVVHG D ILUHDUP   DW D WLPH ZKHQ KH ZDV GHOD\ EHIRUH WULDO ZDV XQFRPPRQO\ ORQJ ZKHWKHU WKH  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

WKHILOLQJRIWKHPRWLRQWKURXJKWKHFRQFOXVLRQRIWKHKHDULQJ VXEMHFW WR D GRPHVWLF YLROHQFH SURWHFWLRQ RUGHU DQG WKDW RQRURWKHUSURPSWGLVSRVLWLRQRIVXFKPRWLRQ >DQG@  WKHILUHDUPZDVmLQRUDIIHFWLQJFRPPHUFHl GHOD\ UHDVRQDEO\ DWWULEXWDEOH WR DQ\ SHULRG QRW WR H[FHHG WKLUW\ GD\V GXULQJ ZKLFK DQ\ SURFHHGLQJ FRQFHUQLQJ WKH 7HUU\jVRQO\QHZDUJXPHQWFRQFHUQLQJWKHVXIILFLHQF\RI GHIHQGDQW LV DFWXDOO\ XQGHU DGYLVHPHQW E\ WKH FRXUWl WKHHYLGHQFHRIIHUHGWRSURYHFRXQWILYHLVWKDWWKHUHZDVQR 86&† K   SURRIWKDWWKHILUHDUPXVHGLQWKHsDQXDU\ VKRRWLQJ ZDV mLQ RU DIIHFWLQJ FRPPHUFHl  7KLV SRLQW LV UHOHYDQW 0RUHRYHUGHOD\VGXHWRFRQWLQXDQFHVJUDQWHGE\WKHFRXUW EHFDXVH †  J   mHQVXUHV >WKDW@ RQO\ WKRVH DFWLYLWLHV DUH H[FOXGHG LI mWKH HQGV RI MXVWLFH VHUYHG E\ WDNLQJ VXFK DIIHFWLQJLQWHUVWDWHFRPPHUFHIDOOZLWKLQLWVVFRSHl8QLWHG DFWLRQ RXWZHLJK WKH EHVW LQWHUHVW RI WKH SXEOLF DQG WKH 6WDWHVY%DNHU )G WK&LU  KROGLQJ GHIHQGDQWLQDVSHHG\WULDOl86&† K  $ 7KH WKDW WKLV QH[XV EHWZHHQ WKH SURKLELWHG FRQGXFW XQGHU WULDOFRXUWPXVWVWDWHRQWKHUHFRUGKRZHYHUHLWKHURUDOO\RU †  J  DQGLQWHUVWDWHFRPPHUFHSURYLGHVWKHQHFHVVDU\ LQ ZULWLQJ mLWV UHDVRQV IRU ILQGLQJ WKDW WKH HQGV RI MXVWLFH FRQQHFWLRQWR&RQJUHVVjV&RPPHUFH&ODXVHDXWKRULW\  VHUYHGE\WKHJUDQWLQJRIVXFKFRQWLQXDQFHRXWZHLJKWKHEHVW LQWHUHVWVRIWKHSXEOLFDQGWKHGHIHQGDQWLQDVSHHG\WULDOl $OWKRXJK WKH JRYHUQPHQW FRXOG QRW LGHQWLI\ ZKLFK ,G VHHDOVR8QLWHG6WDWHVY&UDZIRUG )G  SDUWLFXODUJXQZDVXVHGLQWKHVKRRWLQJLWVWKHRU\ZDVWKDW WK&LU   GLVPLVVLQJWKHLQGLFWPHQWEHFDXVHWKHWULDO 7HUU\ WUDYHOHG ZLWK D JXQ IURP KLV KRPH LQ 7HQQHVVHH WR FRXUW GLG QRW VWDWH RQ WKH UHFRUG LWV mHQGVRIMXVWLFHl sDFNVRQjV KRPH LQ .HQWXFN\ LQ RUGHU WR FDUU\ RXW WKH UHDVRQLQJ  VKRRWLQJ  7KH MXU\ DFFHSWHG WKH JRYHUQPHQWjV DUJXPHQW ZKLFKLVVXIILFLHQWWRVDWLVI\WKHmLQRUDIIHFWLQJFRPPHUFHl :KHUH DV LV WKH FDVH DW EDU PXOWLSOH GHIHQGDQWV DUH HOHPHQW6HH8QLWHG6WDWHVY)DDVVH)G WK FKDUJHG WRJHWKHU DQG QR VHYHUDQFH KDV EHHQ JUDQWHG RQH &LU  HQEDQF  FRPPHQWLQJWKDW†  J  jVIHGHUDO VSHHG\WULDOFORFNJRYHUQV86&† K  $VVXFK MXULVGLFWLRQHOHPHQWLVVDWLVILHGZKHQDILUHDUPKDVmWUDYHOHG WKHH[FOXGDEOHGHOD\RIRQHGHIHQGDQWLVDVFULEHGWRWKDWRIDOO LQWHUVWDWHl $FFRUGLQJO\WKHUHZDVVXIILFLHQWHYLGHQFHIRUD RIKLVFRGHIHQGDQWV8QLWHG6WDWHVY&XOSHSSHU )G UDWLRQDOIDFWILQGHUWRFRQFOXGHEH\RQGDUHDVRQDEOHGRXEWWKDW  WK&LU   7HUU\FRPPLWWHGWKHFULPHDOOHJHGLQFRXQWILYH 7KH JRYHUQPHQW DGPLWV WKDW WKH 6SHHG\ 7ULDO $FW FORFN G &RXQWVL[ VWDUWHG WR UXQ IROORZLQJ 5DQGDOOjV DUUDLJQPHQW RQ 0D\   5DQGDOOjVILUVWSUHWULDOPRWLRQZDVILOHGRQ0D\ &RXQW VL[ FKDUJHG WKDW 7HUU\ WUDQVSRUWHG LQ LQWHUVWDWH  ZKHQKLVDWWRUQH\ILOHGDPRWLRQWRZLWKGUDZ7KXVE\ FRPPHUFHDFDOLEHUKDQGJXQZKLOHXQGHULQGLFWPHQWIRU 0D\ QRQH[FOXGDEOHGD\VHODSVHG6HH8QLWHG DIHORQ\LQYLRODWLRQRI86&†  Q 7KHJRYHUQPHQW 6WDWHV Y <XQLV  )G     WK &LU   DFFRUGLQJO\ QHHGHG WR SURYH WKDW   7HUU\ NQRZLQJO\ LQWHUSUHWLQJ86&† K  ) WRPHDQWKDWmERWKWKH SRVVHVVHGDILUHDUP  WKHILUHDUPZDVVKLSSHGRURWKHUZLVH GDWHRQZKLFKDQHYHQWRFFXUVRUDPRWLRQLVILOHGDQGWKH WUDQVSRUWHGLQLQWHUVWDWHFRPPHUFHDQG  7HUU\ZDVXQGHU GDWHRQZKLFKWKHFRXUWGLVSRVHVRIDPRWLRQDUHH[FOXGHGl LQGLFWPHQWIRUDFULPHSXQLVKDEOHE\LPSULVRQPHQWIRUDWHUP VHHDOVR8QLWHG6WDWHVY0HQW])G WK&LU H[FHHGLQJRQH\HDUEHIRUHKHSRVVHVVHGWKHILUHDUP    FLWLQJ <XQLV DQG H[SODLQLQJ WKDW mWKH GD\ RI WKH LQGLFWPHQWLVH[FOXGHGlIURPWKHGD\WLPHSHULRG  7HUU\FRQFHGHGWKDWKHZDVXQGHULQGLFWPHQWIRUDIHORQ\DV DOOHJHGLQWKHWKLUGHOHPHQWVRWKDWKLVRQO\DUJXPHQWVDERXW WKHVXIILFLHQF\RIWKHHYLGHQFHDVWRFRXQWVL[DUHWKHVDPHDV  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

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jV DEXVH RI GLVFUHWLRQ LI DQ\ ZDV †   D   7KH JRYHUQPHQW ZDV UHTXLUHG WR SURYH WKDW KDUPOHVV*LEVRQ)GDW  7HUU\FRQVSLUHGWRXVHWKHPDLOZLWKWKHLQWHQWWKDWWKH PXUGHUV RI WKH 1LPPRV EH FRPPLWWHG LQ FRQVLGHUDWLRQ RI ) 6SHHG\WULDO PRQH\WREHSDLGDFRQWUDFWNLOOHU  7HUU\NQRZLQJO\DQG YROXQWDULO\MRLQHGWKHFRQVSLUDF\DQG  DPHPEHURIWKH :H ZLOO QRZ DGGUHVV 7HUU\jV DUJXPHQW WKDW WKH GLVWULFW FRQVSLUDF\nHLWKHU 5DQGDOO RU 7HUU\nGLG RQH RI WKH RYHUW FRXUWHUUHGE\GHQ\LQJKLVPRWLRQWRGLVPLVVWKHLQGLFWPHQW DFWV GHVFULEHG LQ SDUDJUDSKV  WR  RI WKH LQGLFWPHQW WR IRUDQDOOHJHGYLRODWLRQRI  WKH6SHHG\7ULDO$FW86& DGYDQFHRUKHOSWKHFRQVSLUDF\ ††DQG  KLV6L[WK$PHQGPHQWULJKWWRDVSHHG\ WULDO 7HUU\DUJXHVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFHWRFRQYLFW KLPRQFRXQWQLQHEHFDXVH  WKHPDLOH[FKDQJHGEHWZHHQ  6SHHG\7ULDO$FW 5DQGDOODQGKLPGLGQRWFURVVVWDWHOLQHVDQG  WKHUHZDVQR HYLGHQFHWKDWOLQNHG7HUU\WRWKHSORWWRPXUGHUWKH1LPPRV 7KLVFRXUWLQWKHSDVWKDVDSSOLHGWZRFRQIOLFWLQJVWDQGDUGV RIUHYLHZWR6SHHG\7ULDO$FWFODLPVnGHQRYRDQGDEXVHRI  1RLQWHUVWDWHPDLOUHTXLUHPHQW GLVFUHWLRQ8QLWHG6WDWHVY0XUSK\)G WK &LU FHUWGHQLHG86  :HQHHGQRWGHFLGH 7KHPXUGHUIRUKLUHVWDWXWHUHTXLUHVWKDWWKHDFWRUmXVHWKH ZKLFKVWDQGDUGRIUHYLHZLVPRUHDSSURSULDWHLQWKHSUHVHQW PDLORUDQ\IDFLOLW\LQLQWHUVWDWHRUIRUHLJQFRPPHUFHZLWK FDVHKRZHYHUEHFDXVHZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLG LQWHQWWKDWDPXUGHUEHFRPPLWWHGl,G HPSKDVLVDGGHG $ QRWHUUXQGHUHLWKHUVWDQGDUG FKDOOHQJH WR WKH ODFN RI SURRI UHJDUGLQJ WKH LQWHUVWDWH FRPPHUFH HOHPHQW LV GHHPHG WR EH D VXIILFLHQF\RIWKH 7KH$FWPDQGDWHVWKDWmWKDWDGHIHQGDQWEHEURXJKWWRWULDO HYLGHQFH DUJXPHQW QRW D FRQWHQWLRQ DERXW WKH DEVHQFH RI ZLWKLQVHYHQW\GD\VIURPWKHGDWHRIDUUHVWWKHILOLQJRIWKH VXEMHFWPDWWHUMXULVGLFWLRQ8QLWHG6WDWHVY5LGGOH )G LQGLFWPHQWRULQIRUPDWLRQRUWKHILUVWDSSHDUDQFHEHIRUHWKH   WK&LU  FRXUW ZKLFKHYHU LV ODWHUl   86& †  F   $Q LQGLFWPHQWPXVWEHGLVPLVVHGLIDFULPLQDOGHIHQGDQWLVQRW $OWKRXJK7HUU\PDLQWDLQVWKDWWKHJRYHUQPHQWjVHYLGHQFH WULHG ZLWKLQ WKH WLPH DOORZHG E\ WKH $FW   86& ZDVLQVXIILFLHQWEHFDXVHLWGLGQRWSURYHWKDW5DQGDOOjVOHWWHUV †  D    7KH $FW KRZHYHU FRQWDLQV QXPHURXV FURVVHGDQLQWHUVWDWHERXQGDU\†  D GRHVQRWUHTXLUHDQ SURYLVLRQV SHUPLWWLQJ WKH WROOLQJ RI WKH GD\ SHULRG LQWHUVWDWHPDLOLQJ7KHVWDWXWHVSHDNVRImXV>LQJ@WKHPDLORU LQFOXGLQJmGHOD\UHVXOWLQJIURPDQ\SURFHHGLQJLQFOXGLQJDQ\ DQ\ IDFLOLW\ LQ LQWHUVWDWH RU IRUHLJQ FRPPHUFHl  m>,@Q H[DPLQDWLRQVWRGHWHUPLQHWKHPHQWDOFRPSHWHQF\RIWKH LQWHUVWDWHRUIRUHLJQFRPPHUFHlPRGLILHVmIDFLOLW\lDQGQRW GHIHQGDQW GHOD\UHVXOWLQJIURPDQ\SUHWULDOPRWLRQIURP  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

IDWKHUjVKRXVHDQGRIRQHJXQIURP7HUU\jV\DUG:HZLOOQRW mPDLOl8QLWHG6WDWHVY0DUHN)G WK&LU UHYHUVHDGLVWULFWFRXUWjVGHFLVLRQFRQFHUQLQJWKHDGPLVVLRQRI   m7KH NH\ TXHVWLRQ RI VWDWXWRU\ FRQVWUXFWLRQ    LV HYLGHQFHXQOHVVWKHUXOLQJFRQVWLWXWHVDQDEXVHRIGLVFUHWLRQ ZKHWKHUWKHSKUDVHµLQLQWHUVWDWHRUIRUHLJQFRPPHUFHj *LEVRQY8QLWHG6WDWHV)G WK&LU  PRGLILHVµXVHjRUPRGLILHVµIDFLOLW\j>:@HPXVWFRQFOXGH m,Q UHYLHZLQJ WKH WULDO FRXUWjV GHFLVLRQ IRU DQ DEXVH RI WKDWµLQLQWHUVWDWHRUIRUHLJQFRPPHUFHjLVDQDGMHFWLYHSKUDVH GLVFUHWLRQWKHDSSHOODWHFRXUWPXVWYLHZWKHHYLGHQFHLQWKH WKDWPRGLILHVµIDFLOLW\jWKHQRXQWKDWLPPHGLDWHO\SUHFHGHV OLJKWPRVWIDYRUDEOHWRLWVSURSRQHQWJLYLQJWKHHYLGHQFHLWV LWoQRWDQDGYHUELDOSKUDVHWKDWPRGLILHVWKHV\QWDFWLFDOO\PRUH PD[LPXP UHDVRQDEOH SUREDWLYH IRUFH DQG LWV PLQLPXP UHPRWHYHUEµ>WR@XVHjl  HPSKDVLVLQRULJLQDO $VDPDWWHU UHDVRQDEOH SUHMXGLFLDO YDOXHl  %ODFN Y 5\GHU3,( RIVWDWXWRU\ FRQVWUXFWLRQZHDJUHHZLWKWKH)LIWK&LUFXLWjV 1DWLRQZLGH,QF)G WK&LU   LQWHUQDO DQDO\VLV TXRWDWLRQPDUNVRPLWWHG 0RUHRYHUm>H@YHQLIWKHWULDOFRXUW DEXVHV LWV GLVFUHWLRQ D QHZ WULDO LV QRW UHTXLUHG XQOHVV 7KHVWDWXWHDOVRSUHVXPHVWKDWWKHPDLOLVDSULRULIHGHUDOLQ µVXEVWDQWLDOULJKWVjRIDSDUW\DUHDIIHFWHGl,G$QHUURQHRXV QDWXUHDQDVVXPSWLRQWKDWLVEXWWUHVVHGE\WKHIDFWWKDWWKH DGPLVVLRQRIHYLGHQFHWKDWGRHVQRWDIIHFWWKHmVXEVWDQWLDO 8QLWHG 6WDWHV 3RVWDO 6HUYLFH LV D GLVWLQFWO\ IHGHUDO HQWLW\ ULJKWVl RI D SDUW\ LV FRQVLGHUHG KDUPOHVV DQG VKRXOG EH RUGDLQHGE\WKH8QLWHG6WDWHV&RQVWLWXWLRQ86&RQVWDUW GLVUHJDUGHG*LEVRQ)GDW ,†FO m7KH&RQJUHVVVKDOOKDYH3RZHU7RHVWDEOLVK 3RVW2IILFHVDQGSRVW5RDGVl :HWKHUHIRUHFRQFOXGHWKDW m7REHUHOHYDQWHYLGHQFHQHHGKDYHVRPHEHDULQJRQWKH †   D  GRHV QRW UHTXLUH WKDW WKH JRYHUQPHQW SURYH WKDW SUREDELOLW\RIµWKHH[LVWHQFHRIDQ\IDFWWKDWLVRIFRQVHTXHQFH LWHPVPDLOHGWKURXJKWKH8QLWHG6WDWHV3RVWDO6HUYLFHFURVV WRWKHGHWHUPLQDWLRQRIWKHDFWLRQjl%ODFN)GDW VWDWHERXQGDULHV$OWKRXJK7HUU\DUJXHVWKDW8QLWHG6WDWHVY TXRWLQJ)HG5(YLG 7KH&RSHVFRQWHQGWKDWWKHJXQV :HDWKHUV )G WK&LU LPSOLHVRWKHUZLVH WKDWZHUHDGPLWWHGLQWRHYLGHQFHmKDYHQRWKLQJWRGRZLWKWKH ZHQRWHWKDW:HDWKHUVGRHVQRWLQWHUSUHWWKHZRUGmPDLOlEXW FULPH FKDUJHGl  :H GLVDJUHH  $OWKRXJK WKH JRYHUQPHQW UDWKHUWKHSKUDVHmIDFLOLW\LQLQWHUVWDWHRUIRUHLJQFRPPHUFHl FRXOGQRWLGHQWLI\ZLWKFHUWDLQW\WKHJXQWKDWZDVXVHGLQWKH DQGLVWKXVLQDSSRVLWHKHUH )GDW  KROGLQJWKDW sDQXDU\ VKRRWLQJWKLVSURRIVKRZHGWKDW7HUU\KDG WKHGHIHQGDQWVjFHOOXODUWHOHSKRQHFDOOVXWLOL]HGIDFLOLWLHVLQ DFFHVVWRWKHW\SHRIJXQXVHGLQWKHVKRRWLQJ2QEDODQFH LQWHUVWDWHFRPPHUFHRQO\EHFDXVHWKHLUVHDUFKVLJQDOVFURVVHG ZHDUHRIWKHRSLQLRQWKDWWKHGLVWULFWFRXUWGLGQRWDEXVHLWV VWDWHERXQGDULHV  GLVFUHWLRQ LQ UXOLQJ WKDW WKH JXQVj SUREDWLYH YDOXH ZDV QRW VXEVWDQWLDOO\RXWZHLJKHGE\WKHLUSUHMXGLFLDOHIIHFW6HH)HG  7KHHYLGHQFHOLQNHG7HUU\WRWKHSORWWRPXUGHU 5(YLG m>(@YLGHQFHPD\EHH[FOXGHGLILWVSUREDWLYH WKH1LPPRV YDOXH LV VXEVWDQWLDOO\ RXWZHLJKHG E\ WKH GDQJHU RI XQIDLU SUHMXGLFHl  7KH HYLGHQFH GHWDLOHG LQ 3DUW ,,$F DERYH UHJDUGLQJ 5DQGDOOjV LQYROYHPHQW LQ WKH SORW WR PXUGHU WKH $FORVHULVVXHLVSUHVHQWHGDVWRZKHWKHUWKHGLVWULFWFRXUW 1LPPRVnH[FHSW IRU 5DQGDOOjV VWDWHPHQW WR 6KLUOH\ DEXVHGLWVGLVFUHWLRQLQOHDYLQJWKHJXQVRQGLVSOD\GXULQJWKH 6KHSSDUG ZKLFK ZDV DGPLWWHG RQO\ DV WR WULDO$VVWDWHGDERYHWKHUHZDVQRGLUHFWHYLGHQFHSURYLQJ 5DQGDOOnVXIILFLHQWO\LPSOLFDWHV7HUU\LQWKHFRQVSLUDF\:H WKDW DQ\ RQH RI WKHVH SDUWLFXODU JXQV ZDV XVHG LQ WKH WKHUHIRUHFRQFOXGHWKDWDUDWLRQDOMXURUFRXOGKDYHIRXQGWKDW sDQXDU\    VKRRWLQJ  7KH JRYHUQPHQWjV EDOOLVWLFV WKH JRYHUQPHQWjV SURRI DJDLQVW 7HUU\ UHJDUGLQJ DOO RI WKH H[SHUWWHVWLILHGWKDWDQ\RIWRPLOOLRQJXQVFRXOGKDYH HOHPHQWV DV WR FRXQW QLQH ZHUH HVWDEOLVKHG EH\RQG D EHHQXVHG$UHDVRQDEOHDUJXPHQWFRXOGWKHUHIRUHEHPDGH UHDVRQDEOHGRXEW  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

% 6L[WK$PHQGPHQWFKDOOHQJH 6KXWWHUV)GDW m7KHJRYHUQPHQWKDVWKHEXUGHQRI GHPRQVWUDWLQJWKDWFRQVHQWZDVµIUHHO\DQGYROXQWDULO\JLYHQj 5DQGDOO PDLQWDLQV WKDW WKH LQWURGXFWLRQ RI HYLGHQFH DQGZDVQRWWKHUHVXOWRIFRHUFLRQGXUHVVRUVXEPLVVLRQWRD REWDLQHGIURPMDLOFHOOPDWHVWXUQHGJRYHUQPHQWLQIRUPDQWV FODLPRIDXWKRULW\l  TXRWLQJ%XPSHUY1RUWK&DUROLQD  YLRODWHG KLV 6L[WK $PHQGPHQW ULJKWV  +H DUJXHV WKDW KLV 86   :HVHHQRQHHGQRWGHFLGHWKHLVVXH 6L[WK$PHQGPHQWULJKWWRFRXQVHODWWDFKHGDVRIsDQXDU\ RI FRQVHQW KRZHYHU EHFDXVH WKH VHDUFK ZDV FOHDUO\ YDOLG   WKH GDWH RI KLV DUUDLJQPHQW KHDULQJ RQ WKH LQWHUQHW XQGHUWKHDXWRPRELOHH[FHSWLRQ8QGHUWKLVH[FHSWLRQmLQ KDUDVVPHQWDQGFUHGLWFDUGIUDXGFKDUJHV5DQGDOOWKHUHIRUH FDVHVZKHUHWKHUHZDVSUREDEOHFDXVHWRVHDUFKDYHKLFOH>@D FRQWHQGVWKDWKLVLQFULPLQDWLQJFRQYHUVDWLRQVDIWHUWKDWGDWH VHDUFKLVQRWXQUHDVRQDEOHLIEDVHGRQIDFWVWKDWZRXOGMXVWLI\ VKRXOG KDYH EHHQ VXSSUHVVHG  7KH GLVWULFW FRXUW GHQLHG WKHLVVXDQFHRIDZDUUDQWHYHQWKRXJKDZDUUDQWKDVQRWEHHQ 5DQGDOOjV PRWLRQ WR VXSSUHVV  :H DSSO\ WKH mFOHDUO\ DFWXDOO\REWDLQHGl0DU\ODQGY'\VRQ86 HUURQHRXVlVWDQGDUGWRWKHGLVWULFWFRXUWjVIDFWXDOILQGLQJVDQG   HPSKDVLVRPLWWHG  UHYLHZLWVOHJDOFRQFOXVLRQVGHQRYR8QLWHG6WDWHVY9DQ 6KXWWHUV)G WK&LU   7KHDXWRPRELOHH[FHSWLRQLVDSSOLFDEOHHYHQLQQRQH[LJHQW FLUFXPVWDQFHV VR ORQJ DV WKH YHKLFOH LV PRELOH DQG ODZ 7KH 6L[WK $PHQGPHQW SURYLGHV WKDW m>L@Q DOO FULPLQDO HQIRUFHPHQWRIILFHUVKDYHSUREDEOHFDXVHWREHOLHYHWKDWLW SURVHFXWLRQVWKHDFFXVHGVKDOOHQMR\WKHULJKWWRKDYHWKH FRQWDLQVLQFULPLQDWLQJHYLGHQFH,GDWm7KHWHVWIRU $VVLVWDQFHRI&RXQVHOIRUKLVGHIHQFHl86&RQVWDPHQG µSUREDEOHFDXVHjLVVLPSO\ZKHWKHUWKHUHLVDIDLUSUREDELOLW\ 9,  6WDWHPHQWV HOLFLWHG LQ YLRODWLRQ RI RQHjV 6L[WK WKDW FRQWUDEDQG RU HYLGHQFH RI D FULPH ZLOO EH IRXQG LQ D $PHQGPHQWULJKWWRFRXQVHOPXVWEHVXSSUHVVHG0DVVLDKY SDUWLFXODUSODFHl8QLWHG6WDWHVY/XPSNLQ )G  8QLWHG6WDWHV86   %XWm>W@KH6L[WK  WK&LU   LQWHUQDOTXRWDWLRQPDUNVRPLWWHG :H $PHQGPHQW ULJKW >WR FRXQVHO@    LV RIIHQVH VSHFLILF  ,W UHYLHZGHQRYRWKHGLVWULFWFRXUWjVILQGLQJRISUREDEOHFDXVH FDQQRWEHLQYRNHGRQFHIRUDOOIXWXUHSURVHFXWLRQVIRULWGRHV IRUSXUSRVHVRIWKHDXWRPRELOHH[FHSWLRQ2UQHODVY8QLWHG QRWDWWDFKXQWLODSURVHFXWLRQLVFRPPHQFHGWKDWLVDWRUDIWHU 6WDWHV86     WKH LQLWLDWLRQ RI DGYHUVDU\ MXGLFLDO FULPLQDO SURFHHGLQJVnZKHWKHUE\ZD\RIIRUPDOFKDUJHSUHOLPLQDU\ 7KHSROLFHKDGSUREDEOHFDXVHWREHOLHYHWKDW7HUU\jVWUXFN KHDULQJLQGLFWPHQWLQIRUPDWLRQRUDUUDLJQPHQWl0F1HLOY FRQWDLQHGHYLGHQFHRIDFULPH  7KH\NQHZWKDW7HUU\KDG :LVFRQVLQ  86      LQWHUQDO TXRWDWLRQ GULYHQKLVWUXFNWRPHHWZLWK%LOODWZKLFKSRLQWKHSDLG%LOO PDUNVRPLWWHG  WRNLOOsDFNVRQ'XULQJWKHPHHWLQJ7HUU\DOVRWROG %LOO WKDW KH ZDV FRQVLGHULQJ ZKHWKHU WR DUUDQJH IRU RWKHU 7KH OHJDO SULQFLSOH VHW IRUWK E\ WKH 6XSUHPH &RXUW LQ PXUGHUV7KHUHZDVDIDLUSUREDELOLW\WKDWRWKHULQFULPLQDWLQJ 0F1HLOZDVUHFHQWO\DSSOLHGE\WKLVFRXUWLQ8QLWHG6WDWHVY HYLGHQFHnIRUH[DPSOHDQRWKHUHQYHORSHZLWKPRUHPRQH\ )RUG)G WK&LU ZKHUHWKHFRXUWQRWHG RU OHWWHUV SURYLGLQJ LQVLJKW LQWR 7HUU\jV PXUGHURXV WKDW SORWVnZRXOG EH IRXQG LQ WKH WUXFN  8QGHU WKHVH FLUFXPVWDQFHVWKHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJ7HUU\jV WKHIDFWWKDWODZ HQIRUFHPHQWRIILFLDOVDUUDQJHGIRUDQ PRWLRQWRVXSSUHVV LQIRUPDQWWRFRQYHUVHZLWKDQLQGLFWHGGHIHQGDQWDERXW RIIHQVHV RWKHU WKDQ WKRVH IRU ZKLFK WKH GHIHQGDQW KDG ( $GPLVVLRQRIJXQV EHHQ LQGLFWHG LV QRW XQODZIXO  7KXV LI DQ LQIRUPDQW mGHOLEHUDWHO\HOLFLWVlLQFULPLQDWLQJVWDWHPHQWVUHODWLQJWR %RWK 5DQGDOO DQG 7HUU\ DSSHDO WKH GLVWULFW FRXUWjV WKH FKDUJHG RIIHQVH WKH GHIHQGDQW LV HQWLWOHG WR DGPLVVLRQLQWRHYLGHQFHRIWKUHHJXQVUHFRYHUHGIURPWKHLU  8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

 5DQGDOOjVOHWWHUV VXSSUHVVLRQ RI WKRVH VWDWHPHQWV LQ WKH WULDO RQ WKH FKDUJHGRIIHQVHEXWWKH6L[WK$PHQGPHQWUDLVHVQREDU 7KH GLVWULFW FRXUW IRXQG WKDW WKH PDJLVWUDWH MXGJH KDG WRWKHLQLWLDWLRQRIWKHLQWHUYLHZLWVHOIRUWRWKHXVHRIDQ\ SUREDEOHFDXVHWRLVVXHVHDUFKZDUUDQWVWRVHDUFKIRUDQGVHL]H VWDWHPHQWVWKDWLQFULPLQDWHWKHGHIHQGDQWRQXQFKDUJHG 5DQGDOOjV OHWWHUV WR KLV IDPLO\  :KHQ UHYLHZLQJ WKH RIIHQVHV PDJLVWUDWHMXGJHjVGHFLVLRQWRLVVXHDVHDUFKZDUUDQWZHPXVW GHWHUPLQHmZKHWKHUWKHPDJLVWUDWHKDGDVXEVWDQWLDOEDVLVIRU ,GDW LQWHUQDOFLWDWLRQRPLWWHG  ILQGLQJWKDWWKHDIILGDYLWHVWDEOLVKHGSUREDEOHFDXVHWREHOLHYH WKDWWKHHYLGHQFHZRXOGEHIRXQGDWWKHSODFHFLWHGl8QLWHG 5DQGDOO DUJXHV WKDW MXGLFLDO SURFHHGLQJV DJDLQVW KLP 6WDWHVY'DYLGVRQ )G  WK&LU   UHJDUGLQJ WKH SUHVHQW FKDUJHV FRPPHQFHG RQ sDQXDU\   %XWWKHKHDULQJWKDWWRRNSODFHRQsDQXDU\ $IILGDYLWVVXEPLWWHGE\ODZHQIRUFHPHQWRIILFHUVSURYLGHG FRQFHUQHGGLIIHUHQWFULPLQDOFKDUJHVDJDLQVW5DQGDOOQDPHO\ WKH PDJLVWUDWH MXGJH ZLWK D VXEVWDQWLDO EDVLV IRU ILQGLQJ WKH LQWHUQHW KDUDVVPHQW DQG FUHGLW FDUG IUDXG FKDUJHV SUREDEOHFDXVHWREHOLHYHWKDW5DQGDOOjVOHWWHUVZRXOGFRQWDLQ $OWKRXJK WKH LQYHVWLJDWLRQ RI 5DQGDOO UHJDUGLQJ WKH LQIRUPDWLRQ DERXW WKH sDQXDU\    VKRRWLQJ  7KH sDQXDU\ VKRRWLQJZDVGLVFXVVHGDWWKHsDQXDU\ DIILGDYLWV H[SODLQHG DPRQJ RWKHU WKLQJV WKH WXPXOWXRXV   KHDULQJ RIILFLDO MXGLFLDO SURFHHGLQJV UHJDUGLQJ WKH UHODWLRQVKLS EHWZHHQ 5DQGDOO DQG sDFNVRQ 5DQGDOOjV FXUUHQWFKDUJHVGLGQRWFRPPHQFHXQWLOVHYHUDOPRQWKVODWHU KDUDVVLQJsDFNVRQsDFNVRQjVEHOLHIWKDW5DQGDOOSOD\HGDUROH %\ WKDW WLPH 5DQGDOO KDG DOUHDG\ PDGH WKH LQFULPLQDWLQJ LQWKHsDQXDU\ VKRRWLQJ5DQGDOOjVVWDWHPHQWVWKDWKH VWDWHPHQWVLQTXHVWLRQ%HFDXVH5DQGDOOjV6L[WK$PHQGPHQW GHVLUHG WR NLOO KLV H[ZLIH DQG 5DQGDOOjV LQFULPLQDWLQJ ULJKWVGLGQRWDWWDFKXQWLODIWHUKLVODVWUHOHYDQWFRQYHUVDWLRQ VWDWHPHQWV FRQWDLQHG LQ WKH IRXU OHWWHUV ZULWWHQ WR IDPLO\ ZLWKWKHJRYHUQPHQWLQIRUPDQWVWKHGLVWULFWFRXUWGLGQRWHUU PHPEHUV IURP WKH MDLO LQ ZKLFK KH ZDV LQFDUFHUDWHG  :H LQGHQ\LQJ5DQGDOOjVPRWLRQWRVXSSUHVVKLVVWDWHPHQWVPDGH WKHUHIRUHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUUZKHQLW WRWKHP GHQLHG5DQGDOOjVVXSSUHVVLRQPRWLRQ & )LIWK$PHQGPHQWDQGWKH$%$&RGHRI3URIHVVLRQDO  7HUU\jVWUXFN 5HVSRQVLELOLW\FKDOOHQJHV m>$@ VHDUFK FRQGXFWHG ZLWKRXW D ZDUUDQW LVVXHG XSRQ 5DQGDOOjV QH[W FRQWHQWLRQ LV WKDW WKH LQWURGXFWLRQ LQWR SUREDEOHFDXVHLVSHUVHXQUHDVRQDEOHVXEMHFWRQO\WRD HYLGHQFH RI KLV LQFULPLQDWLQJ VWDWHPHQWV PDGH WR WKH IHZVSHFLILFDOO\HVWDEOLVKHGDQGZHOOGHOLQHDWHGH[FHSWLRQVl FRQILGHQWLDOLQIRUPDQWVYLRODWHGKLV)LIWK$PHQGPHQWULJKWV 6FKQHFNORWK Y %XVWDPRQWH  86      DQG WKDW WKH JRYHUQPHQWjV ZRUNLQJ ZLWK FRQILGHQWLDO LQWHUQDOTXRWDWLRQPDUNVRPLWWHG $OWKRXJKWKHRIILFHUVGLG LQIRUPDQWVWRHOLFLWLQFULPLQDWLQJLQIRUPDWLRQDWDWLPHZKHQ QRWREWDLQDZDUUDQWWRVHDUFK7HUU\jVWUXFNWKHGLVWULFWFRXUW KHZDVUHSUHVHQWHGE\DQDWWRUQH\YLRODWHG'5 $  RI IRXQGWKDWWKHVHDUFKZDVYDOLGSXUVXDQWWRWKUHHH[FHSWLRQV WKH $PHULFDQ %DU $VVRFLDWLRQjV &RGH RI 3URIHVVLRQDO WRWKHZDUUDQWUHTXLUHPHQW 7HUU\jVFRQVHQWWKHDXWRPRELOH 5HVSRQVLELOLW\%HFDXVH5DQGDOOUDLVHVWKHVHLVVXHVIRUWKH H[FHSWLRQDQGDVHDUFKLQFLGHQWWR7HUU\jVDUUHVW ILUVWWLPHRQDSSHDOKHPXVWPHHWWKHmSODLQHUURUlVWDQGDUG RIUHYLHZLQRUGHUWRSUHYDLO8QLWHG6WDWHVY0RGHQD 7HUU\jV mFRQVHQWl ZDV DOOHJHGO\ JLYHQ ZKLOH EHLQJ )G   WK &LU   UHTXLULQJ WKDW WKH HUURU EH LQWHUURJDWHG E\ ODZ HQIRUFHPHQW RIILFHUV  :KHWKHU REYLRXV DIIHFW WKH VXEVWDQWLDO ULJKWV RI WKH GHIHQGDQW DQG SHUPLVVLRQ WR VHDUFK ZDV IUHHO\ JLYHQ RU ZDV WKH UHVXOW RI VHULRXVO\LPSDFWWKHIDLUQHVVLQWHJULW\RUSXEOLFUHSXWDWLRQRI FRHUFLRQ RU GXUHVV SUHVHQWV D FORVH TXHVWLRQ  6HH 9RQ WKHMXGLFLDOSURFHHGLQJV   8QLWHG6WDWHVY&RSH 1RV   1RV   8QLWHG6WDWHVY&RSH 

 )LIWK$PHQGPHQW 5DQGDOOYLRODWHG'57KLV'LVFLSOLQDU\5XOHSURYLGHV LQSHUWLQHQWSDUWDVIROORZV  7KH)LIWK$PHQGPHQWSURYLGHVFULPLQDOGHIHQGDQWVZLWKD ULJKWDJDLQVWVHOILQFULPLQDWLRQ86&RQVWDPHQG9 m1R 'XULQJ WKH FRXUVH RI KLV UHSUHVHQWDWLRQ RI D FOLHQW D SHUVRQVKDOOEHFRPSHOOHGLQDQ\FULPLQDOFDVHWREHD ODZ\HUVKDOOQRW>F@RPPXQLFDWHRUFDXVHDQRWKHUWR ZLWQHVVDJDLQVWKLPVHOIl )LIWK$PHQGPHQWULJKWVXQOLNHD FRPPXQLFDWHRQWKHVXEMHFWWRWKHUHSUHVHQWDWLRQZLWKD GHIHQGDQWjV6L[WK$PHQGPHQWULJKWVDUHQRWRIIHQVHVSHFLILF SDUW\ KH NQRZV WR EH UHSUHVHQWHG E\ D ODZ\HU LQ WKDW $UL]RQDY5REHUWVRQ86   ,Q0LUDQGD PDWWHU XQOHVV KH KDV WKH SULRU FRQVHQW RI WKH ODZ\HU Y$UL]RQD86   WKH6XSUHPH&RXUWKHOGWKDW UHSUHVHQWLQJVXFKRWKHUSDUW\RULVDXWKRUL]HGE\ODZWR RQFH DQ LQGLYLGXDO LQ FXVWRG\ LQYRNHV KLV RU KHU )LIWK GRVR $PHQGPHQWULJKWWRFRXQVHOmWKHLQWHUURJDWLRQPXVWFHDVH XQWLODQDWWRUQH\LVSUHVHQWlDQGWKHGHIHQGDQWPXVWmKDYH 5DQGDOOKDVFLWHGQRDXWKRULW\QRUKDYHZHIRXQGDQ\WR >FRXQVHO@SUHVHQWGXULQJDQ\VXEVHTXHQWTXHVWLRQLQJlLQWKH VXSSRUWKLVFRQWHQWLRQWKDWWKHJRYHUQPHQWjVZRUNLQJZLWK DEVHQFHRIDNQRZLQJDQGYROXQWDU\ZDLYHURIWKHULJKWWR FRQILGHQWLDO LQIRUPDQWV WR HOLFLW LQFULPLQDWLQJ LQIRUPDWLRQ FRXQVHO86DW VHHDOVR(GZDUGVY$UL]RQD IURPDUHSUHVHQWHGGHIHQGDQWYLRODWHV'5&I8QLWHG 86    KROGLQJWKDWLWZDVXQFRQVWLWXWLRQDOmWR 6WDWHVY+HLQ] )G  WK&LU   m7KHXVH UHLQWHUURJDWHDQDFFXVHGLQFXVWRG\LIKHKDVFOHDUO\DVVHUWHG RI LQIRUPDQWV WR JDWKHU HYLGHQFH DJDLQVW D VXVSHFW ZLOO KLVULJKWWRFRXQVHOl  JHQHUDOO\LIQRWDOPRVWDOZD\VIDOOZLWKLQWKHDPELWRIWKH µDXWKRUL]HG E\ ODZj H[FHSWLRQ WR '5 l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jFKDOOHQJHVEDVHGRQWKH)RXUWK DWPRVSKHUH DQG WKXV GRHV QRW LPSOLFDWH WKH 6HOI $PHQGPHQW ZKLFK SURWHFWV mWKH ULJKW RI WKH SHRSOH WR EH ,QFULPLQDWLRQ&ODXVHRIWKH )LIWK $PHQGPHQW,GDW  VHFXUHLQWKHLUSHUVRQVDJDLQVWXQUHDVRQDEOHVHDUFKHVDQG %HFDXVH 5DQGDOOjV )LIWK $PHQGPHQW ULJKWV DJDLQVW VHOI VHL]XUHVl86&RQVWDPHQG,95DQGDOODSSHDOVWKHGHQLDO LQFULPLQDWLRQ GLG QRW DSSO\ ZKHQ KH WDONHG ZLWK WKH RI KLV VXSSUHVVLRQ PRWLRQ UHJDUGLQJ WKH DGPLVVLRQ LQWR FRQILGHQWLDOJRYHUQPHQWLQIRUPDQWVWKHGLVWULFWFRXUWGLGQRW HYLGHQFHRIOHWWHUVWKDWKHZURWHWRKLVIDPLO\7HUU\DSSHDOV FRPPLWDQ\HUURUPXFKOHVVSODLQHUURUZKHQLWDGPLWWHGWKH WKHGHQLDORIKLVVXSSUHVVLRQPRWLRQUHJDUGLQJWKHDGPLVVLRQ LQFULPLQDWLQJVWDWHPHQWVWKDW5DQGDOOPDGHWRWKHP LQWRHYLGHQFHRILWHPVVHL]HGGXULQJWKHVHDUFKRIKLVWUXFN ,QUHYLHZLQJDGLVWULFWFRXUWjVUXOLQJRQDPRWLRQWRVXSSUHVV  $%$&RGHRI3URIHVVLRQDO5HVSRQVLELOLW\ ZH ZLOO DIILUP WKH FRXUWjV ILQGLQJV RI IDFW XQOHVV WKH\ DUH FOHDUO\ HUURQHRXV DQG ZLOO UHYLHZ GH QRYR WKH FRXUWjV 5DQGDOO DOVR FODLPV WKDW WKH JRYHUQPHQWjV ZRUNLQJ ZLWK FRQFOXVLRQVRIODZ8QLWHG6WDWHVY9RQ6KXWWHUV)G FRQILGHQWLDOLQIRUPDQWVZKRHQJDJHGLQFRQYHUVDWLRQVZLWK  WK&LU  

Reference

Status
Published