5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   8QLWHG6WDWHVY7RZQVHQG 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS BBBBBBBBBBBBBBBBB 23,1,21 81,7('67$7(6&28572)$33($/6 BBBBBBBBBBBBBBBBB )257+(6,;7+&,5&8,7 6,/(5 &LUFXLW sXGJH  'HIHQGDQW %LOO\ 0 7RZQVHQG BBBBBBBBBBBBBBBBB DSSHDOVKLVFRQYLFWLRQIRUPDQXIDFWXULQJPHWKDPSKHWDPLQH LQYLRODWLRQRI86&† D  DQG86&†7KH RQO\LVVXHLVWKHYDOLGLW\RIDVHDUFK:HDIILUPWKHGHFLVLRQ 81,7(' 67$7(6 2) $0(5,&$ ; RIWKHGLVWULFWFRXUW 3ODLQWLII$SSHOOHH   %$&.*5281'  1R Y  ,Q  D :DO0DUW HPSOR\HH FRQWDFWHG WKH 0LODQ ! 7HQQHVVHH3ROLFH'HSDUWPHQWDQGUHSRUWHGWKDWWZRPHQKDG  MXVWSXUFKDVHGDODUJHTXDQWLW\RISVHXGRHSKHGULQHWDEOHWV %,//< 0 72:16(1'  'HIHQGDQW$SSHOODQW  OLWKLXPEDWWHULHVFDPSLQJIXHODQGRWKHULWHPV2IILFHUsDVRQ :LOOLDPVUHFHLYHGDUDGLRFDOOWREHRQWKHORRNRXWIRUDZKLWH 1 &KHYUROHW%OD]HUZLWKWKHWDJQXPEHU(6$LQZKLFKWKH $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW WZRPHQKDGGULYHQDZD\IURP:DO0DUW+HREVHUYHGD IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDWsDFNVRQ YHKLFOHPDWFKLQJWKLVGHVFULSWLRQDQGWUDYHOLQJLQWKHVDPH 1RnsDPHV'7RGG&KLHI'LVWULFWsXGJH GLUHFWLRQDVUHSRUWHGE\WKHUDGLRGLVSDWFKHU%REE\6HOOHUV 6HOOHUV KDG DOVR WROG :LOOLDPV WKH QDPH RI WKH SHUVRQ WR $UJXHG $SULO ZKRP WKH YHKLFOH ZDV UHJLVWHUHG 7RZQVHQG DQG DGYLVHG :LOOLDPV WKDW KH ZDV IDPLOLDU ZLWK 7RZQVHQG DV VRPHRQH 'HFLGHGDQG)LOHG 0D\  ZKRKDGEHHQmLQYROYHGLQDQH[SORVLRQLQDPHWKODEDQGKDG EXUQWKLPVHOIDW$WZRRG>7HQQHVVHH@l$GGLWLRQDOO\&KULV %HIRUH 6,/(5*,/0$1DQG*,%%216&LUFXLWsXGJHV 9DQGLYHU DQRWKHU0LODQSDWURORIILFHU KDGUHODWHGRYHUWKH UDGLRWKDWWKHVDPHYHKLFOHUHJLVWHUHGWR7RZQVHQGKDGEHHQ BBBBBBBBBBBBBBBBB VWRSSHG SUHYLRXVO\ LQ UHODWLRQ WR WKH WKHIW RI DQK\GURXV DPPRQLD DQRWKHU LQJUHGLHQW XVHG LQ PDQXIDFWXULQJ &2816(/ PHWKDPSKHWDPLQH $5*8('   'DYLG : &DPS 3(77,*5(:  &$03 %HIRUH VWRSSLQJ WKH YHKLFOH :LOOLDPV UDGLRHG KLV sDFNVRQ 7HQQHVVHH IRU $SSHOODQW  9LFWRU / ,Y\ VXSHUYLVRUUHODWHGWKHLQIRUPDWLRQKHKDGDQGDVNHGLIKH $66,67$17 81,7(' 67$7(6 $77251(< sDFNVRQ DJUHHG WKDW WKH VWRS ZDV ZDUUDQWHG  $IWHU UHFHLYLQJ 7HQQHVVHH IRU $SSHOOHH  21 %5,()   'DYLG : &DPS FRQILUPDWLRQ:LOOLDPVDFWLYDWHGKLVOLJKWVDQGVWRSSHGWKH 3(77,*5(: &$03sDFNVRQ7HQQHVVHHIRU$SSHOODQW %OD]HU$VKHDSSURDFKHGWKHYHKLFOHKHFRXOGVHHLQWKURXJK 9LFWRU/,Y\$66,67$1781,7('67$7(6$77251(< WKHEDFNZLQGRZDQGKHREVHUYHG:DO0DUWVKRSSLQJEDJV sDFNVRQ7HQQHVVHHIRU$SSHOOHH FRQWDLQLQJMDUVFDPSLQJIXHOSVHXGRHSKHGULQHDQGFRIIHH ILOWHUV7ZRPHQZHUHLQWKHYHKLFOH:LOOLDPVDVNHGWKH

 1R 8QLWHG6WDWHVY7RZQVHQG   8QLWHG6WDWHVY7RZQVHQG 1R

GULYHU7RZQVHQGWRH[LW:LOOLDPVQRWLFHGWKDW7RZQVHQG UXOLQJLQ+HQVOH\KROGLQJWKDWWKHDGPLVVLELOLW\RIHYLGHQFH DSSHDUHGQHUYRXVDQGKDGWURXEOHWDONLQJ8SRQREVHUYLQJD XQFRYHUHGGXULQJDVHDUFKLQFLGHQWWRDQDUUHVWSURPSWHGE\ NQLIHFOLSSHGWR7RZQVHQGj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m,Q UHYLHZLQJ D GLVWULFW FRXUW V GHWHUPLQDWLRQV RQ VXSSUHVVLRQTXHVWLRQVDGLVWULFWFRXUW VIDFWXDOILQGLQJVDUH ,GDW TXRWLQJ:KLWHOH\Y:DUGHQ86 DFFHSWHG XQOHVV WKH\ DUH FOHDUO\ HUURQHRXV  KRZHYHU WKH   7KXV7RZQVHQGjVDVVHUWLRQWKDW:LOOLDPVZDVmQRW GLVWULFWFRXUW VDSSOLFDWLRQRIWKHODZWRWKHIDFWVVXFKDVD DOORZHGlWRXVHDQRWKHUSROLFHGHSDUWPHQWjVNQRZOHGJHRIRU ILQGLQJ RI SUREDEOH FDXVH LV UHYLHZHG GH QRYRl  8QLWHG H[SHULHQFH ZLWK KLP DV D VXVSHFW LV ZLWKRXW VXSSRUW 6WDWHVY7KRPDV)G WK&LU   6HOOHUVjVFRPPHQWUHJDUGLQJWKHH[SORVLRQLQ$WZRRGZDV WDQJHQWLDODQGQRWWKHSULPDU\UHDVRQIRUWKHVWRS ',6&866,21 ,QHPSKDVL]LQJWKDWKHFRPPLWWHGQRWUDIILFYLRODWLRQVSULRU 7RZQVHQG FKDOOHQJHV WKH :DO0DUW HPSOR\HHjV WLS WR WKH VWRS 7RZQVHQG DOVR FLWHV 0F&XUG\ Y 0RQWJRPHU\ UHJDUGLQJ WKH SXUFKDVH RI LQJUHGLHQWV XVHG WR PDNH &RXQW\)G WK&LU IRUWKHSURSRVLWLRQWKDW PHWKDPSKHWDPLQHDVmXQVXEVWDQWLDWHGDQGXQUHOLDEOHlFLWLQJ WKHJRYHUQPHQWPD\GHSULYHLWVFLWL]HQVRIOLEHUW\RQO\ZKHQ :LOOLDPVjV WHVWLPRQ\ WKDW mKH GLG QRW WDON GLUHFWO\ ZLWK WKHUH LV D YLDEOH FODLP WKDW DQ LQGLYLGXDO KDV FRPPLWWHG D DQ\RQH IURP :DO0DUW EXW UHVSRQGHG WR D FDOO IURP FULPH0RUHSUHFLVHO\0F&XUG\VWDWHVWKDWm>S@UREDEOHFDXVH GLVSDWFKl DQG GLG QRW mYHULI\ WKH  RULJLQDO VRXUFHl 7RZQVHQG DOVR WDNHV LVVXH ZLWK WKH GLVSDWFKHUjV UHOD\ RI LQIRUPDWLRQUHJDUGLQJKLVSUHYLRXVLQYROYHPHQWLQDQDOOHJHG  0RUHRYHU HYHQ LI WKLV FRXUWjV RSLQLRQ LQ +HQVOH\ KDG QRW EHHQ PHWKDPSKHWDPLQHODEH[SORVLRQDQGFLWHV8QLWHG6WDWHVY RYHUUXOHG E\ WKH 6XSUHPH &RXUW 7RZQVHQGjV XVH RI WKDW FDVH LV +HQVOH\  )G   WK &LU    IRU WKH LQDSSRVLWH EHFDXVH +HQVOH\ DGGUHVVHG WKH LVVXH RI ZKHWKHU D IO\HU SURSRVLWLRQ WKDW WKH )RXUWK $PHQGPHQW GRHV QRW SHUPLW UHSRUWLQJ D SDVWFULPH FRXOG SURYLGH SUREDEOH FDXVH IRU DQ DUUHVW ZH SROLFHRIILFHUVWRUHO\RQLQIRUPDWLRQIURPQHLJKERULQJSROLFH GLVWLQJXLVKHG WKDW VLWXDWLRQ IURP RQH LQ ZKLFK mWKH SROLFH RIILFHU    KDG

GHSDUWPHQWV UHJDUGLQJ D SRWHQWLDO FULPLQDO LQYHVWLJDWLRQ LQ UHDVRQ WR EHOLHYH WKDW KH ZDV LQYHVWLJDWLQJ DQ RQJRLQJFULPHl +HQVOH\   )G DW  HPSKDVLV DGGHG  ,Q WKH SUHVHQW FDVH :LOOLDPV ZDV ZKLFK QHLWKHU WKH DUUHVWLQJ RIILFHU QRU KLV GHSDUWPHQW LV LQYHVWLJDWLQJ DQ RQJRLQJ FULPH o WKH VXVSHFWHG PDQXIDFWXUH RI LQYROYHG+RZHYHUWKH6XSUHPH&RXUWUHYHUVHGWKLVFRXUWjV PHWKDPSKHWDPLQH o ZKHQ KH VWRSSHG 7RZQVHQG 1R 8QLWHG6WDWHVY7RZQVHQG   8QLWHG6WDWHVY7RZQVHQG 1R

>IRUDQDUUHVW@UHTXLUHVWKDWSROLFHKDYHUHDVRQDEO\WUXVWZRUWK\ PDWFKLQJ WKH GHVFULSWLRQ RI WKH YHKLFOH OLQNHG WR WKDW LQIRUPDWLRQ VXIILFLHQW WR ZDUUDQW DQ RIILFHU RI UHDVRQDEOH SXUFKDVH LQ DGGLWLRQ WR WKH LQIRUPDWLRQ UHJDUGLQJ FDXWLRQWREHOLHYHWKHDUUHVWHHFRPPLWWHGRULVLQWKHSURFHVV 7RZQVHQGjV SRVVLEOH SUHYLRXV LQYROYHPHQW LQ WKH LOOHJDO RI FRPPLWWLQJ DQ RIIHQVH    >DQG@ IXUWKHU UHTXLUHV WKDW PDQXIDFWXUHRIPHWKDPSKHWDPLQHSURYLGHGKLPZLWKVSHFLILF RIILFHUV DUWLFXODWH FRQFUHWH DQG REMHFWLYH IDFWV IURP ZKLFK DQG DUWLFXODEOH IDFWV MXVWLI\LQJ WKH EULHI LQYHVWLJDWRU\ VWRS WKH\ LQIHU FULPLQDO FRQGXFWl  ,G DW  LQWHUQDO FLWDWLRQV (YLGHQFH XQFRYHUHG GXULQJ WKLV VWRS LQ WXUQ SURYLGHG RPLWWHG   7RZQVHQG KRZHYHU DSSHDUV WR FROODSVH WKH SUREDEOHFDXVHIRU7RZQVHQGjVDUUHVW GLVWLQFWLRQ EHWZHHQ DQ LQYHVWLJDWRU\ VWRS DQG D IXOOEORZQ DUUHVW7KHSROLFHPD\LQLWLDWHDQLQYHVWLJDWRU\VWRSRQOHVV $)),50(' WKDQSUREDEOHFDXVHEXWWKHUHPXVWEHXQGHUWKHWRWDOLW\RI WKH FLUFXPVWDQFHV mVRPH REMHFWLYH PDQLIHVWDWLRQ WKDW WKH SHUVRQ VWRSSHG LV RU LV DERXW WR EH HQJDJHG LQ FULPLQDO DFWLYLW\l8QLWHG6WDWHVY&RUWH] 86    7KLVUHTXLUHPHQWRImUHDVRQDEOHVXVSLFLRQlPD\EHVDWLVILHG E\DQRIILFHUjVSHUVRQDOREVHUYDWLRQVVHH,OOLQRLVY:DUGORZ 86   DQG DVVWDWHGDERYH WKHFROOHFWLYH NQRZOHGJH RI WKH SROLFH  7KH GLVWULFW FRXUW IRXQG WKLV UHTXLUHPHQW VDWLVILHG EHFDXVH :LOOLDPV NQHZ    WKDW 7RZQVHQG KDG MXVW ERXJKW D ODUJH TXDQWLW\ RI LQJUHGLHQWV NQRZQWREHXVHGLQWKHPDQXIDFWXUHRIPHWKDPSKHWDPLQH  WKHFRORUPRGHODQGWDJQXPEHURI7RZQVHQGjVYHKLFOH DVZHOODVWKHGLUHFWLRQLQZKLFKLWZDVWUDYHOLQJ   WKDWWKH FDUKDGUHFHQWO\EHHQLQYROYHGLQDFKDVHUHODWLQJWRWKHWKHIW RI DQK\GURXV DPPRQLD  DQG   WKDW 7RZQVHQG KDG EHHQ LQYROYHGLQDQH[SORVLRQDWDQDOOHJHGPHWKDPSKHWDPLQHODE )ROORZLQJLWVFRQFOXVLRQWKDWWKHLQLWLDOVWRSZDVMXVWLILHGWKH GLVWULFWFRXUWIXUWKHUIRXQGWKDW:LOOLDPVjVREVHUYDQFHRIWKH NQLIHRQ7RZQVHQGjVEHOWDQGWKHQHUYRXVPDQQHULQZKLFK 7RZQVHQGZDVDFWLQJJDYHKLPWKHULJKWWRSHUIRUPDSDW GRZQ IRU ZHDSRQV ZKLFK LQ WXUQ UHYHDOHG WKH PHWKDPSKHWDPLQHLQKDOHU 7KLVDQDO\VLVLVFRUUHFWm:KLOHDQRIILFHUPDNLQJD7HUU\ VWRSPXVWKDYHPRUHWKDQDKXQFKµUHDVRQDEOHVXVSLFLRQjLV FRQVLGHUDEO\ OHVV WKDQ SURRI RI ZURQJGRLQJ E\ D SUHSRQGHUDQFHRIWKHHYLGHQFHl8QLWHG6WDWHVY+XUVW )G   WK &LU   FLWLQJ 8QLWHG 6WDWHV Y 6RNRORZ 86   :LOOLDPVjVNQRZOHGJHRIWKH DOOHJHG SXUFKDVH RI PHWKDPSKHWDPLQH SUHFXUVRUV FRXSOHG ZLWK KLV FRQWHPSRUDQHRXV REVHUYDWLRQ RI D FDU FORVHO\