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jV VHQWHQFH RI 5HQD %HQIRUG XQGHU 68=(77( 0,5$1'$ 67(:$57 E% &$/9,1 1(/621 75$0%/( &+$5/(6 5266(//DOVR NQRZQDV'RJDOVRNQRZQDV 6QRRS\7,027+ GHQRYR@VWDQGDUGRIUHYLHZLVVDWLVILHGDQGLWLV LQVWDQWFDVH,QWKDWFDVHDGHIHQGDQWZKRIDFHGDPDQGDWRU\ XQQHFHVVDU\IRUXVWRIXUWKHUGLVFXVVWKHLVVXHl)LHOGV PLQLPXP VHQWHQFH RI PRQWKV XQGHU 86& :/DW E%REWDLQHGDGRZQZDUGGHSDUWXUHPRWLRQIURP WKHJRYHUQPHQWXQGHU86&H7KHGHIHQGDQW % FODLPHGWKDWHUHTXLUHGWKDWKLVUHVXOWLQJVHQWHQFHIDOO ZLWKLQ KLV VHQWHQFLQJ JXLGHOLQH UDQJH RI WZHQW\RQH WR ,QRUGHUWRFRQGXFWHOHFWURQLFVXUYHLOODQFHXVLQJDZLUHWDS WZHQW\VHYHQ PRQWKV 7KH FRXUW UHMHFWHG WKLV DUJXPHQW IHGHUDOODZHQIRUFHPHQWRIILFLDOVPXVWVHFXUHDXWKRUL]DWLRQ ILQGLQJ LQVWHDG WKDW WKH GHIHQGDQWjV UHVXOWLQJ VHQWHQFH RI E\ PDNLQJ DQ DSSOLFDWLRQ FRQWDLQLQJ D mIXOO DQG FRPSOHWH IRUW\VHYHQ PRQWKV ZDV LPSRVHG LQ DFFRUGDQFH ZLWK WKH VWDWHPHQWDVWRZKHWKHURUQRWRWKHULQYHVWLJDWLYHSURFHGXUHV JXLGHOLQHV,QGUDZLQJWKLVFRQFOXVLRQWKHFRXUWSRLQWHGWR KDYHEHHQWULHGDQGIDLOHGRUZK\WKH\UHDVRQDEO\DSSHDUWREH ODQJXDJH LQ 866* *E SURYLGLQJ WKDW m>Z@KHUH D XQOLNHO\WRVXFFHHGLIWULHGRUWREHWRRGDQJHURXVl86& VWDWXWRULO\ UHTXLUHG PLQLPXP VHQWHQFH LV JUHDWHU WKDQ WKH F 7KLV VWDWXWRU\ mQHFHVVLW\ UHTXLUHPHQWl ZDV PD[LPXPRIWKHDSSOLFDEOHJXLGHOLQHUDQJHWKHVWDWXWRULO\ GHVLJQHGWRLQVXUHWKDWmZLUHWDSSLQJLVQRWUHVRUWHGWRLQD UHTXLUHGPLQLPXPVHQWHQFHVKDOOEHWKHJXLGHOLQHVHQWHQFHl VLWXDWLRQ LQ ZKLFK WUDGLWLRQDO LQYHVWLJDWLYH WHFKQLTXHV ZLOO +D\HV)GDW%DVHGXSRQLWVLQWHUSUHWDWLRQRIWKLV VXIILFHWRH[SRVHWKHFULPHl8QLWHG6WDWHVY$OIDQR ODQJXDJH WKH FRXUW KHOG WKDW mWKH VWDWXWRU\ PDQGDWRU\ )GWK&LU*HQHUDOO\DGLVWULFWFRXUWjV PLQLPXPVHQWHQFHEHFDPH>WKHGHIHQGDQWjV@JXLGHOLQHV ILQGLQJWKDWWKHUHTXLUHPHQWVRIFKDYHEHHQPHW UDQJHDOEHLWDQDUURZRQHl,GDW7KHFRXUWWKHUHIRUH 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO DUH DIIRUGHG mFRQVLGHUDEOH GLVFUHWLRQl 8QLWHG 6WDWHV Y UHGXFHG /DQ[WHUjV VHQWHQFH EXW WKH UHVXOWLQJ VHQWHQFH RI /DQGPHVVHU)GWK&LU QLQHW\WZRPRQWKVLPSULVRQPHQWIHOOEHWZHHQWKHVWDWXWRU\ PLQLPXPPRQWKVDQGWKHXSSHUHQGRIWKHJXLGHOLQH ,Q )UDQNV WKH 6XSUHPH &RXUW UHFRJQL]HG D GHIHQGDQWjV UDQJH VHYHQW\RQH PRQWKV /DQ[WHU QRZ DSSHDOV WKDW ULJKWWRFKDOOHQJHWKHVXIILFLHQF\RIDSUHYLRXVO\LVVXHGDQG GHFLVLRQ H[HFXWHG ZDUUDQW E\ DWWDFNLQJ WKH VWDWHPHQWV PDGH LQ DQ DIILGDYLW LQ VXSSRUW RI WKH ZDUUDQW ,Q RUGHU WR REWDLQ D $ KHDULQJWKHGHIHQGDQWPXVWPDNHDVXEVWDQWLDOSUHOLPLQDU\ VKRZLQJWKDWDIDOVHVWDWHPHQWNQRZLQJO\DQGLQWHQWLRQDOO\RU 7KHJRYHUQPHQWFRQWHQGVWKDW/DQ[WHULVFKDOOHQJLQJWKH ZLWK UHFNOHVV GLVUHJDUG IRU WKH WUXWK ZDV LQFOXGHG LQ WKH H[WHQWRIWKHFRXUWjVGRZQZDUGGHSDUWXUHZKLFKZRXOGPHDQ DIILGDYLW)UDQNV86DW,IWKHDOOHJHGO\IDOVH WKDWZHODFNMXULVGLFWLRQRYHUKLVDSSHDO6HH8QLWHG6WDWHVY VWDWHPHQWLVQHFHVVDU\WRWKHILQGLQJRISUREDEOHFDXVHWKH *UHJRU\)GWK&LUKROGLQJWKDW )RXUWK $PHQGPHQW UHTXLUHV WKDW D KHDULQJ EH KHOG DW WKH WKLV&RXUWmVKRXOGQRWDFFHSWMXULVGLFWLRQRYHUDSSHDOVEDVHG GHIHQGDQWjV UHTXHVW ,G DW 7KH GHIHQGDQW PXVW RQIDFWRUVZKLFKWKHDSSHOODQWDUJXHVVKRXOGKDYHLQIOXHQFHG VSHFLILFDOO\SRLQWWRWKHGLVSXWHGSRUWLRQVRIWKHFKDOOHQJHG WKH GHJUHH RI D GRZQZDUG GHSDUWXUHl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mLPSRVH D VHQWHQFH EHORZ D OHYHO HVWDEOLVKHG E\ VWDWXWH DV D PLQLPXP VHQWHQFH > VXFK@ ,QWKHLQVWDQWFDVHODZHQIRUFHPHQWRIILFLDOVDOOHJHGWKDW VHQWHQFHVKDOOEHLPSRVHGLQDFFRUGDQFHZLWKWKHJXLGHOLQHV ZLUHWDS VXUYHLOODQFH ZDV WKH RQO\ LQYHVWLJDWLYH WHFKQLTXH DQGSROLF\VWDWHPHQWVLVVXHGE\WKH6HQWHQFLQJ&RPPLVVLRQ UHDVRQDEO\ OLNHO\ WR HVWDEOLVK WKH IXOO VFRSH RI WKH DOOHJHG l 86& H /DQ[WHUj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jVGHFLVLRQQRWWRGHSDUWGRZQZDUG LQWKHFDVH7KLV&RXUWKDVH[SODLQHG 9,6(17(1&,1*$)7(5'2:1:$5' $GHIHQGDQWZKRFKDOOHQJHVWKHYHUDFLW\RIVWDWHPHQWV '(3$5785( PDGHLQDQDIILGDYLWWKDWIRUPHGWKHEDVLVIRUDZDUUDQW KDVDKHDY\EXUGHQ+LVDOOHJDWLRQVPXVWEHPRUHWKDQ 7KH VROH LVVXH SUHVHQWHG LQ 7LPRWK\ /DQ[WHUjV DSSHDO FRQFOXVRU\ +H PXVW SRLQW WR VSHFLILF IDOVH VWDWHPHQWV FRQFHUQVWKHSURSHUPHWKRGRIVHQWHQFLQJGHIHQGDQWVZKRDUH WKDWKHFODLPVZHUHPDGHLQWHQWLRQDOO\RUZLWKUHFNOHVV JUDQWHG GRZQZDUG GHSDUWXUHV IURP VWDWXWRU\ PLQLPXP GLVUHJDUG IRU WKH WUXWK +H PXVW DFFRPSDQ\ KLV VHQWHQFHV$OWKRXJK/DQ[WHUjVVHQWHQFLQJUDQJHXQGHUWKH DOOHJDWLRQV ZLWK DQ RIIHU RI SURRI 0RUHRYHU KH DOVR JXLGHOLQHV ZDV IURP ILIW\RQH WR VHYHQW\RQH PRQWKV WKH VKRXOG SURYLGH VXSSRUWLQJ DIILGDYLWV RU H[SODLQ WKHLU GLVWULFW FRXUWjV GUXJ TXDQWLW\ FDOFXODWLRQ DQG /DQ[WHUj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jDUJXPHQWV DUHVLPSO\ZURQJDVDPDWWHURIODZ,QHQGHDYRULQJWRVHFXUH $W VHQWHQFLQJ WKH GLVWULFW FRXUW DGRSWHG WKH UHFRPPHQGDWLRQ LQ WKH D ZLUHWDS ZDUUDQW WKH JRYHUQPHQW QHHG QRW SURYH WKH 36,5 ZKLFK GHWHUPLQHG WKDW /DQ[WHU ZDV UHVSRQVLEOH IRU JUDPV RI LPSRVVLELOLW\ RI RWKHU PHDQV RI REWDLQLQJ LQIRUPDWLRQ SRZGHU FRFDLQH /DQ[WHU KDV QRW DVVHUWHG DQ $SSUHQGLFKDOOHQJH RQ ,QVWHDG WKH QHFHVVLW\ SURYLVLRQV PHUHO\ UHTXLUH WKDW ODZ DSSHDO HQIRUFHPHQW RIILFLDOV mJLYH VHULRXV FRQVLGHUDWLRQ WR WKH QRQZLUHWDSWHFKQLTXHVSULRUWRDSSO\LQJIRUZLUHWDSDXWKRULW\ :KHQ D GHIHQGDQW IDFHV D VWDWXWRU\ PLQLPXP VHQWHQFH WKH GLVWULFW DQG WKDW WKH FRXUW EH LQIRUPHG RI WKH UHDVRQV IRU WKH FRXUWjV DELOLW\ WR GHSDUW GRZQZDUG EHORZ WKDW PLQLPXP LV OLPLWHG WR WZR LQYHVWLJDWRUVjEHOLHIWKDWVXFKQRQZLUHWDSWHFKQLTXHVKDYH SURYLVLRQV 86& H ZKLFK DOORZV IRU GHSDUWXUHV EDVHG XSRQ EHHQRUZLOOOLNHO\EHLQDGHTXDWHl8QLWHG6WDWHVY/DPEHUW WKH JRYHUQPHQWjV PRWLRQ LQGLFDWLQJ WKDW D GHIHQGDQW KDV SURYLGHG VXEVWDQWLDO DVVLVWDQFH LQ WKH LQYHVWLJDWLRQ RI RWKHU VXVSHFWV DQG 86& )GWK&LU7KLVSUHFLVHLQIRUPDWLRQZDV I ZKLFK LV NQRZQ DV WKH mVDIHW\ YDOYHl SURYLVLRQ ,Q 8QLWHG SURYLGHGLQWKHLQVWDQWFDVH6HH8QLWHG6WDWHVY&RRSHU 6WDWHV Y %XUNH )G WK &LU ZH UHFRJQL]HG WKDW DOO )GWK&LUKROGLQJWKDWXQGHUFRYHU RI WKH FRXUWV WKDW KDYH DGGUHVVHG WKH LVVXH KDYH GHWHUPLQHG WKDW WKHVH WZR RSHUDWLRQV LQFOXGLQJ FRQWUROOHG SXUFKDVHV FRQVHQVXDO SURYLVLRQV UHSUHVHQW WKH H[FOXVLYH PHDQV E\ ZKLFK D GLVWULFW FRXUW PD\ 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO WHOHSKRQHPRQLWRULQJDQGSK\VLFDOVXUYHLOODQFHHVWDEOLVKHG HYLGHQFHEHIRUHLWQRWWRGHSDUWGRZQZDUGm$GLVWULFWFRXUW WKDWmQRUPDOLQYHVWLJDWLYHSURFHGXUHVlKDGEHHQH[WHQVLYHO\ MXGJH KDV QR GXW\ µWR VWDWH DIILUPDWLYHO\ WKDW KH NQRZV KH FRQGXFWHG DQG WKDW WKH UHTXHVWHG LQWHUFHSWLRQ RI ZLUH DQG SRVVHVVHV WKH SRZHU WR PDNH D GRZQZDUG GHSDUWXUH EXW RUDOFRPPXQLFDWLRQVZDVQRWmHPSOR\HGDVWKHLQLWLDOVWHSLQ GHFOLQHVWRGRVRjl2ZXVX)GDWFLWLQJ8QLWHG FULPLQDOLQYHVWLJDWLRQl 6WDWHV Y %\UG )G WK &LU $IWHU FRQVLGHULQJ5RVVHOOjVDUJXPHQWVFRQFHUQLQJKLVUHKDELOLWDWLYH )XUWKHUPRUH WKH PHUH IDFW WKDW VRPH LQYHVWLJDWLYH HIIRUWVWKHGLVWULFWFRXUWH[SODLQHG WHFKQLTXHV ZHUH VXFFHVVIXO LQ XQFRYHULQJ HYLGHQFH RI ZURQJGRLQJGRHVQRWPDQGDWHWKDWDFRXUWQHJDWHWKHQHHGIRU 6RZLWKUHVSHFWWRWKHGUXJUHKDE,PHDQLWjVFHUWDLQO\ ZLUHWDS VXUYHLOODQFH :H KDYH SUHYLRXVO\ UHFRJQL]HG WKDW FRPPHQGDEOHWKDWWKHGHIHQGDQWKDVJRQHWRJRQHDQG mZLUHWDSSLQJLVSDUWLFXODUO\DSSURSULDWHZKHQWKHWHOHSKRQHLV VRXJKWWUHDWPHQWLWZLOOFHUWDLQO\KHOSKLPDVWLPHJRHV URXWLQHO\UHOLHGRQWRFRQGXFWWKHFULPLQDOHQWHUSULVHXQGHU RQLIKHPDLQWDLQVWKDW$QG,KRSHKHGRHV%XW,GRQjW LQYHVWLJDWLRQl8QLWHG6WDWHVY/DQGPHVVHU)G WKLQNLWjVH[WUDRUGLQDU\:HKDYHPDQ\SHRSOHZKRRQFH WK&LUTXRWLQJ8QLWHG6WDWHVY6WHLQEHUJ)G WKH\JHWFDXJKWJRLQWRGUXJUHKDE$QG,jPDOZD\VJODG G &LU 7KH HYLGHQFH UHIOHFWV WKDW WR VHH LW EXW , GRQj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s$DW DSSUR[LPDWHO\WKUHH\HDUV Z@HOO,jYHQRWEHHQPDGHDZDUHRIDQ\WKLQJWKDW GHWHUPLQDWLRQ&I8QLWHG6WDWHVY*XHUUD0DUH])G ZRXOGZDUUDQWDGRZQZDUGGHSDUWXUHIRUDVHQWHQFHOHVVWKDQ WK &LU m7KH JRYHUQPHQW FRXOG KDYH WKHJXLGHOLQHVFROOHFWLYHO\RULQGLYLGXDOO\ls$DW UHDVRQDEO\ FRQFOXGHG WKDW DWWHPSWLQJ WR HOLFLW IXUWKHU m>$@Q DSSHOODWH FRXUW VKRXOG EH UHOXFWDQW WR WUHDW DV LQIRUPDWLRQZRXOGKDYHDURXVHGWKHVXVSLFLRQVRIRWKHU DPELJXRXVDUXOLQJZKLFKGRHVQRWDIILUPDWLYHO\VWDWHWKDWWKH SDUWLFLSDQWV WKXV HQGDQJHULQJ ERWK LWV LQIRUPDQW DQG WKH MXGJHNQHZKHFRXOGGHSDUWGRZQZDUGEXWIDLOHGWRGRVR LQYHVWLJDWLRQl :HVKRXOGWKHUHIRUHDVVXPHWKDWDGLVWULFWFRXUWLVH[HUFLVLQJ LWV SURSHU GLVFUHWLRQ ZKHQ LW FRQFOXGHV WKDW D GRZQZDUG GHSDUWXUH LV XQZDUUDQWHGl 0F*DKHH )G DW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO VLJQLILFDQFHZKHQFRQVLGHUHGLQWKHDJJUHJDWHRIPLWLJDWLQJ )RUWKHVHUHDVRQVZHKROGWKDWWKHGLVWULFWFRXUWGLGQRWHUU IDFWRUVWKDWKHDOOHJHVZDUUDQWHGDGRZQZDUGGHSDUWXUHXQGHU LQGHFOLQLQJWRKROGD)UDQNVKHDULQJRUE\GHWHUPLQLQJWKDW WKH 6HQWHQFLQJ *XLGHOLQHV :H UHYLHZ D GLVWULFW FRXUWjV WKH HYLGHQFH ZDV VXIILFLHQW WR VDWLVI\ WKH JRYHUQPHQWjV GHFLVLRQ WR JUDQW D GRZQZDUG GHSDUWXUH IRU DEXVH RI REOLJDWLRQWRVKRZQHFHVVLW\IRUHOHFWURQLFVXUYHLOODQFHXQGHU GLVFUHWLRQ8QLWHG6WDWHVY0F*DKHH)GWK F &LU+RZHYHUWKLV&RXUWKDVmFRQVLVWHQWO\KHOGWKDW WKHGHFLVLRQE\DGLVWULFWFRXUWQRWWRGHSDUWGRZQZDUGVIURP ,,m5($621$%/('28%7ls85 R@WKHUWKDQWKH WUDIILFNLQJDFWLYLW\,G3ULRUWRVHQWHQFLQJ0UV%HQIRUGWKH IDFWRIDSULRUFRQYLFWLRQDQ\IDFWWKDWLQFUHDVHVWKHSHQDOW\ GLVWULFWFRXUWDSSOLHGWKHVDPHWZROHYHOHQKDQFHPHQWWRKHU IRUDFULPHEH\RQGWKHSUHVFULEHGVWDWXWRU\PD[LPXPPXVWEH KXVEDQG1DWKDQ,WZDVFOHDUWKDWKHSRVVHVVHGWKHJXQLQ VXEPLWWHGWRDMXU\DQGSURYHGEH\RQGDUHDVRQDEOHGRXEWl FRQQHFWLRQ ZLWK GUXJ WUDIILFNLQJ EHFDXVH WKH ZHDSRQ ZDV 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO 0UV%HQIRUGFRQWHQGVWKDWWKHWZROHYHOHQKDQFHPHQWIRU 86 DW 7KH &RXUW GLVPLVVHG WKH WKHQ FRPPRQ SRVVHVVLRQ RI D ILUHDUP ZDV LPSURSHU EHFDXVH ZKHQ DUJXPHQWWKDWDQHQKDQFLQJIDFWPD\EHFRQVLGHUHGPHUHO\D DXWKRULWLHV VHDUFKHG KHU KRPH WKH\ IRXQG QR FRFDLQH RU mVHQWHQFLQJIDFWRUlDQGLQVWHDGKHOGWKDWmWKHUHOHYDQWLQTXLU\ FRFDLQHSDUDSKHUQDOLD:KHQDXWKRULWLHVH[HFXWHGDVHDUFK LV QRW RQH RI IRUP EXW RI HIIHFWGRHV WKH UHTXLUHG ILQGLQJ ZDUUDQW RI WKH %HQIRUGVj UHVLGHQFH WKH\ IRXQG D ORDGHG H[SRVH WKH GHIHQGDQW WR D JUHDWHU SXQLVKPHQW WKDQ WKDW PLOOLPHWHU SLVWRO LQ WKH PDVWHU EHGURRP GUHVVHU GUDZHU DXWKRUL]HG E\ WKH MXU\jV JXLOW\ YHUGLFW"l 86 DW HPSKDVLVDGGHG ,QWKHLQVWDQWFDVH'HIHQGDQWVZHUHVHQWHQFHGXQGHUWKH RU RWKHU HQXPHUDWHG VWDWXWHV VKDOO EH VHQWHQFHG ZLWKRXW UHJDUG WR DQ\ VXEVHFWLRQV RI 86& E 7KLV VWDWXWH FUHDWHV D VWDWXWRU\ PLQLPXP VHQWHQFH LI WKH GHIHQGDQW PHHWV ILYH FULWHULD 2QH RI WKRVH FULWHULRQ LV WKDW WKH mGHIHQGDQW GLG QRW XVH YLROHQFH RU SRVVHVV D WKUHHWLHUHG VHQWHQFLQJ V\VWHP EDVHG XSRQ GUXJ TXDQWLWLHV ILUHDUP RU RWKHU GDQJHURXV ZHDSRQ RU LQGXFH DQRWKHU SDUWLFLSDQW WR GR 'HIHQGDQWV IDFH D VHQWHQFH RI ILYH WR IRUW\ \HDUV XQGHU VR LQ FRQQHFWLRQ ZLWK WKH RIIHQVH l 866* & HPSKDVLV 86&E%LIWKH\DUHUHVSRQVLEOHIRUEHWZHHQ DGGHG 7KH GHIHQGDQW EHDUV WKH EXUGHQ RI VKRZLQJ HOLJLELOLW\ IRU WKH DQGJUDPVRImFRFDLQHEDVHl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mGHIHDWV DSSOLFDWLRQ RI WKH VDIHW\ YDOYHl 8QLWHG 6WDWHV NLORJUDPV RU PRUH RI FRFDLQH K\GURFKORULGH +RZHYHU Y 6PLWK )G WK &LU FROOHFWLQJ FDVHV ,QGHHG LQ DQ XQSXEOLVKHG GHFLVLRQ ZH KDYH LQGLFDWHG WKH VDPH 6HH 8QLWHG 6WDWHV Y %XUVH\ 1RV :/ DW WK &LU 0D\ H[SODLQLQJ WKDW mFRQVWUXFWLYH RU DFWXDO SRVVHVVLRQ RI D ILUHDUP E\ D GHIHQGDQW ZLOO SUHYHQW DSSOLFDWLRQ RI WKH VDIHW\ YDOYHl $W $SSUHQGL ,Q WKH GHIHQGDQW KDG EHHQ FRQYLFWHG LQ D 1HZ sHUVH\ FRXUW RI SRVVHVVLRQ RI D ILUHDUP IRU DQ XQODZIXO SXUSRVH DQ RIIHQVH 5RVVHOOj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sHUVH\jV KDWH XVHG LQ FRQQHFWLRQ ZLWK KLV GUXJ RIIHQVH 6LPLODU WR KLV DUJXPHQW ZLWK FULPH ODZ WKLV ILQGLQJ LQFUHDVHG WKH GHIHQGDQWj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mVHQWLPHQWDOl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jV GHFLVLRQ SURYLVLRQ XQGHU & 6DOJDGR )G DW LQ$SSUHQGL 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO ZKHUHQRDPRXQWRIGUXJVLVVSHFLILHGLQWKHLQGLFWPHQWRU WKDWWKHILUHDUPZDVFRQQHFWHGWRWKHFULPH+HFRQWHQGVWKDW GHWHUPLQHGE\WKHMXU\EH\RQGDUHDVRQDEOHGRXEWVXEVHFWLRQ KHKDGJLYHQWKHJXQWRKLVIDWKHUDVDJLIWDQGWKDWXSRQKLV E& SURYLGHV WKH GHIDXOW PD[LPXP SHQDOWLHV RI IDWKHUjV GHDWK WKH JXQ ZDV UHWXUQHG WR 5RVVHOO VR WKDW KH WZHQW\\HDUVRUWKLUW\\HDUVLQWKHFDVHRIDUHSHDWIHORQ\GUXJ FRXOGJLYHLWWRKLVRZQVRQRQFHWKHER\WXUQHG\HDUVROG RIIHQGHU86&E& 5RVVHOODUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJWKDWWKHUH ZDV D QH[XV EHWZHHQ KLV GUXJ RIIHQVH DQG WKH UHYROYHU ,Q8QLWHG6WDWHVY5HEPDQQ)GWK&LU EHFDXVHWKHDIILGDYLWLQVXSSRUWRIWKHZDUUDQWWRVHDUFKKLV DQG 8QLWHG 6WDWHV Y 3DJH )G WK &LU KRPHGLGQRWPHQWLRQDILUHDUPQRFRFDLQHZDVIRXQGLQVLGH ZHGHWHUPLQHGWKDWm>S@XUVXDQWWRWKHSURYLVLRQVRI KLVKRPHDQGQRQHRIKLVFRFRQVSLUDWRUVLQGLFDWHGWKDWKH WKHTXDQWLW\RIGUXJVLVDIDFWXDOGHWHUPLQDWLRQWKDW KDGEUDQGLVKHGDILUHDUP+RZHYHUWKHIDFWVRIWKHLQVWDQW VLJQLILFDQWO\LPSDFWVWKHVHQWHQFHLPSRVHGl3DJH)G FDVH UHIOHFW WKDW WKHUH ZDV D VXIILFLHQW QH[XV EHWZHHQ WKH DW,QDGGLWLRQLQ8QLWHG6WDWHVY5DPLUH])G ILUHDUPDQGWKHGUXJDFWLYLW\7KHORDGHGILUHDUPZKLFKDV WK&LUZHGHWHUPLQHGWKDWWKHJRYHUQPHQW D FRQYLFWHG IHORQ 5RVVHOO VKRXOG QRW KDYH KDG LQ WKH ILUVW PXVWQDPHLQWKHLQGLFWPHQWWKHTXDQWLW\RIGUXJVIRUZKLFK SODFHZDVLQ5RVVHOOjVEHGURRP0DULMXDQDZDVDOVRIRXQG LW VHHNV WR KROG D GHIHQGDQW UHVSRQVLEOH XQGHU 86& LQWKHEHGURRPFORVHW5RVVHOODGPLWWHGWKDWKHZRXOGWUDGH D LI LW VHHNV DQ HQKDQFHG VHQWHQFH EDVHG RQ GUXJ PDULMXDQD WR KLV FRFDLQH VXSSOLHUV LQ RUGHU WR REWDLQ D TXDQWLW\:HIXUWKHUH[SODLQHGLQ8QLWHG6WDWHVY6WUD\KRUQ GLVFRXQWHGSULFH)XUWKHURIILFHUVIRXQGSODVWLFEDJJLHVDQG )GWK&LUWKDWmHDFKSHQDOW\SURYLVLRQRI VFDOHVLWHPVRIWHQXVHGLQWKHLOOHJDOGUXJWUDGHLQ5RVVHOOjV EFRQVWLWXWHVDGLIIHUHQWFULPHZLWKGLIIHUHQWHOHPHQWV JDUDJH 5RVVHOO DQG KLV ZLIH DOVR DGPLWWHG DQG ZLUHWDS LQFOXGLQJ GUXJ ZHLJKW ZKLFK PXVW EH SURYHG EH\RQG D UHFRUGLQJVFRQILUPWKDWGUXJWUDQVDFWLRQVZHUHDUUDQJHGIURP UHDVRQDEOHGRXEWZKHQVHQWHQFLQJDGHIHQGDQWLQH[FHVVRI WKHUHVLGHQFH0RUHRYHU5RVVHOODGPLWWHGWKDWKHKDGVWRUHG WKHGHIDXOWVWDWXWRU\PD[LPXPVHWRXWLQE&IRU WHQRXQFHVRISRZGHUFRFDLQHRXWVLGHRIKLVUHVLGHQFHLQD DOOGUXJVH[FHSWPDULMXDQDl,GDW SLFQLFWDEOH7KHGLVWULFWFRXUWUHMHFWHG5RVVHOOjVDUJXPHQW WKDWKHNHSWWKHZHDSRQIRUVHQWLPHQWDOUHDVRQV7KHFRXUW ,QWKHLQVWDQWFDVHWKHLQGLFWPHQWGLGQRWVSHFLI\WKHGUXJ QRWHGWKDWWKHJXQZDVORDGHGNHSWXQGHU5RVVHOOj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jV PD[LPXP LW ZDV PDGH LQ VDIHW\ YDOYH SURYLVLRQ RI 866* & 8QGHU WKDW SURYLVLRQ RI WKH YLRODWLRQ RI $SSUHQGL 6HQWHQFLQJ *XLGHOLQHV D GHIHQGDQW FRQYLFWHG XQGHU 86& 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO $ GHWHUPLQHWKHGUXJDPRXQWVUDWKHUWKHMXU\PHUHO\IRXQGWKDW 'HIHQGDQWV KDG FRQVSLUHG WR GLVWULEXWH DQG SRVVHVV VRPH m$ GLVWULFW FRXUWjV ILQGLQJ WKDW D GHIHQGDQW SRVVHVVHG D XQGHWHUPLQHGDPRXQWRIFUDFNFRFDLQH6LPLODUO\WKHSOHD ILUHDUPGXULQJDGUXJFULPHLVDIDFWXDOILQGLQJVXEMHFWWRWKH DJUHHPHQWV HQWHUHG E\ 7UDPEOH DQG 5RVVHOO DOVR IDLOHG WR FOHDUO\HUURQHRXVVWDQGDUGRIUHYLHZl8QLWHG6WDWHVY(OGHU VSHFLI\GUXJTXDQWLWLHV+RZHYHUWKHGLVWULFWFRXUWIRXQGE\ )GWK&LUFLWDWLRQVRPLWWHG7KH D SUHSRQGHUDQFH RI WKH HYLGHQFH WKH TXDQWLW\ RI GUXJV IRU 6HQWHQFLQJ*XLGHOLQHVSURYLGHWKDWWKHEDVHRIIHQVHOHYHORI ZKLFKHDFK'HIHQGDQWZDVDFFRXQWDEOH7KHFRXUWWKHQXVHG DGHIHQGDQWFRQYLFWHGRIDGUXJRIIHQVHVKRXOGEHLQFUHDVHG WKHVHGUXJTXDQWLWLHVWRVHQWHQFHWKH'HIHQGDQWVWRYDULRXV E\WZROHYHOVm>L@IDGDQJHURXVZHDSRQLQFOXGLQJDILUHDUP WHUPV RI LPSULVRQPHQW DQG VXSHUYLVHG UHOHDVH XQGHU WKH ZDVSRVVHVVHGl8QLWHG6WDWHVY2ZXVX)G VXEVHFWLRQVRI86&E%HORZZHZLOOGLVFXVV WK&LUFLWLQJ866*'E7RDSSO\WKH ZKHWKHUDQ\FODLPHG$SSUHQGLHUURUZDUUDQWVYDFDWLQJDQ\RI HQKDQFHPHQW WKH JRYHUQPHQW PXVW HVWDEOLVK WKDW WKH WKH'HIHQGDQWVjVHQWHQFHV GHIHQGDQWDFWXDOO\RUFRQVWUXFWLYHO\mSRVVHVVHGlWKHZHDSRQ DQGWKDWVXFKSRVVHVVLRQZDVGXULQJWKHFRPPLVVLRQRI % WKHRIIHQVH8QLWHG6WDWHVY+LOO)GWK &LU FHUW GHQLHG 86 m2QFH LW LV 7KHSDUWLHVGLVSXWHWKHDSSURSULDWHPHWKRGRISUHVHUYLQJDQ HVWDEOLVKHGWKDWDGHIHQGDQWZDVLQSRVVHVVLRQRIDZHDSRQ $SSUHQGLFKDOOHQJHDQGWKHUHIRUHWKHDSSOLFDEOHVWDQGDUGRI GXULQJWKHFRPPLVVLRQRIDQRIIHQVHDSUHVXPSWLRQDULVHV UHYLHZ7KHJRYHUQPHQWFKDUDFWHUL]HV'HIHQGDQWVj$SSUHQGL WKDWVXFKSRVVHVVLRQZDVFRQQHFWHGWRWKHRIIHQVHl,G7KH FODLPVDVDOOHJLQJDQRPLVVLRQIURPDMXU\LQVWUXFWLRQDQG EXUGHQ WKHQ VKLIWV WR WKH GHIHQGDQW WR VKRZ WKDW mLW ZDV FRQWHQGVWKDWWKHLUFODLPVVKRXOGEHUHYLHZHGRQO\IRUSODLQ FOHDUO\ LPSUREDEOH WKDW WKH ZHDSRQ ZDV FRQQHFWHG WR WKH HUURUEHFDXVHWKH\GLGQRWREMHFWWRWKHGUXJDPRXQWVXQWLO RIIHQVHl ,G FLWLQJ 866* ' FRPPHQW Q DIWHUWKHMXU\UHWXUQHGLWVYHUGLFW,QVXSSRUWRIWKLVDUJXPHQW m&RQVWUXFWLYH SRVVHVVLRQ RI DQ LWHP LV WKH µRZQHUVKLS RU WKHJRYHUQPHQWFLWHV)(' 5 &5,03ZKLFKSURYLGHVWKDW GRPLQLRQRUFRQWUROjRYHUWKHLWHPLWVHOIµRUGRPLQLRQRYHU DSDUW\PD\QRWmDVVLJQDVHUURUDQ\SRUWLRQRIWKHFKDUJHRU WKH SUHPLVHVj ZKHUH WKH LWHP LV ORFDWHGl ,G FLWDWLRQ RPLVVLRQWKHUHIURPXQOHVVWKDWSDUW\REMHFWVWKHUHWREHIRUHWKH RPLWWHGm,IWKHRIIHQVHFRPPLWWHGLVSDUWRIDFRQVSLUDF\ MXU\UHWLUHVWRFRQVLGHULWVYHUGLFWl+RZHYHUWKLVUXOHLV KRZHYHU WKH JRYHUQPHQW GRHV QRW KDYH WR SURYH WKDW WKH LQDSSOLFDEOHLQWKHLQVWDQWFDVHEHFDXVHDQ$SSUHQGLYLRODWLRQ GHIHQGDQW DFWXDOO\ SRVVHVVHG WKH ZHDSRQ EXW LQVWHDG PD\ FDQRFFXURXWVLGHRIWKHFRQWH[WRIDQRPLVVLRQRIDQHOHPHQW HVWDEOLVK WKDW D PHPEHU RI WKH FRQVSLUDF\ SRVVHVVHG WKH RIDFULPHIURPWKHMXU\FKDUJH)RULQVWDQFHZHKDYHKHOG ILUHDUP DQG WKDW WKH PHPEHUjV SRVVHVVLRQ ZDV UHDVRQDEO\ WKDWDQ$SSUHQGLLVVXHPLJKWDULVHZKHQDGHIHQGDQWSOHDGV IRUHVHHDEOHE\RWKHU PHPEHUVLQWKHFRQVSLUDF\l2ZXVX JXLOW\WRDGUXJRIIHQVHMXVWDVLWPLJKWZKHQKHFKRRVHVWR )GDWFLWDWLRQRPLWWHG WDNH KLV FDVH WR WULDO 6WUD\KRUQ )G DW FLWLQJ 8QLWHG 6WDWHV Y +DUSHU )G WK &LU $XWKRULWLHV IRXQG D FDOLEHU UHYROYHU ORDGHG ZLWK VL[ :H H[SODLQHG RXU EDVLV IRU DSSO\LQJ $SSUHQGL WR KROORZSRLQWURXQGVVWXIIHGEHWZHHQ5RVVHOOjVPDWWUHVVDQG JXLOW\SOHDVDVIROORZV ER[VSULQJ5RVVHOOGRHVQRWFRQWHQGWKDWKHGLGQRWSRVVHVV WKHILUHDUPEXWUDWKHUWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJ 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO 2XUUDWLRQDOHLVVLPSOHWKHGHIHQGDQWZKRSOHDGVJXLOW\ PLJKW KDYH SRVHG GLIIHUHQW TXHVWLRQV RU DWWDFNHG ZLWQHVV WRDQXQVSHFLILHGDPRXQWRIGUXJVDQGLVWKHQVHQWHQFHG WHVWLPRQ\UHJDUGLQJKHULQYROYHPHQWLQGUXJWUDIILFNLQJLQ XQGHUWKHSUHSRQGHUDQFHRIWKHHYLGHQFHVWDQGDUGPD\ ZD\VWKDWPLJKWKDYHUDLVHGVXIILFLHQWGRXEWLQMXURUjVPLQGV MXVW DV HDVLO\ EH VXEMHFWHG WR DQ HQKDQFHG VHQWHQFH LQ UHJDUGLQJWKHH[DFWTXDQWLWLHVRIGUXJVWKDW0UV%HQIRUGZDV H[FHVVRIWKHGHIDXOWVWDWXWRU\PD[LPXPDVWKHGHIHQGDQW FKDUJHGZLWKFRRNLQJRUWUDQVSRUWLQJHWF6HHsRUGDQ ZKRWDNHVKLVFDVHWRWULDODQGLVWKHQVHQWHQFHG )GDW'HWHUPLQLQJZKHWKHUWKHMXU\ZRXOGKDYH E \ W K H G L V W U L F W F R X UW X Q G HU W K H V DP H UHDFKHGWKHVDPHUHVXOWVDVWKHGLVWULFWFRXUWRQWKLVUHFRUG SUHSRQGHUDQFHRIWKHHYLGHQFHVWDQGDUG7KLVKROGLQJ ZRXOGEHVSHFXODWLYHDWEHVW%HFDXVH,FDQQRWILQGWKDWWKH IROORZVLQH[RUDEO\IURP>8QLWHG6WDWHVY)ORZDO $SSUHQGLHUURULQ0UV%HQIRUGjVFDVHZDVKDUPOHVVEH\RQG )GWK&LU@5DPLUH]DQG+DUSHUDQGLWV DUHDVRQDEOHGRXEW,ZRXOGYDFDWH0UV%HQIRUGjVVHQWHQFH RXWFRPHLVGLFWDWHGE\$SSUHQGL DQG UHPDQG KHU FDVH WR WKH GLVWULFW FRXUW IRU UHVHQWHQFLQJ XQGHU86&E& 6WUD\KRUQ)GDW7KHUHIRUHWKHMXU\LQVWUXFWLRQ DQDORJ\PXVWIDLO 93266(66,212)),5($506$1' '2:1:$5''(3$5785()25(;&(37,21$/ :H DOVR HPSKDVL]H WKDW WKH FRQVWLWXWLRQDO HUURU OLNHZLVH &,5&8067$1&(6 GRHVQRWOLHLQWKHLQGLFWPHQWLWVHOI7KHJRYHUQPHQWjVIDLOXUH WRDOOHJHDGUXJTXDQWLW\GRHVQRWUHQGHUDGUXJGLVWULEXWLRQ 5RVVHOO0UV%HQIRUGDQG6WHZDUWFRQWHQGWKDWWKHGLVWULFW LQGLFWPHQW FRQVWLWXWLRQDOO\ LQILUP 6HH +DPOLQJ Y 8QLWHG FRXUW HUUHG LQ HQKDQFLQJ WKHLU VHQWHQFHV E\ WZR SRLQWV 6WDWHV86m>$QLQGLFWPHQWLVVXIILFLHQW SXUVXDQWWR866*'IRUSRVVHVVLRQRIDILUHDUPGXULQJ LILWILUVWFRQWDLQVWKHHOHPHQWVRIWKHRIIHQVHFKDUJHGDQG WKHFRPPLVVLRQRIWKHLUFULPHV5RVVHOODOVRDUJXHVWKDWWKH IDLUO\ LQIRUPV D GHIHQGDQW RI WKH FKDUJH DJDLQVW ZKLFK KH GLVWULFWFRXUWHUUHGLQGHWHUPLQLQJWKDWKHZDVQRWHOLJLEOHIRU PXVWGHIHQGDQGVHFRQGHQDEOHVKLPWRSOHDGDQDFTXLWWDORU WKHVDIHW\YDOYHSURYLVLRQRI866*&DQGLQIDLOLQJ FRQYLFWLRQ LQ EDU RI IXWXUH SURVHFXWLRQV IRU WKH VDPH WR GHSDUW GRZQZDUG GXH WR WKH H[FHSWLRQDO FLUFXPVWDQFHV RIIHQVHl,QVWHDGZKHQVSHFLILFTXDQWLWLHVDUHQRWDOOHJHG VXUURXQGLQJKLVFDVH)RUWKHUHDVRQVH[SODLQHGEHORZZH D GHIHQGDQW VKRXOG EH VHQWHQFHG XQGHU 86& UHMHFWHDFKRIWKHVHDUJXPHQWV E& ZKLFK HVWDEOLVKHV WKH GHIDXOW VWDWXWRU\ PD[LPXPVHQWHQFHVDQGGRHVQRWUHTXLUHDVDQHOHPHQWRIWKH RIIHQVHDVSHFLILFTXDQWLW\RIGUXJV6HH3DJH)GDW KROGLQJWKDWEHFDXVHLQGLFWPHQWIDLOHGWRPHQWLRQGUXJ $OWKRXJK WKH HYLGHQFH DW WKH %HQIRUGVj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jV SHQDO LQWHUHVWV WKH RQO\ ORJLFDO LPSOLFDWHG LQ 0UV %HQIRUGjV FDVH DQG , GR QRW ILQG WKH HUURU WR EH RXWFRPHRIVXFKDFKDOOHQJHZRXOGEHIRUWKHJRYHUQPHQWWR KDUPOHVV EH\RQG D UHDVRQDEOH GRXEW EDVHG RQ WKH UHFRUG 7KHUHIRUH , ZRXOG ILQG WKDW VKH LV HQWLWOHG WR EH UHVHQWHQFHG 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO WHVWLPRQ\UHJDUGLQJ0UV%HQIRUGjVDFWXDOLQYROYHPHQWZLWK UHSODFHWKHFKDUJHXQGHU86&ZLWKDPRUHVSHFLILF GUXJVZDVPLQLPDOFRPSDUHGWRKHUKXVEDQG$VKHUFRXQVHO FKDUJH VSHFLILFDOO\ DOOHJLQJ D GUXJ TXDQWLW\ ZKLFK PLJKW QRWHGDWVHQWHQFLQJKHZRXOGJRDGD\RUWZRDWWULDOZLWKRXW H[SRVH WKH GHIHQGDQW WR D KLJKHU VWDWXWRU\ SHQDOW\ UDQJH FURVVH[DPLQLQJ ZLWQHVVHV EHFDXVH 0UV %HQIRUG ZDV QRW ,QVWHDGRIREMHFWLQJWRDYDOLGLQGLFWPHQWRUMXU\LQVWUXFWLRQ PHQWLRQHG s$ DW 7KH GLVWULFW FRXUW EDVHG 0UV WKH SURSHU WLPH IRU D GHIHQGDQW WR UDLVH D FKDOOHQJH WR KLV %HQIRUGjVVHQWHQFHODUJHO\RQWHVWLPRQ\WKDWVKHRIIHUHGWR VHQWHQFHLVDWWKHWLPHWKHDFWXDOYLRODWLRQRFFXUVDWWKHWLPH DVVLVW FRXQWLQJ PRQH\ HDUQHG IURP VHOOLQJ D NLORJUDP RI RIVHQWHQFLQJ6HH8QLWHG6WDWHVYsDFNVRQ)G FRFDLQHSODFHGPRQH\LQDVDIHORFDWHGLQ8SWRZQ6XSSHU WK&LUm7KHHUURULVEHVWFKDUDFWHUL]HGDV &OXEWKDWDFFRUGLQJWR+LOWKHDQG0U%HQIRUGSODQQHGWR VHQWHQFLQJ LQ H[FHVV RI WKH VWDWXWRU\ PD[LPXP SHQDOW\ ODWHUXVHWREX\DNLORJUDPRIFRFDLQHSRZGHUDQGKHOSHG DSSOLFDEOHWRWKHRIIHQVHRIFRQYLFWLRQl WUDQVSRUWJUDPVRIFUDFNRQRQHRFFDVLRQ%LOOLQJVOH\ DOVRWHVWLILHGWKDWKHZLWQHVVHG0UV%HQIRUGFRRNFRFDLQH 7KHJRYHUQPHQWDOVRFODLPVWKDWDOORIWKH'HIHQGDQWVKDYH LQWRFUDFNRQRQHRFFDVLRQ,FDQQRWRQWKLVUHFRUGZLWKVR IDLOHG WR SUHVHUYH WKHLU $SSUHQGL FKDOOHQJHV E\ QRW UDLVLQJ IHZUHIHUHQFHVWR0UV%HQIRUGjVDFWXDOLQYROYHPHQWZLWKWKH WKHPEHIRUHWKHGLVWULFWFRXUWDWWKHWLPHRIVHQWHQFLQJ:KLOH GUXJ DPRXQWV LQ WKLV YDVW FRQVSLUDF\ GHWHUPLQH EH\RQG D ZH GLVDJUHH ZLWK WKH JRYHUQPHQW DV WR WKH %HQIRUGVj UHDVRQDEOHGRXEWWKDWWKHJUDQGMXU\ZRXOGKDYHLQGLFWHGKHU $SSUHQGLFKDOOHQJHZHDJUHHWKDWWKHUHPDLQLQJ'HIHQGDQWV IRUFRQVSLUDF\WRSRVVHVVJUDPVRUPRUHRIFUDFNRUILYH IDLOHGWRSUHVHUYHWKHLUFODLPHGHUURUIRUDSSHDODQGZHZLOO NLORJUDPV RI FRFDLQH 6HH s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mHYLGHQWLDU\ REMHFWLRQl RI FKDOOHQJLQJ GUXJ RQWKHSUHVHQWUHFRUGWKDWWKHIDLOXUHWRDOOHJHGUXJTXDQWLW\LQ TXDQWLWLHVLQDSUHVHQWHQFHLQYHVWLJDWLRQUHSRUWDQGDIRUPDO WKH LQGLFWPHQW RU WR KDYH WKH MXU\ GHWHUPLQH GUXJ TXDQWLW\ FRQVWLWXWLRQDO REMHFWLRQ WKDW WKH GUXJ TXDQWLW\ PXVW EH EH\RQGDUHDVRQDEOHGRXEWZDVKDUPOHVVEH\RQGDUHDVRQDEOH GHWHUPLQHG EH\RQG D UHDVRQDEOH GRXEW XQGHU $SSUHQGL RU GRXEW,G&RQWUDU\WRWKHJRYHUQPHQWjVDUJXPHQWVLWLVQRW sRQHV +RZHYHU WKLV &RXUW KDV KHOG WKDW D GHIHQGDQWjV HQRXJKWKDWWKHUHPLJKWEHVRPHHYLGHQFHLQWKHUHFRUGWKDW mUHSHDWHGlREMHFWLRQWRWKHPHWKRGRIGUXJFDOFXODWLRQEHORZ PLJKWSHUPLWDIILUPLQJWKHVHQWHQFHWKHGLVWULFWFRXUWLPSRVHG VXIILFHV WR SUHVHUYH$SSUHQGL HUURU RQ DSSHDO 6HH 8QLWHG LQ0UV%HQIRUGjVFDVH5DWKHULQGHWHUPLQLQJZKHWKHU0UV 6WDWHVY6WUD\KRUQ)GWK&LU %HQIRUGjVVXEVWDQWLDOULJKWVZHUHDIIHFWHGWKHHYLGHQFHPXVW EHRYHUZKHOPLQJDQGHVVHQWLDOO\XQFRQWURYHUWHG6HH1HGHU 6SHFLILFDOO\LQ6WUD\KRUQZHFRQVLGHUHGWKHDSSURSULDWH 86 DW &DQGHODULR )G DW HPSKDVLV VWDQGDUGRIUHYLHZIRUWKHFDVHRIDGHIHQGDQWZKREURXJKWD DGGHG)XUWKHUWKH&RXUWPXVWEHFRQYLQFHGWKDWWKHUHFRUG VHHPLQJO\EHODWHGFRQVWLWXWLRQDOFKDOOHQJHWRKLVVHQWHQFHRQ HYLGHQFHFRXOGQRWOHDGWRDFRQWUDU\ILQGLQJZLWKUHVSHFWWR GLUHFWDSSHDO$SSUHQGLZDVGHFLGHGDIWHUWKH'HIHQGDQWj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jV DSDUWPHQW $IWHU UHYLHZLQJ WKH SUHVHQWHQFH FRQVWLWXWLRQDO UXOHV UHWURDFWLYHO\ WR FDVHV VWLOO RQ GLUHFW UHSRUW ZKLFK UHFRXQWHG WKH DERYHFLWHG HYHQWV UHJDUGLQJ UHYLHZ:HIXUWKHUIRXQGWKDWEHFDXVHWKHGHIHQGDQWKDG %HQIRUGjVFRFDLQHGHDOLQJVDQGQXPHURXVRWKHUVWKHGLVWULFW VWHDGIDVWO\ FKDOOHQJHG WKH GLVWULFW FRXUWjV GUXJ TXDQWLW\ FRXUWIRXQGWKDWPRUHWKDQJUDPVRIFUDFNDQG GHWHUPLQDWLRQ DQG WKH DPRXQWV DWWULEXWHG WR KLP LQ WKH JUDPVRIFRFDLQHK\GURFKORULGHZHUHSURSHUO\DWWULEXWDEOHWR SUHVHQWHQFH LQYHVWLJDWLRQ UHSRUW m36,5l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jV VHQWHQFLQJKHDULQJDVZHOODVLQDZULWWHQREMHFWLRQWR DUJXPHQWLVWKDWTXDQWLW\PXVWEHFKDUJHGVRWKDWmLWFDQEH WKH FDOFXODWLRQ RI KLV EDVH RIIHQVH OHYHO LQ KLV VXEPLWWHGWRWKHMXU\DQGSURYHQEH\RQGDUHDVRQDEOHGRXEWl SUHVHQWHQFHUHSRUW$OWKRXJKKHGLGQRWXWWHUWKHZRUGV 7KHUHIRUHZHEHOLHYHWKDWWKH$SSUHQGLHUURULQ%HQIRUGjV µGXHSURFHVVjDWHLWKHURIWKHVHKHDULQJVKHPDGHLWZHOO FDVHZDVKDUPOHVVEH\RQGDUHDVRQDEOHGRXEW1HGHU NQRZQWKDWKHGLVSXWHGWKHGLVWULFWFRXUWjVIDFWXDOILQGLQJ 86DW ZLWKUHVSHFWWRGUXJTXDQWLW\ +RZHYHUXQOLNHWKHSDQHOPDMRULW\RQWKLVLVVXH,EHOLHYH 6WUD\KRUQ)GDWHPSKDVLVDGGHG%DVHGXSRQ 0UV %HQIRUGjV FDVH SUHVHQWV D GLIIHUHQW PDWWHU 0UV WKLV UHDVRQLQJ ZH UHYLHZHG WKH GHIHQGDQWjV FRQVWLWXWLRQDO %HQIRUGjVJXLGHOLQHUDQJHXQGHUWKH6HQWHQFLQJ*XLGHOLQHV FKDOOHQJHGHQRYR,GFLWLQJ8QLWHG6WDWHVY/OR\G)G ZDVWRPRQWKV7KHGLVWULFWFRXUWFRQFOXGHGWKDW WK &LU KROGLQJ WKDW FRQVWLWXWLRQDO mEHLQJ K\SHUVXSHUFRQVHUYDWLYHl WKH TXDQWLW\ RI GUXJV FKDOOHQJHWRVHQWHQFHVSUHVHQWVDTXHVWLRQRIODZUHTXLULQJGH DWWULEXWDEOHWR0UV%HQIRUGIHOOZLWKLQWKHVWDWXWRU\UDQJHRI QRYRUHYLHZ 86&E%DOWKRXJKKHUMXGJPHQWLQGLFDWHV WKDWVKHZDVDFWXDOO\VHQWHQFHGXQGHUWKHKLJKHUSURYLVLRQVRI 7KLV &RXUWjV PRVW UHFHQW H[SOLFDWLRQ RI SUHVHUYLQJ E$ s$ DW 7KH JRYHUQPHQW DOVR $SSUHQGLFKDOOHQJHVLVIRXQGLQ8QLWHG6WDWHVY+XPSKUH\ DUJXHV RQ DSSHDO WKDW WKH HYLGHQFH ZDV VXIILFLHQW WR VKRZ )G,QWKDWFDVHPXFKOLNH6WUD\KRUQWKH 0UV%HQIRUGjVLQYROYHPHQWZLWKTXDQWLWLHVRIFUDFNFRFDLQH GHIHQGDQW GLG QRW UHO\ RQ $SSUHQGL LQ FKDOOHQJLQJ KLV DQG FRFDLQH K\GURFKORULGH WR VXSSRUW D VHQWHQFH XQGHU VHQWHQFHEHIRUHWKHGLVWULFWFRXUWDQGLQGHHGFRXOGQRWKDYH E%+RZHYHUDUHYLHZRIWKHUHFRUGVKRZVWKDW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO ZRXOGKDYHGRQH8QGHUWKLVFLUFXLWjVMXULVSUXGHQFHWKHUH EHFDXVH$SSUHQGLZDVGHFLGHGDIWHUKHZDVVHQWHQFHG,GDW PD\EHLQVWDQFHVZKHUHDFRXUWPLJKWILQGWKDWDGHIHQGDQWjV +RZHYHU WKLV &RXUW KHOG WKDW KH KDG SUHVHUYHG KLV VXEVWDQWLDO ULJKWV ZHUH QRW DIIHFWHG DOWKRXJK GUXJ TXDQWLW\ $SSUHQGL FKDOOHQJH VXFK WKDW GH QRYR UHYLHZ ZDV ZDVQHLWKHUDOOHJHGQRUSURYHGEH\RQGDUHDVRQDEOHGRXEW DSSURSULDWH LQDVPXFK DV KH mREMHFWHG DW WKH VHQWHQFLQJ 6HH.LQJ)GDWVHHDOVR6DQFKH])GDW KHDULQJWRERWKWKHDPRXQWRIGUXJVDWWULEXWHGWRKLPDQGWKH KROGLQJWKDWKDUPOHVVHUURUUHYLHZLVDSSURSULDWHZKHUH VWDQGDUGRISURRIUHTXLUHGWRVXSSRUWWKDWDPRXQWl,G:H GUXJTXDQWLW\LVQHLWKHUDOOHJHGLQWKHLQGLFWPHQWQRUSURYHQ QRWHG LQ +XPSKUH\ WKDW ZKLOH WKH GHIHQGDQWjV FRXQVHO EH\RQG D UHDVRQDEOH GRXEW )XUWKHU LW DSSHDUV WKDW LQ FRQFHGHG DW VHQWHQFLQJ WKDW WKH WKHQ FXUUHQW VWDQGDUG RI sRUGDQWKHRQO\HYLGHQFHUHJDUGLQJGUXJTXDQWLW\ZDV UHYLHZ ZLWK UHVSHFW WR GUXJ TXDQWLW\ GHWHUPLQDWLRQV ZDV JUDPVRIPHWKDPSKHWDPLQHWKDWDXWKRULWLHVIRXQGRQSURSHUW\ SUHSRQGHUDQFH RI WKH HYLGHQFH FRXQVHO QHYHUWKHOHVV OHDVHGWRWKHGHIHQGDQW,GDW mFKDOOHQJHGWKHSURSULHW\RIWKDWVWDQGDUGl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sRH 0LWFKHOO WHVWLILHG WKDW KH UHWULHYHG DW SXUSRVHVRIWKLVDSSHDOWKLVSDQHOLVRIFRXUVHERXQGE\RXU %HQIRUGjVGLUHFWLRQ0\URQ+LOWWHVWLILHGWKDWKHKDGRQFH KROGLQJV LQ FDVHV VXFK DV +XPSKUH\ DQG 6WUD\KRUQ 6HH GHOLYHUHG D NLORJUDP RI FRFDLQH WR 7UDPEOH DW %HQIRUGjV 8QLWHG 6WDWHV Y sHQNLQV )G Q WK &LU GLUHFWLRQ 2Q DQRWKHU RFFDVLRQ %HQIRUG DQG +LOW ZHUH H[SODLQLQJ WKDW RQH SDQHO RI WKH &RXUW LV ERXQG E\ FRXQWLQJ PRQH\ DIWHU VHOOLQJ D NLORJUDP RI FRFDLQH ZKHQ DQRWKHUSDQHOjVKROGLQJVEXWQRWLWVGLFWD%RWK1DWKDQDQG 5HQD%HQIRUGDVNHGWKHPLIWKH\QHHGHGKHOS$OWKRXJKWKH\ 5HQD %HQIRUG UDLVHG FRQVWLWXWLRQDO REMHFWLRQV WR WKHLU WROGKHUWKH\GLGQRWWKH\GLUHFWHGWKDWVKHSXWWKHPRQH\LQ UHVSHFWLYHVHQWHQFHVEDVHGXSRQWKH6XSUHPH&RXUWjVKROGLQJ DVDIHORFDWHGLQWKH8SWRZQ6XSSHU&OXE+LOWDOVRWHVWLILHG LQsRQHVZKLFKZDVGHFLGHGVXEVHTXHQWWRWULDOEXWSULRUWR WKDW KH DQG %HQIRUG KDG RQFH SXUFKDVHG D NLORJUDP RI WKHLU VHQWHQFLQJ DQG FOHDUO\ SUHVHUYHG WKHLU $SSUHQGL FRFDLQHDQGWKDW5HQD%HQIRUGGHOLYHUHGVRPHRIWKHPRQH\ FKDOOHQJHIRURXUUHYLHZ+XPSKUH\)GDW:KLOH WRKHUKXVEDQGLQRUGHUWKDWKHPLJKWPDNHWKHSXUFKDVH&R EHIRUH WKH GLVWULFW FRXUW WKH %HQIRUGV FRQWHQGHG WKDW WKH GHIHQGDQW&OHYHODQG%LOOLQJVOH\WHVWLILHGWKDWXSRQKLVUHOHDVH sRQHVGHFLVLRQUHTXLUHGWKDWWKHGUXJDPRXQWVEHFKDUJHGLQ IURPSULVRQLQKHUHFHLYHGVHYHUDORXQFHVRIFUDFNDQG WKHLU LQGLFWPHQWV RU EH RWKHUZLVH SUHVHQWHG WR D MXU\ WR EH SRZGHUFRFDLQHGLUHFWO\IURP%HQIRUG+HDOVRWHVWLILHGWKDW GHFLGHG EH\RQG D UHDVRQDEOH GRXEW 7KH GLVWULFW FRXUW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO RYHUUXOHG WKHVH REMHFWLRQV DQG LQVWHDG GHWHUPLQHG WKH ( UHOHYDQWGUXJTXDQWLWLHVE\DSUHSRQGHUDQFHRIWKHHYLGHQFH 7KH%HQIRUGVQRZVHHNUHYHUVDOXQGHU$SSUHQGLDQGsRQHV 7KH 1LQWK &LUFXLW UHFHQWO\ KDV QRWHG WKDW WKHUH LV OLWWOH mMXGLFLDOH[SHULHQFHlRQKRZWRDQDO\]HWKHKDUPOHVVQHVVRI 5RVVHOO SOHDGHG JXLOW\ WR WKH GUXJ FRQVSLUDF\ FKDUJH $SSUHQGL HUURU sRUGDQ )G DW 7KDW FRXUW $OWKRXJK KH VXEPLWWHG ZULWWHQ FKDOOHQJHV WR WKH 36,5jV UHFRJQL]HGWKDWWRGHWHUPLQHZKHWKHUHUURULVKDUPOHVVEH\RQG FDOFXODWLRQRIFHUWDLQDPRXQWVRIGUXJTXDQWLWLHVDWWULEXWHGWR DUHDVRQDEOHGRXEWZKHUHGUXJTXDQWLW\LVQHLWKHUDOOHJHGLQ KLPKHDWQRWLPHmFKDOOHQJHGWKHSURSULHW\lRIWKHGLVWULFW WKH LQGLFWPHQW QRU SURYHQ EH\RQG D UHDVRQDEOH GRXEW LV D FRXUWjVXVLQJWKHSUHSRQGHUDQFHRIWKHHYLGHQFHVWDQGDUGRI IRUPLGDEOH WDVN ,G DW GLVWLQJXLVKLQJ SULRU FDVH UHYLHZWRGHWHUPLQHGUXJTXDQWLW\+XPSKUH\)GDW ZKHUHFRXUWIRXQGWKDWGHIHQGDQWjVVXEVWDQWLDOULJKWVZHUHQRW /LNHZLVH 7UDPEOH DQG 6WHZDUW VXEPLWWHG ZULWWHQ DIIHFWHG ZKHUH GUXJ TXDQWLW\ DOWKRXJK DOOHJHG LQ WKH REMHFWLRQV WR WKHLU 36,5V FKDOOHQJLQJ FHUWDLQ VSHFLILF LQGLFWPHQW ZDV QRW IRXQG E\ MXU\ EH\RQG D UHDVRQDEOH TXDQWLWLHV RI GUXJV DWWULEXWHG WR WKHP ZKLOH IDLOLQJ WR GRXEW 7KH FRXUW H[SODLQHG LQ sRUGDQ WKDW EHFDXVH WKH FKDOOHQJH RWKHU VXFK TXDQWLWLHV :KLOH 6WUD\KRUQ PLJKW LQGLFWPHQWGLGQRWDOOHJHTXDQWLW\WKHFRXUWZRXOGILUVWKDYH WR GHWHUPLQH WKDW WKH JUDQG MXU\ ZRXOG KDYH LQGLFWHG WKH GHIHQGDQW IRU SRVVHVVLQJ PRUH WKDQ JUDPV RI )RU LQVWDQFH DFFRUGLQJ WR 5RVVHOOjV 36,5 FRGHIHQGDQW /RSH] PHWKDPSKHWDPLQH,GDW)XUWKHUDVWKHGHIHQGDQWKDG sDFNVRQ LQGLFDWHG WKDW KH KDG VROG 5RVVHOO DERXW DQ RXQFH RI SRZGHU QRQRWLFHRIWKHTXDQWLW\LVVXHDWWULDOWKHFRXUWZRXOGKDYHWR FRFDLQH HYHU\ RWKHU ZHHN IURP sXO\ WR sXO\ 5RVVHOO GHWHUPLQH ZKHWKHU WKH GHIHQGDQW ZRXOG KDYH FRQWHVWHG FRUURERUDWHG WKHVH DPRXQWV s$ DW 7DSHG SKRQH FRQYHUVDWLRQV TXDQWLW\,G7KHFRXUWZRXOGDOVRKDYHWRGHWHUPLQHEH\RQG UHYHDOHG WKDW s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s$ DW 7UDPEOHjV 36,5 LQGLFDWHG WKDW KH VKRXOG EH KHOG EDVHG RQ WKH UHFRUG WKRVH LVVXHV FRXOG QRW EH UHVROYHG DFFRXQWDEOH IRU YDULRXV TXDQWLWLHV RI FRFDLQH DQG FRFDLQH K\GURFKORULGH EH\RQGDUHDVRQDEOHGRXEW,G7KHFRXUWWKHQZHQWRQWR LQFOXGLQJ JUDPV RI FRFDLQH K\GURFKORULGH WKDW KH KDG VROG SULRU WR KLV DUUHVW DQG DQRWKHU JUDPV RI WKH VDPH W\SH RI GUXJ IRXQG RQ KLP ZKHQ DGRSWDSHUVHDSSURDFKWRWKHLVVXHLWIDFHGm:HKROGWKDW KH ZDV DUUHVWHG s$ DW 7KH 36,5 DOVR LQGLFDWHV WKDW 7UDPEOH WKHJRYHUQPHQWFDQQRWPHHWLWVEXUGHQXQGHUWKHKDUPOHVV FRRUGLQDWHG WKH VDOH RI YDULRXV RWKHU VSHFLILF DPRXQWV RI FUDFN WR D HUURUVWDQGDUGZKHQGUXJTXDQWLW\LVQHLWKHUFKDUJHGLQWKH FRQILGHQWLDO LQIRUPDQW s$ DW 7UDPEOH FKDOOHQJHV LQGLFWPHQWQRUSURYHGWRDMXU\EH\RQGUHDVRQDEOHGRXEWLI QRQH RI WKHVH TXDQWLWLHV DOWKRXJK KH GRHV FKDOOHQJH RWKHU TXDQWLWLHV WKHVHQWHQFHUHFHLYHGLVJUHDWHUWKDQWKHFRPELQHGPD[LPXP DWWULEXWHG WR KLP s$ DW $FFRUGLQJ WR 6WHZDUWjV 36,5 VKH DPRQJ RWKHU WKLQJV DVVLVWHG FRGHIHQGDQW 2VVLH sDFNLH %U\GLH LQ VHOOLQJ VHQWHQFHVIRUWKHLQGHWHUPLQDWHTXDQWLW\RIIHQVHVFKDUJHGl FUDFN $FFRUGLQJ WR %U\GLH 6WHZDUW ZRXOG GHOLYHU FUDFN WR %U\GLH ZKR ,GDW ZRXOG WKHQ VHOO LW %U\GLH HVWLPDWHG WKDW VKH VROG DQ RXQFH RI FRFDLQH D ZHHN IRU D SHULRG RI WZHOYH WR HLJKWHHQ PRQWKV DQG WKDW WKH GUXJV FDPH 7KLVFLUFXLWjVODZLVFRQWUDU\WRWKH1LQWK&LUFXLWj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l1HGHU86DW7KXVmD SUHVHUYH$SSUHQGLHUURU6WUD\KRUQLVGLVWLQJXLVKDEOHIURPWKH FRXUWUHYLHZLQJDGHIHQGDQWjVVHQWHQFHLQZKLFKLWILQGVDQ LQVWDQWFDVH$VZHH[SODLQHGLQWKDWFDVHWKHGHIHQGDQWjV $SSUHQGLHUURUPXVWORRNWRZKHWKHUWKHµRPLWWHGHOHPHQWLV DUJXPHQWZDVSUHVHUYHGDOWKRXJKmKHGLGQRWXWWHUWKHZRUGV VXSSRUWHG E\ XQFRQWURYHUWHG HYLGHQFHj DQG DOVR µDVN> @ GXHSURFHVVjl)GDW,QGHHGLWZRXOGKDYHEHHQ ZKHWKHU WKH UHFRUG FRQWDLQV HYLGHQFH WKDW FRXOG UDWLRQDOO\ SRLQWOHVVIRUKLVFRXQVHOWRKDYHGRQHVRLQDVPXFKDVQHLWKHU OHDG WR D FRQWUDU\ ILQGLQJ ZLWK UHVSHFW WR WKH RPLWWHG $SSUHQGLQRUsRQHVKDGEHHQGHFLGHGE\WKHWLPH'HIHQGDQW HOHPHQWjl&DQGHODULR)GDWFLWLQJ1HGHU ZDVVHQWHQFHG6HHHJ8QLWHG6WDWHVYsRUGDQ)G 86DW.LQJ)GDWH[SODLQLQJWKDWmVRPH QWK&LUUHYLHZLQJ$SSUHQGLFKDOOHQJHGH FLUFXLWVKDYHFRQFOXGHGWKDWDIDFWXDOILQGLQJWKDW$SSUHQGL QRYR ZKHUH GHIHQGDQW DUJXHG LQ GLVWULFW FRXUW WKDW sRQHV ZRXOGRWKHUZLVHUHTXLUHWREHGHWHUPLQHGE\DMXU\EH\RQGD UHTXLUHGWKDWGUXJTXDQWLW\EHDOOHJHGLQWKHLQGLFWPHQWDQG UHDVRQDEOHGRXEWPD\EHKDUPOHVVLIWKHFRXUWFDQFRQFOXGH SURYHGEH\RQGDUHDVRQDEOHGRXEW8QLWHG6WDWHVY1DQFH EH\RQGDUHDVRQDEOHGRXEWWKDWWKHMXU\YHUGLFWZRXOGKDYH )GWK&LUUHYLHZLQJ$SSUHQGL EHHQ WKH VDPH DEVHQW WKH HUURUl $V WKH &RXUW LQ 1HGHU FKDOOHQJH IRU SODLQ HUURU ZKHUH GHIHQGDQW FRXOG KDYH EXW H[SODLQHG IDLOHGWRUHO\RQsRQHVWRSUHVHUYHDUJXPHQWIRUDSSHDO7KLV FDVHKRZHYHULVVLPLODUWRRXUGHFLVLRQLQ8QLWHG6WDWHVY $ UHYLHZLQJ FRXUW PDNLQJ WKLV KDUPOHVVHUURU LQTXLU\ .LQJ)GWK&LU,QWKDWFDVHDIWHUDMXU\ GRHV QRW mEHFRPH LQ HIIHFW D VHFRQG MXU\ WR WULDO WKH GHIHQGDQWV ZHUH FRQYLFWHG RI DQG VHQWHQFHG IRU GHWHUPLQHZKHWKHUWKHGHIHQGDQWLVJXLOW\l5DWKHUD FRQVSLUDF\WRGLVWULEXWHDQGSRVVHVVZLWKLQWHQWWRGLVWULEXWH FRXUWLQW\SLFDODSSHOODWHFRXUWIDVKLRQDVNVZKHWKHUWKH PHWKDPSKHWDPLQH ,G DW 'UXJ TXDQWLW\ ZDV QHLWKHU UHFRUGFRQWDLQVHYLGHQFHWKDWFRXOGUDWLRQDOO\OHDGWRD DOOHJHG LQ WKH LQGLFWPHQW QRU VXEPLWWHG WR WKH MXU\ IRU D FRQWUDU\ILQGLQJZLWKUHVSHFWWRWKHRPLWWHGHOHPHQW,I UHDVRQDEOHGRXEWGHWHUPLQDWLRQ,GDW'HVSLWHWKHIDFW WKH DQVZHU WR WKDW TXHVWLRQ LV mQRl KROGLQJ WKH HUURU WKDWRQHRIWKHGHIHQGDQWVREMHFWHGLQWKHGLVWULFWFRXUWWRWKH KDUPOHVV GRHV QRW mUHIOHF>W@ D GHQLJUDWLRQ RI WKH H[DFW TXDQWLW\ RI GUXJV DWWULEXWHG WR KLP DUJXLQJ WKDW WKH FRQVWLWXWLRQDOULJKWVLQYROYHGl2QWKHFRQWUDU\LW DSSURSULDWHO\ DWWULEXWDEOH DPRXQW ZDV FORVHU WR JUDPV mVHUYH>V@DYHU\XVHIXOSXUSRVHLQVRIDUDV>LW@EORFN>V@ WKDQRQHNLORJUDPZHUHYLHZHGKLV$SSUHQGLEDVHGFKDOOHQJH VHWWLQJDVLGHFRQYLFWLRQVIRUGHIHFWVWKDWKDYHOLWWOH WRKLVVHQWHQFHIRUSODLQHUURULQDVPXFKDVKHIDLOHGWRUDLVH LI DQ\ OLNHOLKRRG RI KDYLQJ FKDQJHG WKH UHVXOW RI WKH DUJXPHQWVEDVHGRQsRQHVRU$SSUHQGLLQWKHGLVWULFWFRXUW WULDOl 1HGHU86DW LQDVPXFK DV VKH DQG 7UDPEOH KDG EURNHQ XS GXULQJ WKDW WLPH s$ DW $SSUHQGL ZDV GHFLGHG D \HDU DIWHU sRQHV ZKLFK ZDV GHFLGHG RQ 0DUFK 6HH s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sRQHVZDVGHFLGHGDQGFRXOG IDFW IRU SURRI EH\RQG D UHDVRQDEOH GRXEW 7KH $SSUHQGL KDYH UHOLHG RQ WKDW FDVH DV GLG WKH %HQIRUGV WR FKDOOHQJH EDVHGFKDOOHQJHLQ.LQJZDVUHYLHZHGIRUSODLQHUURU8QGHU WKHLU VHQWHQFHV ZLWK UHJDUG WR WKH GHWHUPLQDWLRQ RI GUXJ WKDWVWDQGDUGRIUHYLHZEHIRUHDFRXUWPD\FRUUHFWDQHUURU TXDQWLW\RQFRQVWLWXWLRQDOJURXQGV.LQJ)GDW LWPXVWGHWHUPLQHZKHWKHUWKHUHZDVHUURUWKDWZDV sRUGDQ)GDWQ1DQFH )GDW SODLQ DQG WKDW DIIHFWHG VXEVWDQWLDO ULJKWV ,G DW 7KHUHIRUH ZH ZLOO UHYLHZ 5RVVHOO 7UDPEOH DQG 6WHZDUWjV (YHQ WKHQ WKH HUURU FDQ RQO\ EH FRUUHFWHG LI LW VHULRXVO\ $SSUHQGLFODLPVIRUSODLQHUURU DIIHFWVWKHIDLUQHVVLQWHJULW\RUSXEOLFUHSXWDWLRQRIMXGLFLDO SURFHHGLQJV ,G :H XOWLPDWHO\ GHWHUPLQHG WKDW WKH & GHIHQGDQWVj VXEVWDQWLDO ULJKWV ZHUH QRW DIIHFWHG E\ WKH $SSUHQGLHUURU,GDW:HH[SODLQHGLQ.LQJWKDWWKH 1DWKDQ%HQIRUGDQG5HQD%HQIRUG VXEVWDQWLDOULJKWVSURQJRIWKHSODLQHUURUDQDO\VLVmLVDNLQWR WKHKDUPOHVVHUURUDQDO\VLVHPSOR\HGLQSUHVHUYHGHUURUFDVHV :LWKDQXQVSHFLILHGGUXJTXDQWLW\1DWKDQ%HQIRUGIDFHG l,GDW7KHGLIIHUHQFHKRZHYHULVWKDWXQGHUSODLQ DVWDWXWRU\PD[LPXPVHQWHQFHRIWKLUW\\HDUVDVDSULRUIHORQ\ HUURUUHYLHZWKHEXUGHQLVRQWKHGHIHQGDQWWRVKRZWKDWWKH GUXJRIIHQGHUXQGHUE&+RZHYHUEDVHGRQWKH HUURU ZDV SUHMXGLFLDO LH WKDW KLV VXEVWDQWLDO ULJKWV ZHUH GLVWULFW FRXUWjV GUXJ TXDQWLW\ GHWHUPLQDWLRQV %HQIRUG ZDV DIIHFWHG8QLWHG6WDWHVY9RQQ6&W VHQWHQFHGWRDWHUPRILPSULVRQPHQWH[FHHGLQJWKHRWKHUZLVH 7KH WDEOHV DUH WXUQHG XQGHU KDUPOHVV HUURU UHYLHZ DV WKH DSSOLFDEOHGHIDXOWVWDWXWRU\PD[LPXP7KHGLVWULFWFRXUWKHOG JRYHUQPHQWEHDUVWKHEXUGHQRIVKRZLQJWKDWWKHHUURUKDGQR %HQIRUGUHVSRQVLEOHIRUNLORJUDPVRISRZGHUFRFDLQHDQG HIIHFWRQDGHIHQGDQWVjVXEVWDQWLDOULJKWV,G1HYHUWKHOHVV NLORJUDPVRIFUDFNFRFDLQHWKHUHE\H[SRVLQJKLPWRWKH WKHIDFWWKDWZHIRXQGLQ.LQJWKDWWKHGHIHQGDQWVj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mFDQQRW 7KH GLVWULFW FRXUW HVWDEOLVKHG D EDVH RIIHQVH OHYHO RI EDVHG XSRQ D TXDQWLW\ RI NLORJUDPV RI FUDFN FRFDLQH 6HH 866* 'F 'UXJ FRQFOXGH EH\RQG D UHDVRQDEOH GRXEW WKDW WKH MXU\ YHUGLFW 4XDQWLW\ 7DEOH 7KH EDVH RIIHQVH OHYHO ZDV HQKDQFHG E\ D WRWDO RI VL[ ZRXOG KDYH EHHQ WKH VDPH DEVHQW WKH HUURUIRU H[DPSOH OHYHOV IRXU IRU %HQIRUGjV UROH LQ WKH RIIHQVH XQGHU 866* %E DQG 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO IXQGDPHQWDOO\XQIDLURUDQXQUHOLDEOHYHKLFOHIRUGHWHUPLQLQJ VHQWHQFHG%HQIRUGWRDILYH\HDUWHUPRIVXSHUYLVHGUHOHDVHRQ JXLOWRULQQRFHQFHlVXFKWKDWmQRFULPLQDOSXQLVKPHQWPD\ WKH GUXJ FRQVSLUDF\ FRQYLFWLRQ ZKLFK LV WKH PDQGDWRU\ EHUHJDUGHGDVIXQGDPHQWDOO\IDLUl1HGHU86DW PLQLPXPXQGHUE$ GRHVQRWDOVRmVHULRXVO\DIIHFWWKHIDLUQHVVLQWHJULW\RUSXEOLF UHSXWDWLRQRIMXGLFLDOSURFHHGLQJVl&RWWRQ6&WDW 5HQD%HQIRUGIDFHGDGHIDXOWPD[LPXPVHQWHQFHRIWZHQW\ \HDUVXQGHUE&%XWWKHGLVWULFWFRXUWKHOGKHU 7KLV UHDVRQLQJ LV EXWWUHVVHG E\ WKH 6XSUHPH &RXUWjV UHVSRQVLEOH IRU JUDPV NLORJUDPV RI FUDFN DQG GHFLVLRQLQs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sRKQVRQmFXWVDJDLQVWWKH WR 866* 'E %HQIRUGjV UHVXOWLQJ RIIHQVH OHYHO ZDV &URVV DUJXPHQW WKDW WKH RPLVVLRQ RI DQ HOHPHQW ZLOO DOZD\V >RU UHIHUHQFHG ZLWK D FULPLQDO KLVWRU\ FDWHJRU\ RI 9, WKH JXLGHOLQHV FDOOHG IRU QHFHVVDULO\@ UHQGHU D WULDO XQIDLUl 1HGHU 86 DW D PDQGDWRU\ OLIH VHQWHQFH 7KLV VHQWHQFH ZDV LPSRVHG WR UXQ FRQFXUUHQWO\ HPSKDVLVLQWKHRULJLQDO/LNHZLVHWKH6XSUHPH&RXUWj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jV EDVH RIIHQVH OHYHO VKRXOG EH EHFDXVH DOOVWUXFWXUDOHUURULVQRWWREHGHWHUPLQHGRQDFDVHE\FDVH VKH ZDV LQYROYHG ZLWK EHWZHHQ JUDPV DQG NLORJUDPV RI FUDFN EDVLV,GDWm>$@FRQVWLWXWLRQDOHUURULVHLWKHUVWUXFWXUDO 6HH 866* 'F +HU EDVH RIIHQVH OHYHO ZDV HQKDQFHG E\ WZR OHYHOV SXUVXDQW WR 866* 'E IRU SRVVHVVLRQ RI D ZHDSRQ GXULQJ RU LW LV QRWl ,G 7KH 6XSUHPH &RXUWjV DSSURDFK WR VXFK WKH GUXJ RIIHQVH WKHUHE\ UDLVLQJ WKH RIIHQVH OHYHO WR :LWK D FULPLQDO HUURUVKDVEHHQFDWHJRULFDO,G,QDVPXFKDVRQO\DOLPLWHG KLVWRU\ FDWHJRU\ RI ,,, WKH VHQWHQFLQJ JXLGHOLQHV \LHOGHG D UDQJH RI FODVVRImIXQGDPHQWDOFRQVWLWXWLRQDOHUURUVlGHILHVKDUPOHVV PRQWKV LPSULVRQPHQW 7KH GLVWULFW FRXUW VHQWHQFHG 0UV %HQIRUG WR HUURUUHYLHZDQGDOORWKHUFRQVWLWXWLRQDOHUURUVDUHVXEMHFWWR WKH PD[LPXP RI PRQWKV 6KH ZDV DOVR VHQWHQFHG WR FRQFXUUHQW WHUPV RI PRQWKV LPSULVRQPHQW DQG WKUHH \HDUV RI VXSHUYLVHG UHOHDVH RQ WKH PRQH\ ODXQGHULQJ FRXQW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO 8QGHU $SSUHQGL D GHIHQGDQW PD\ QRW EH H[SRVHG WR D :H DOVR GHFOLQH WR FDWHJRUL]H WKH RPLVVLRQ IURP WKH JUHDWHUSXQLVKPHQWWKDQWKDWDXWKRUL]HGE\WKHMXU\jVJXLOW\ LQGLFWPHQW WKDW RFFXUUHG LQ WKHVH FDVHV DV VWUXFWXUDO HUURU YHUGLFW 1HXKDXVVHU )G DW TXRWLQJ 3DJH 7KH 6XSUHPH &RXUW KDV LGHQWLILHG mD OLPLWHG FODVV RI )GDW%HFDXVHWKHMXU\GLGQRWGHWHUPLQHDTXDQWLW\RI IXQGDPHQWDO FRQVWLWXWLRQDO HUURUV WKDW GHI\ DQDO\VLV E\ GUXJVEH\RQGDUHDVRQDEOHGRXEWWKH%HQIRUGVVKRXOGKDYH KDUPOHVV HUURU VWDQGDUGVl 1HGHU 86 DW LQWHUQDO EHHQ VHQWHQFHG XQGHU WKH SHQDOWLHV SUHVFULEHG XQGHU TXRWDWLRQPDUNVRPLWWHG6WUXFWXUDOHUURUVUHTXLUHDXWRPDWLF E&7KHJRYHUQPHQWFRQWHQGVWKDWWKHGLVWULFW UHYHUVDOGHVSLWHWKHHIIHFWRIWKHHUURURQWKHWULDOjVRXWFRPH FRXUWLQIDFWGHWHUPLQHGWKHGUXJTXDQWLWLHVDWWULEXWDEOHWR ,G$VIRUDOORWKHUHUURUVmFRXUWVPXVWDSSO\)HG5&ULP WKH%HQIRUGVEH\RQGDUHDVRQDEOHGRXEW7KLVDVVHUWLRQOLNHO\ 3DjVKDUPOHVVHUURUVWDQGDUGVDQGGLVUHJDUGHUURUVWKDW VWHPVIURPVWDWHPHQWVWKHGLVWULFWFRXUWMXGJHPDGHDW1DWKDQ DUHKDUPOHVVEH\RQGDUHDVRQDEOHGRXEWl1HGHU86DW %HQIRUGjVVHQWHQFLQJKHDULQJ HPSKDVLVLQWKHRULJLQDO7KHHUURUFRPSODLQHGRILQWKH LQVWDQWFDVHLVQRWDPRQJWKRVHOLVWHGLQ1HGHUWKDWFODVVLI\DV ,KHDUGDERXW>ZLUHWDS@SKRQHFDOOV,PHDQ,KHDUG VWUXFWXUDO $V SUHYLRXVO\ PHQWLRQHG VWUXFWXUDO mHUURUV VRPXFKHYLGHQFHRIGUXJVLQWKHFRQVSLUDF\WKDW,PHDQ LQIHFWWKHHQWLUHWULDOSURFHVVDQGµQHFHVVDULO\UHQGHUDWULDO DQGLWjVQRWRQO\WHVWLPRQ\,KHDUGWKHSKRQHFDOOV IXQGDPHQWDOO\XQIDLUjl1HGHU86DWFLWDWLRQV RPLWWHG ,Q RWKHU ZRUGV VWUXFWXUDO HUURUV mGHSULYH GHIHQGDQWVRIµEDVLFSURWHFWLRQVjZLWKRXWZKLFKµDFULPLQDO WULDO FDQQRW UHOLDEO\ VHUYH LWV IXQFWLRQ DV D YHKLFOH IRU :HDOOKHDUG D ORWRIRWKHUHYLGHQFHDVZHOO,PHDQ GHWHUPLQDWLRQ RI JXLOW RU LQQRFHQFH DQG QR FULPLQDO ZHjYHVHHQUHDOHYLGHQFHDQGRWKHUHYLGHQFHLQWKLVFDVH SXQLVKPHQWPD\EHUHJDUGHGDVIXQGDPHQWDOO\IDLUjl,GDW ,I\RXZDQWPHWRVD\,jPFRQYLQFHGLI\RXZDQWPHWR 6DQFKH])GDW VD\ LW ,jP FRQYLQFHG EH\RQG D UHDVRQDEOH GRXEW WKDW WKHUHZDVGUXJTXDQWLWLHV,jYHDOUHDG\JRQHRYHUWKLV ,Q&RWWRQ6&WWKH6XSUHPH&RXUWGHFOLQHGWR DQG,GRQjWKDYHWRJRRYHUWKRVHTXDQWLWLHVDJDLQ,KRSH DGGUHVV WKH GHIHQGDQWVj DUJXPHQW WKDW WKH IDLOXUH WR DOOHJH EXW,PHDQ,GRQjWNQRZZKDWWRGR,PHDQ,KHDUGLW GUXJTXDQWLW\LQWKHLQGLFWPHQWZDVVWUXFWXUDOHUURU,GDW DOO $VZHSUHYLRXVO\H[SODLQHGRQSODLQHUURUUHYLHZWKH &RXUW LQVWHDG DVVXPHG WKH HUURU DIIHFWHG WKH GHIHQGDQWVj VXEVWDQWLDOULJKWVEXWIRXQGWKDWWKHHUURUGLGQRWVHULRXVO\ DIIHFWWKHIDLUQHVVLQWHJULW\RUSXEOLFUHSXWDWLRQRIMXGLFLDO SURFHHGLQJV,G+RZHYHUWKHIDFWWKDWWKH&RXUWGHFOLQHGWR QRWLFHWKHHUURUXQGHUSODLQHUURUUHYLHZVXSSRUWVWKHYLHZ WKDW VXFK HUURU ZDV QRW QHFHVVDULO\ mVWUXFWXUDOl UHTXLULQJ DXWRPDWLFUHYHUVDOLQDVPXFKDVLWLVGLIILFXOWWRLPDJLQHWKDW DQ HUURU WKDW mQHFHVVDULO\ UHQGHU>V@ D FULPLQDO WULDO 6HH 1HGHU VXSUD QRWH 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO mIXQGDPHQWDOlDQGWKDWZKHUHGUXJTXDQWLW\LVQRWDOOHJHGLQ 1DWKDQ%HQIRUG6HQWHQFLQJ+HDULQJs$DWHPSKDVLV WKH LQGLFWPHQW HUURU PXVW EH FRUUHFWHG 8QLWHG 6WDWHV Y DGGHG 7KH JRYHUQPHQW DUJXHV WKDW WKH %HQIRUGVj ULJKWV *RQ]DOH])G QWK&LUKROGLQJWKDW ZHUHQRWYLRODWHGHYHQWKRXJKWKHFRXUWUDWKHUWKDQWKHMXU\ ZKHUH$SSUHQGLHUURURFFXUVEHFDXVHRIDIDLOXUHWRFKDUJH HVWDEOLVKHG WKH GUXJ TXDQWLWLHV WKDW SHUPLWWHG VHQWHQFLQJ GUXJ TXDQWLW\ LQ WKH LQGLFWPHQW HUURU PXVW EH FRUUHFWHG EH\RQGWKHVWDWXWRU\PD[LPXP&RQWUDU\WRWKHJRYHUQPHQWjV LQDVPXFKDVWKHHUURULVMXULVGLFWLRQDODQGDGLVWULFWFRXUWRQO\ DUJXPHQWV KRZHYHU VXFK D ILQGLQJ E\ WKH GLVWULFW FRXUW KDVMXULVGLFWLRQWRVHQWHQFHDGHIHQGDQWWRDVHQWHQFHHTXDOWR ZRXOGQRWFXUHWKHIDLOXUHWRDOOHJHWKHGUXJTXDQWLWLHVLQWKH RU OHVV WKDQ WKH VWDWXWRU\ PD[LPXP SHWLWLRQ IRU UHKjJ HQ LQGLFWPHQW DQG KDYLQJ WKH LVVXH VXEPLWWHG WR D MXU\ ZKHUH EDQFJUDQWHGVXEQRP8QLWHG6WDWHVY/RQJRULD)G WKHUHLVDMXU\WULDO5DPLUH])GDWFI6WUD\KRUQ WK&LU )GDWUHPDQGLQJFDVHWRWKHGLVWULFWFRXUWVRWKDW FRXUWFRXOGGHWHUPLQHEH\RQGDUHDVRQDEOHGRXEWWKHLVVXHRI +RZHYHUZHEHOLHYHWKDWWKHRPLVVLRQRIWKHHOHPHQWRI GUXJTXDQWLW\ZKHUHGHIHQGDQWSOHDGHGJXLOW\,QDGGLWLRQ GUXJTXDQWLW\IURPWKHLQGLFWPHQWGLGQRWGHSULYHWKHGLVWULFW GHVSLWHWKHFRXUWjVVWDWHPHQWVGXULQJWKHVHQWHQFLQJKHDULQJ FRXUWRIVXEMHFWPDWWHUMXULVGLFWLRQRYHUWKHFDVHVQRZEHIRUH WKHUHFRUGUHIOHFWVWKDWWKHGLVWULFWFRXUWGHWHUPLQHGWKHGUXJ XV6HH&RWWRQ6&WDWUHMHFWLQJ)RXUWK&LUFXLWjV TXDQWLWLHV DWWULEXWDEOH WR 1DWKDQ %HQIRUG E\ D PHUH KROGLQJWKDWIDLOXUHWRDOOHJHGUXJTXDQWLW\LQDQLQGLFWPHQWLV SUHSRQGHUDQFHVWDQGDUGDQGQRWEH\RQGDUHDVRQDEOHGRXEW MXULVGLFWLRQDOVXFKWKDWLWGHSULYHVDFRXUWRIMXULVGLFWLRQWR GXHWRLWVEHOLHIWKDWWKHTXHVWLRQGLGQRWKDYHWREHVXEPLWWHG LPSRVH D VHQWHQFH IRU DQ RIIHQVH QRW FKDUJHG LQ WKH WRDMXU\7KXVWKH%HQIRUGVjVHQWHQFHVYLRODWHG$SSUHQGL LQGLFWPHQWmsXULVGLFWLRQLVWKHSRZHUWRGHFLGHDMXVWLFLDEOH FRQWURYHUV\DQGLQFOXGHVTXHVWLRQVRIODZDVZHOODVIDFW >DQG@HYHQWKHXQFRQVWLWXWLRQDOLW\RIWKHVWDWXWHXQGHUZKLFK WKH SURFHHGLQJ LV EURXJKW GRHV QRW RXVW D FRXUW RI $W %HQIRUGjV VHQWHQFLQJ WKH FRXUW VWDWHG MXULVGLFWLRQl 8QLWHG 6WDWHV Y :LOOLDPV 86 $Q\ZD\ KHUHjV ZKDW , KDYH WR VD\ DERXW DOO RI WKHVH GUXJ FLWDWLRQV RPLWWHG &RWWRQ 6&W DW TXDQWLWLHV %DVHG XSRQ ZKDW DSSHDUV LQ 3DUDJUDSKV H[SODLQLQJWKDWMXULVGLFWLRQPHDQVmWKHFRXUWVjVWDWXWRU\RU RI WKH SUHVHQWHQFH UHSRUW , JHW RYHU FRQVWLWXWLRQDOSRZHUWRDGMXGLFDWHWKHFDVHl3XUVXDQWWR JUDPV RI FUDFN %DVHG XSRQ ZKDW DSSHDUV WKH LQIRUPDWLRQ 86&GLVWULFWFRXUWVmKDYHRULJLQDOMXULVGLFWLRQ DSSHDULQJ LQ 3DUDJUDSK RI WKH RYHUDOORIIHQVHVDJDLQVWWKHODZVRIWKH8QLWHG6WDWHVl,G SUHVHQWHQFH UHSRUW , JHW RYHU JUDPV RI SRZGHU FRFDLQH SRZGHU FRFDLQH K\GURFKORULGH m>(@UURUVLQDQRQIULYRORXVLQGLFWPHQWGRQRWVWULSWKHGLVWULFW 1RZ RQ WRS RI WKDW LWjV HYLGHQW WKDW WKHUH ZDV D ZKROH ORW FRXUW RI MXULVGLFWLRQ XQGHU l 8QLWHG 6WDWHV Y PRUH SRZGHU JRLQJ RQ DQG GHDOW ZLWK WKDQ ZKDW DSSHDUV LQ WKRVH %MRUNPDQ)GWK&LU7KHUHIRUHm>DQ SDUDJUDSKV $QG IRU H[DPSOH \RX KDYH LI 0U /RSH] sDFNVRQ LQGLFWPHQWjV IDLOXUH WR DOOHJH DQ HOHPHQW RI D FULPH LV QRW LV WR EH FUHGLWHG 0U %HQIRUG ZRXOG KDYH JRWWHQ VHUYHG MXULVGLFWLRQDO LQ WKH VHQVH WKDW LW DIIHFWV D FRXUWjV VXEMHFW VRPHWKLQJ DURXQG VL[ NLORJUDPV RI SRZGHU VRPHWLPH EHWZHHQ $SULO DQG sXQH RI DQG WKDWjV WZR D PRQWK HYHU\ WZR PDWWHUMXULVGLFWLRQLHDFRXUWjVFRQVWLWXWLRQDORUVWDWXWRU\ ZHHNV $QG KH FRXOG KDYH JRWWHQ VRPH PRUH GLG PRUH WKDQ WKDW SRZHUWRDGMXGLFDWH>WKH@FDVHl3UHQWLVV)GDW EHWZHHQ sXO\ sXO\ SUREDEO\ DV PXFK EHWZHHQ $SULO DQG TXRWLQJ8QLWHG6WDWHVY0DUWLQ)GWK&LU WKH WLPH WKDW KH ZDV DUUHVWHG ,WjV QRW UHDO HDV\ WR ILQG RXW LQ WKLV FDVH SUHFLVHO\ ZKDW SRZGHU ZDV ZKDW ZKDW FUDFN ZDV ZKDW EXW ,jP FRQYLQFHG WKDW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO HUURULVMXULVGLFWLRQDO,GDWRYHUUXOLQJ8QLWHG6WDWHVY 7UDQ )G G &LU 6LPLODUO\ WKH 7HQWK &LUFXLWLQLWLDOO\KHOGWKDWZKHUHWKHLQGLFWPHQWIDLOHGWRDOOHJH GUXJ TXDQWLW\ VXFK D GHIHFW ZDV QRW VXEMHFW WR SODLQ RU WKHUH ZDV DW OHDVW ILYH NLORJUDPV RI FRFDLQH SRZGHU KHUH WKDW KDUPOHVV HUURU UHYLHZ 6HH sDFNVRQ )G DW UHMHFWLQJ JRYHUQPHQWjV DUJXPHQW WKDW GHIHQGDQWjV \HDU DUH WKDW LV XQDFFRXQWHG IRU LQ WKLV DPRXQW RI FUDFN GHDOW DVVXPLQJ WKDW \RX JRW WR XVH FUDFN QRW WKH SRZGHU WKDW ZDV FRQYHUWHG LQWR FUDFN ,jP QRW VXUH VHQWHQFHZDVVXEMHFWWRKDUPOHVVRUSODLQHUURUUHYLHZZKHUH WKH LQGLFWPHQW IDLOHG WR LQFOXGH HVVHQWLDO HOHPHQW RI GUXJ TXDQWLW\ +RZHYHU WKDW FRXUW KDV UHYLVLWHG LWV SRVLWLRQ UHJDUGLQJLQGLFWPHQWVWKDWIDLOWRDOOHJHHVVHQWLDOHOHPHQWVRI , WKLQN ERWK SRZGHU DQG FUDFN FDQ EH FRXQWHG HYHQ LI \RX FRRN LW LQWR FUDFN DQG WKHUH LV D ORW PRUH SRZGHU FUDFN DFULPH 6HH8QLWHG6WDWHVY3UHQWLVV)G FRFDLQH VR WKH FRFDLQH WKDW LW ZRXOG KDYH WDNHQ WR PDNH FUDFN WK &LU HQ EDQF KROGLQJ WKDW D mIDLOXUH RI DQ ZDV VWLOO ZDV VWLOO QRW DFFRXQWHG IRU LQ WKH QXPEHUV LQ WKH LQGLFWPHQWWRDOOHJHDQHVVHQWLDOHOHPHQWRIDFULPHGRHVQRW SUHVHQWHQFH UHSRUW ,jP VDWLVILHG E\ FHUWDLQO\ D SUHSRQGHUDQFH GHSULYHDGLVWULFWFRXUWRIVXEMHFWPDWWHUMXULVGLFWLRQUDWKHU RI WKH HYLGHQFH WKDW DW OHDVW D SUHSRQGHUDQFH RI WKH HYLGHQFH VXFKIDLOXUHLVVXEMHFWWRKDUPOHVVHUURUUHYLHZl7KH7HQWK WKDW 0U %HQIRUG LQ RQH ZD\ RU DQRWKHU ZDV LQYROYHG ZLWK WKH &LUFXLWIXUWKHUKHOGWKDWm>W@RWKHH[WHQWWKDWWKLV&RXUWjVSULRU GHFLVLRQVKROGRWKHUZLVHZHRYHUUXOHWKHPl,G7KH SXUFKDVH DQG VDOH RI RYHU ILYH NLORJUDPV RI SRZGHU DQG JUDPV RI FUDFN 7HQWK &LUFXLW DOVR H[SUHVVO\ UHMHFWHG WKH DUJXPHQW WKDW D IDLOXUH WR DOOHJH DQ HVVHQWLDO HOHPHQW RI D FULPH LQ DQ LQGLFWPHQW QHFHVVDULO\ IDOOV LQWR WKH FDWHJRU\ RI VWUXFWXUDO , GR QRW EHOLHYH WKDW GUXJ TXDQWLWLHV DUH HOHPHQWV RI WKH RIIHQVH DQG , GR QRW EHOLHYH WKDW GUXJ TXDQWLWLHV PXVW EH HUURUUHTXLULQJDXWRPDWLFUHYHUVDO,GDW GHWHUPLQHG E\ WKH MXU\$V D PDWWHU RI IDFW WKHUH LV SOHQW\ RI WK &LUFXLW DXWKRULW\ WKDW VD\V GUXJ TXDQWLWLHV DUH QRW WR EH $OWKRXJKPXFKDXWKRULW\VXJJHVWVWKDWDIDLOXUHWRDOOHJHDQ GHWHUPLQHG E\ D MXU\ HVVHQWLDOHOHPHQWRIDFULPHLQWKH$SSUHQGLFRQWH[WLVVXEMHFW WRKDUPOHVVHUURUUHYLHZRWKHUFRXUWVKDYHUHDFKHGDGLIIHUHQW 1DWKDQ %HQIRUG 6HQWHQFLQJ +HDULQJ s$ DW HPSKDVLV DGGHG FRQFOXVLRQ)RULQVWDQFHWKH(LJKWKDQG)LIWK&LUFXLWVKDYH 7KH GLVWULFW FRXUW DSSOLHG WKH VDPH UDWLRQDOH LQ VHQWHQFLQJ 5HQD %HQIRUG KHOGWKDWZKHUHGUXJTXDQWLW\LVPLVVLQJIURPWKHLQGLFWPHQW :HOO OHW PH MXVW VD\ WKDW DV , KDYH MXVW DV , KDYH MXVW VDLG KDUPOHVVRUSODLQHUURUUHYLHZLVLQDSSURSULDWHDVWRVHQWHQFHV LQ FRQQHFWLRQ ZLWK 0U %HQIRUG WKDW , GRQjW EHOLHYH WKH sRQHV LPSRVHGEH\RQGWKDWDOORZHGE\86&E& FDVH FKDQJHV DQ\WKLQJ KHUH >'@UXJ TXDQWLWLHV DUH QRW 6HH8QLWHG6WDWHVY0D\QLH)GWK&LU HOHPHQWV RI WKH RIIHQVH DQG PXVW EH GHWHUPLQHG E\ D &RXUW LQ KROGLQJ WKDW $SSUHQGL HUURU LQ LQGLFWPHQW LV FRQQHFWLRQ ZLWK VHQWHQFLQJ $QG DV , WKLQN , DOVR SRLQWHG RXW LQ FRQQHFWLRQ ZLWK 0U %HQIRUGjV FDVH WKH WK &LUFXLW KDV DFWXDOO\ VDLG LQ VHYHUDO FDVHV WKDW GUXJ TXDQWLWLHV VKRXOG QRW EH FKDUJHG LQ LQGLFWPHQWV $QG RI FRXUVH WKH MXU\ VKRXOG QRW EH LQVWUXFWHG RQ PDNLQJ 6HH DOVR 0F&R\ Y 8QLWHG 6WDWHV )G Q WK GHWHUPLQDWLRQV RQ GUXJ TXDQWLWLHV &LU UHFRJQL]LQJ WKDW LQ 3UHQWLVV WKH 7HQWK &LUFXLW RYHUUXOHG SULRU FDVHV WKDW KDG KHOG IDLOXUH WR DOOHJH HOHPHQW RI GUXJ TXDQWLW\ FDQQRW EH 5HQD %HQIRUG 6HQWHQFLQJ +HDULQJ s$ DW UHYLHZHG IRU SODLQ RU KDUPOHVV HUURU 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO FI8QLWHG6WDWHVY0RMLFD%DH])GVW &KDUOHV5RVVHOO&DOYLQ1HOVRQ7UDPEOHDQG6X]HWWH &LUKROGLQJWKDWDIDLOXUHWRLQFOXGHLQWKHLQGLFWPHQW 0LUDQGD6WHZDUW WKH W\SH RI ZHDSRQ LQYROYHG LQ WKH RIIHQVH XQGHU IHGHUDO ILUHDUP VWDWXWH ZDV QRW VWUXFWXUDO HUURU HUURU GLG QRW VR 5RVVHOO 7UDPEOH DQG 6WHZDUW DOVR HDFK FODLP WKDW WKHLU mLQWHUIHUH ZLWK VXFK EDVLF DQG IXQGDPHQWDO FRQVWLWXWLRQDO VHQWHQFHVYLRODWHG$SSUHQGL:KLOHZHKDYHVRPHGRXEWDV SURWHFWLRQVWKDWWKH\JRWRWKHVWUXFWXUHRIRXUFULPLQDOODZ WR ZKHWKHU $SSUHQGL ZDV LPSOLFDWHG DW DOO ZLWK UHVSHFW WR V\VWHPl 7KHVH FRXUWV KDYH HVVHQWLDOO\ GHWHUPLQHG WKDW VRPHRIWKHVH'HIHQGDQWVj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j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jV DXWRPDWLF ZHDSRQ WKH GHIHQGDQW LV VXEMHFW WR D PDQGDWRU\ PLQLPXP WHQ FRQQHFWLRQ WR EHWZHHQ WR JUDPV RI FUDFN VHH 866* 'F \HDU VHQWHQFH 86& F%L ,Q 0RMLFD%DH] )G 'UXJ 4XDQWLW\ 7DEOH ZKLFK ZDV HQKDQFHG E\ WZR OHYHOV SXUVXDQW WR WKH GHIHQGDQWV DUJXHG WKDW WKHLU LQGLFWPHQW ZDV FRQVWLWXWLRQDOO\ 866* 'E IRU SRVVHVVLRQ RI D ZHDSRQ LQ FRQQHFWLRQ ZLWK WKH GUXJ LQILUP UHTXLULQJ mSHU VHl UHYHUVDO LQDVPXFK DV WKH LQGLFWPHQW GLG QRW FRQVSLUDF\ DQG UHGXFHG E\ WKUHH OHYHOV IRU DFFHSWDQFH RI UHVSRQVLELOLW\ VSHFLI\ WKDW WKH ILUHDUP WKH\ XVHG LQ WKH XQGHUO\LQJ RIIHQVH ZDV D SXUVXDQW WR 866* ( WKHUHE\ \LHOGLQJ DQ DGMXVWHG RIIHQVH OHYHO RI VHPLDXWRPDWLF DVVDXOW ZHDSRQ ,G DW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO E& $W VHQWHQFLQJ KRZHYHU WKH GLVWULFW FRXUW TXRWLQJ$UL]RQDY)XOPLQDQWH86 GHWHUPLQHGWKDW7UDPEOHZDVUHVSRQVLEOHIRUNLORJUDPV 7KH &RXUW LQ 1HGHU UHFRJQL]HG WKDW mPRVW FRQVWLWXWLRQDO RI FUDFN WKHUHE\ H[SRVLQJ KLP WR D PDQGDWRU\ PLQLPXP HUURUVFDQEHKDUPOHVVl,GDWTXRWLQJ)XOPLQDQWH VHQWHQFH RI WZHQW\ \HDUV DQG D PD[LPXP RI OLIH 86DW,QGHHGmLIWKHGHIHQGDQWKDGFRXQVHODQGZDV LPSULVRQPHQW XQGHU 86& E$ 8QGHU WKH WULHGE\DQLPSDUWLDODGMXGLFDWRUWKHUHLVDVWURQJSUHVXPSWLRQ VHQWHQFLQJJXLGHOLQHV7UDPEOHjVVHQWHQFLQJUDQJHZDV WKDWDQ\RWKHU>FRQVWLWXWLRQDO@HUURUVWKDWPD\KDYHRFFXUUHG PRQWKV $IWHU WKH JRYHUQPHQW ILOHG D GRZQZDUG DUHVXEMHFWWRKDUPOHVVHUURUDQDO\VLVl5RVHY&ODUN 86 :LWK WKHVH SULQFLSOHV LQ PLQG WKH 6XSUHPH &RXUW +DYLQJ EHHQ GHHPHG UHVSRQVLEOH IRU NLORJUDPV RI FUDFN 7UDPEOHjV EDVH RIIHQVH OHYHO XQGHU WKH JXLGHOLQHV ZDV $00 866* GHWHUPLQHGWKDWDGLVWULFWFRXUWjVHUURULQIDLOLQJWRFKDUJHWKH 'F 'UXJ 4XDQWLW\ 7DEOH 7KH GLVWULFW FRXUW WKHQ HQKDQFHG WKLV MXU\RQDQHOHPHQWRIDQRIIHQVHLVVLPSO\DQDEVHQFHRID QXPEHU E\ WZR OHYHOV IRU SRVVHVVLRQ RI D ZHDSRQ GXULQJ WKH FULPH mFRPSOHWH YHUGLFWl RQ HYHU\ HOHPHQW RI DQ RIIHQVH ZKLFK SXUVXDQW WR 866* ' DQG E\ WKUHH OHYHOV IRU 7UDPEOHjV UROH LQ WKH YLRODWHVDGHIHQGDQWjV6L[WK$PHQGPHQWULJKWWRDMXU\WULDO RIIHQVH XQGHU 866* %E $IWHU D WKUHHOHYHO UHGXFWLRQ IRU +RZHYHU WKH &RXUW KHOG WKDW IDLOXUH WR GHOLYHU D MXU\ DFFHSWDQFH RI UHVSRQVLELOLW\ 7UDPEOHjV UHVXOWLQJ RIIHQVH OHYHO ZDV 7KH UDQJH RI PRQWKV ZDV GHULYHG E\ FURVVUHIHUHQFLQJ WKDW LQVWUXFWLRQZDVVXEMHFWWRKDUPOHVVUHYLHZEHFDXVHWKHHUURU RIIHQVH OHYHO ZLWK 7UDPEOHjV FULPLQDO KLVWRU\ FDWHJRU\ RI , GLGQRWUHQGHUWKHWULDOIXQGDPHQWDOO\XQIDLU7KH&RXUWQRWHG 2Q DSSHDO 7UDPEOH DOVR FRQWHVWV WKH GLVWULFW FRXUWjV GHWHUPLQDWLRQ WKDWRPLVVLRQRIDMXU\LQVWUXFWLRQmGLIIHUVPDUNHGO\IURPWKH WKDW KH ZDV D PDQDJHU RU VXSHUYLVRU LQ D GUXJ FRQVSLUDF\ LQYROYLQJ ILYH FRQVWLWXWLRQDOYLRODWLRQV>LWKDV@IRXQGWRGHI\KDUPOHVVHUURU RU PRUH SDUWLFLSDQWV DQG WKH UHVXOWLQJ WKUHHOHYHO HQKDQFHPHQW WR KLV EDVH UHYLHZl1HGHU86DW RIIHQVH OHYHO IRU KLV UROH LQ WKH RIIHQVH 6HFWLRQ %E RI WKH JXLGHOLQHV SURYLGHV m>L@I WKH GHIHQGDQW ZDV D PDQDJHU RU VXSHUYLVRU EXW QRW DQ RUJDQL]HU RU OHDGHU DQG WKH FULPLQDO $W OHDVW WZR FRXUWV RI DSSHDO KDYH KHOG WKDW D IDLOXUH WR DFWLYLW\ LQYROYHG ILYH RU PRUH SDUWLFLSDQWV RU ZDV RWKHUZLVH H[WHQVLYH DOOHJHGUXJTXDQWLW\LQWKHLQGLFWPHQWLVVXEMHFWWRKDUPOHVV LQFUHDVH >WKH EDVH RIIHQVH OHYHO@ E\ OHYHOVl 7UDPEOH ILOHG DQ REMHFWLRQ HUURUUHYLHZ6HHHJ8QLWHG6WDWHVY$GNLQV)G WR WKH SURSRVHG HQKDQFHPHQW ZKLFK WKH GLVWULFW FRXUW RYHUUXOHG +LV WK &LU m>,@W LV QRZ ZHOO HVWDEOLVKHG LQ WKLV VHQWHQFLQJ UDQJH XQGHU WKH JXLGHOLQHV UDQJH FDOOHG IRU D VHQWHQFLQJ UDQJH FLUFXLW WKDW$SSUHQGL HUURUV LQ ERWK WKH LQGLFWPHQW DQG WKH RI PRQWKV ZLWKRXW WKH HQKDQFHPHQW DQG PRQWKV DIWHU FKDUJH WR WKH MXU\ DUH VXEMHFW WR KDUPOHVV HUURU DQDO\VLV WKH HQKDQFHPHQW IRU KLV UROH LQ WKH RIIHQVH 2Q DSSHDO 7UDPEOH GRHV QRW FRQWHVW KLV UROH LQ WKH RIIHQVH UDWKHU KH GLVSXWHV WKH QXPEHU RI 6DQFKH] )G DW H[SODLQLQJ WKDW IDLOLQJ WR LQGLYLGXDOV LQYROYHG m'HWHUPLQDWLRQ RI D GHIHQGDQWjV UROH LQ DQ RIIHQVH VXEPLWGUXJTXDQWLW\WRWKHMXU\RULQFOXGHLWLQWKHLQGLFWPHQW LV D IDFWXDO LQTXLU\ UHYLHZHG RQ DSSHDO IRU FOHDU HUURUl 8QLWHG 6WDWHV Y LVMXVWDQHOHPHQWRIWKHWULDOSURFHVVDQGGRHVQRWULVHWRWKH &DVHVORUHQWH )G WK &LU OHYHORIVWUXFWXUDOHUURUKDUPOHVVHUURUUHYLHZLVDSSURSULDWH 7UDPEOHjV 36,5 VWDWHG WKDW m>G@XULQJ WKH FRXUVH RI KLV SDUWLFLSDWLRQ LQ WKLV RIIHQVH &DOYLQ 7UDPEOH H[HUFLVHG KLV PDQDJHPHQW DQG VXSHUYLVLRQ RYHU &DURO\Q 0LOODUG 0LUDQGD 6WHZDUW sHIIUH\ 5RELQVRQ .ZDPH *XVWXV DQG sDFNLH %U\GLHl 36,5 s$ DW +H FODLPV WKDW EHFDXVH WKH 7KH &RXUW HYHQ UHFLWHG D VKRUW OLVW RI HUURUV LQFOXGLQJ WRWDO GHQLDO FDVH DJDLQVW *XVWXV ZDV VXEVHTXHQWO\ GLVPLVVHG E\ WKH JRYHUQPHQW WKLV RI FRXQVHO ELDVHG WULDO MXGJH UDFLDO GLVFULPLQDWLRQ LQ JUDQG MXU\ VHOHFWLRQ &RXUW VKRXOG UHYHUVH WKH HQKDQFHPHQW EHFDXVH WKH JRYHUQPHQW FDQQRW GHQLDO RI VHOIUHSUHVHQWDWLRQ DW WULDO GHQLDO RI SXEOLF WULDO DQG GHIHFWLYH SURYH WKDW ILYH SHRSOH ZHUH LQYROYHG +RZHYHU 7UDPEOHjV DUJXPHQW UHDVRQDEOH GRXEW LQVWUXFWLRQ DV H[DPSOHV RI VWUXFWXUDO HUURUV 6HH 1HGHU VHHPV WR PLVUHDG WKH UHTXLUHPHQWV RI WKH UHOHYDQW JXLGHOLQH $SSOLFDWLRQ 86 DW 8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY 6WHZDUWHWDO 6WHZDUWHWDO ' GHSDUWXUH PRWLRQ IRU VXEVWDQWLDO DVVLVWDQFH XQGHU 866* . 7UDPEOH ZDV VHQWHQFHG WR D WHUP RI PRQWKV +DYLQJ GLVSRVHG RI 7UDPEOH 5RVVHOO DQG 6WHZDUWjV LPSULVRQPHQW DQG WHQ \HDUV RI VXSHUYLVHG UHOHDVH WR EH $SSUHQGLFODLPVZHDUHOHIWZLWKGHFLGLQJKRZWRUHVROYHWKH VHUYHG FRQFXUUHQWO\ ZLWK D PRQWK VHQWHQFH DQG WKUHH %HQIRUGVj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mRYHUZKHOPLQJHYLGHQFHlRIWKHGUXJTXDQWLWLHV DFWLYLWLHV RI ILYH RU PRUH SHUVRQV UDWKHU ILYH SHUVRQV PXVW KDYH EHHQ FI8QLWHG6WDWHVY'XDUWH)GVW&LU LQYROYHG LQ WKH FRQVSLUDF\ 7KH GLVWULFW FRXUW GHWHUPLQHG DQG 7UDPEOH GRHV QRW GLVSXWH WKDW KH GLUHFWHG WKH DFWLYLWLHV RI DW OHDVW RQH PHPEHU RI KROGLQJ XQGHU D SODLQ HUURU DQDO\VLV WKDW WKH SURRI RI D WKH FRQVSLUDF\ (YHQ ZLWKRXW .ZDPH *XVWXV WKH PHPEHUV RI WKH GHIHQGDQWjV mFRPSOLFLW\ LQ GLVWULEXWLQJ PRUH WKDQ FRQVSLUDF\ VWLOO QXPEHUHG ZHOO PRUH WKDQ ILYH SDUWLFLSDQWV ,Q IDFW HDFK NLORJUDPV RI PDULMXDQD LV VR RYHUZKHOPLQJ WKDW KLV 'HIHQGDQW LQ WKLV FRQVROLGDWHG DFWLRQ ZDV D PHPEHU RI WKH FRQVSLUDF\ VXEVWDQWLDOULJKWVFRXOGQRWKDYHEHHQDIIHFWHGE\VHQWHQFLQJ ZKLFK DFWXDOO\ LQYROYHG GR]HQV RI SDUWLFLSDQWV 7KHUHIRUH WKH GLVWULFW KLPEDVHGRQWKDWTXDQWLW\l FRXUW ZDV ZLWKLQ LWV ERXQGV WR VHW 7UDPEOHjV LQLWLDO JXLGHOLQHV VHQWHQFLQJ UDQJH DW PRQWKV 5XOH D RI WKH )HGHUDO 5XOHV RI &ULPLQDO 3URFHGXUH SURYLGHV WKDW m>D@Q\ HUURU GHIHFW LUUHJXODULW\ RU YDULDQFH 7UDPEOH DOVR FODLPV WKDW WKH JRYHUQPHQW GLG QRW SURYH WKDW WKH VXEVWDQFH LQ ZKLFK KH WUDIILFNHG ZDV FUDFN DV RSSRVHG WR VRPH RWKHU IRUP ZKLFKGRHVQRWDIIHFWVXEVWDQWLDOULJKWVVKDOOEHGLVUHJDUGHGl RI FRFDLQH EDVH +H DOVR DUJXHV WKDW WKH JRYHUQPHQW mGLG QRW DGGUHVV LQ ,Q 1HGHU Y 8QLWHG 6WDWHV 86 ZKLFK ZDV PXFK GHWDLOl ZKHWKHU WKH VXEVWDQFH ZDV FRFDLQH EDVH DW DOO DV RSSRVHG WR GHFLGHGVKRUWO\DIWHUsRQHVWKH6XSUHPH&RXUWGLVWLQJXLVKHG FRFDLQH K\GURFKORULGH SRZGHU $OWKRXJK HYLGHQFH ZDV EURXJKW IRUWK EHWZHHQmWULDOHUURUVlZKLFKPD\EHUHYLHZHGIRUKDUPOHVV DW 7UDPEOHjV VHQWHQFLQJ KHDULQJ WKDW FRXOG KDYH HVWDEOLVKHG WKDW WKH HUURU DQG mVWUXFWXUDO HUURUVl ZKLFK DUH H[FOXGHG IURP VXEVWDQFH ZDV FUDFN DQG QRW VRPH RWKHU IRUP RI FRFDLQH EDVH RU SRZGHU KDUPOHVV HUURU UHYLHZ 6WUXFWXUDO HUURUV UHIOHFW D mGHIHFW FRFDLQH WKH GHWHUPLQDWLRQ ZDV PDGH E\ WKH GLVWULFW FRXUW MXGJH E\ WKH SUHSRQGHUDQFHRIWKHHYLGHQFH VWDQGDUG +DG WKH FRXUW GHWHUPLQHG WKDW DIIHFWLQJ WKH IUDPHZRUN ZLWKLQ ZKLFK WKH WULDO SURFHHGV WKH NLORJUDPV RI FUDFN ZHUH DFWXDOO\ NLORJUDPV RI SRZGHU UDWKHUWKDQVLPSO\HUURULQWKHWULDOSURFHVVLWVHOIl,GDW FRFDLQH 7UDPEOHjV EDVH RIIHQVH OHYHO XQGHU WKH JXLGHOLQHV ZRXOG KDYH EHHQ D WKXV DIWHU UDLVLQJ WKLV QXPEHU E\ WKUHH OHYHOV IRU KLV UROH LQ WKH RIIHQVH DQG FURVVUHIHUHQFLQJ ZLWK D FULPLQDO KLVWRU\ FDWHJRU\ RI , 7UDPEOHj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mUHDOl WKUHDW WR WKH UHVSRQVLEOH IRU JUDPV RI FUDFN FRFDLQH WKHUHE\ MXGLFLDO SURFHHGLQJV ZRXOG EH WR DOORZ WKHP mWR UHFHLYH D H[SRVLQJ KHU WR WKH SHQDOW\ SURYLVLRQV RI E$ VHQWHQFHSUHVFULEHGIRUWKRVHFRPPLWWLQJOHVVVXEVWDQWLDOGUXJ ZKLFK FDUULHV D PLQLPXP VHQWHQFH RI WHQ \HDUV DQG D RIIHQVHVl ,G DW /LNHZLVH WKH RYHUZKHOPLQJ DQG PD[LPXP RI OLIH LPSULVRQPHQW 6WHZDUW ZDV HYHQWXDOO\ ODUJHO\XQFRQWURYHUWHGHYLGHQFHUHJDUGLQJGUXJTXDQWLW\LQ VHQWHQFHGWRDWHUPRIPRQWKVj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jVVHQWHQFHVYLRODWHG$SSUHQGL(YHQDVVXPLQJWKDW ILQG QR VXFK HUURU LQ WKLV FDVH ZLWK UHVSHFW WR WKHVH WKUHH WKHUHZDVHUURUWKDWZDVSODLQDQGWKDWDIIHFWHGVXEVWDQWLDO 'HIHQGDQWVZHGHFOLQHWRFRUUHFWDQ\$SSUHQGLHUURUWKDWPD\ ULJKWV 2ODQR 86 DW ZH VWLOO EHOLHYH WKHVH KDYHRFFXUUHGLQWKHLPSRVLWLRQRIWKHLUVHQWHQFHV 'HIHQGDQWVZRXOGQRWEHHQWLWOHGWRUHOLHI7KLVLVVREHFDXVH HYHQm>L@IDOOWKUHH>RIWKHVH@FRQGLWLRQVDUHPHWDQDSSHOODWH FRXUWPD\H[HUFLVHLWVGLVFUHWLRQWRQRWLFHDIRUIHLWHGHUURU RQO\ LI WKH HUURU VHULRXVO\ DIIHFW>V@ WKH IDLUQHVV 6WHZDUW DOVR FRQWHQGV WKDW KHU GXH SURFHVV ULJKWV ZHUH YLRODWHG LQWHJULW\ RU SXEOLF UHSXWDWLRQ RI MXGLFLDO SURFHHGLQJVl XQGHU $SSUHQGL EHFDXVH WKH GLVWULFW FRXUW LQFUHDVHG KHU EDVHRIIHQVH OHYHO E\ WZR OHYHOV DIWHU ILQGLQJ E\ D SUHSRQGHUDQFH RI WKH HYLGHQFH WKDW VKH 8QLWHG 6WDWHV Y &RWWRQ 6&W SRVVHVVHG D ILUHDUP SXUVXDQW WR 866* 'E 6KH IDLOHG WR UDLVH HPSKDVLVDGGHG,Q&RWWRQWKH6XSUHPH&RXUWGHDOWZLWK WKLV LVVXH EHIRUH WKH GLVWULFW FRXUW ,Q DQ\ HYHQW ZH GR QRW EHOLHYH WKDW WKH DQLVVXHLQDFDVHDQDORJRXVWRWKHRQHQRZEHIRUHWKLV&RXUW GLVWULFW FRXUWjV IDFWXDO ILQGLQJ LQ WKLV UHJDUG YLRODWHG 6WHZDUWjV GXH ZKHUH GUXJ TXDQWLW\ LQ D YDVW GUXJ FRQVSLUDF\ FDVH ZDV SURFHVV ULJKWV &I 0F0LOODQ Y 3HQQV\OYDQLD 86 QHLWKHU FKDUJHG LQ WKH LQGLFWPHQW QRU SURYHQ EH\RQG D KROGLQJ WKDW GXH SURFHVV QRW RIIHQGHG E\ 3HQQV\OYDQLD VWDWXWH WKDW DOORZHG WULDO FRXUW WR LQFUHDVH D GHIHQGDQWjV VHQWHQFLQJ UDQJH XS WR D ILYH UHDVRQDEOH GRXEW 7KH &RXUW KHOG WKDW EHFDXVH WKH \HDU PLQLPXP XSRQ ILQGLQJ E\ D SUHSRQGHUDQFH RI WKH HYLGHQFH WKDW WKH RYHUZKHOPLQJ HYLGHQFH LQ WKH UHFRUG VKRZHG WKDW WKH GHIHQGDQW YLVLEO\ SRVVHVVHG D ILUHDUP ZKLOH FRPPLWWLQJ DQ XQGHUO\LQJ GHIHQGDQWVj GUXJ FRQVSLUDF\ LQYROYHG GUXJ TXDQWLWLHV ZHOO RIIHQVH ZKLOH VWDWXWH DOORZHG FRXUW WR mXS WKH DQWHl RQ GHIHQGDQWjV DERYHWKDWQHFHVVDU\WRLPSRVHVHQWHQFHVXQGHUWKH KLJKHU VHQWHQFH LW GLG QRW DOWHU WKH PD[LPXP SHQDOW\ IRU WKH XQGHUO\LQJ RIIHQVH UDQJHV RI 86& E WKHQ GHVSLWH WKH IDFW WKDW )XUWKHU 6WHZDUW SOHDGHG JXLOW\ WR WKH GUXJ FRQVSLUDF\ DQG ZDV VXEMHFW WR D VWDWXWRU\ PD[LPXP \HDU VHQWHQFH XQGHU E& :H DOVR $SSUHQGL KDG EHHQ YLRODWHG DQG HYHQ DVVXPLQJ WKH KDYH DOUHDG\ KHOG WKDW WKH PRQWK VHQWHQFH VKH UHFHLYHG ZDV SURSHU GHIHQGDQWVj VXEVWDQWLDO ULJKWV KDG EHHQ DIIHFWHG WKH &RXUW XQGHU SODLQ HUURU UHYLHZ FRQVLGHULQJ WKH DPRXQW RI GUXJV LQYROYHG LQ WKH ZRXOGQRWDGGUHVVWKHHUURUEHFDXVHWKHHUURUGLGQRWVHULRXVO\ FRQVSLUDF\ 7KH IDFW WKDW KHU VHQWHQFLQJ UDQJH XQGHU WKH 6HQWHQFLQJ DIIHFWWKHIDLUQHVVLQWHJULW\RUSXEOLFUHSXWDWLRQRIMXGLFLDO *XLGHOLQHV ZDV LQFUHDVHG EHFDXVH RI WKH GLVWULFW FRXUWjV IDFWXDO ILQGLQJ SURFHHGLQJV ,G DW $FFRUGLQJ WR WKH &RXUW GRHV QRW FKDQJH WKDW UHVXOW 6HH HJ +DUSHU )G DW Q KROGLQJ WKDW EHFDXVH GHIHQGDQWjV VHQWHQFH XQGHU E ZDV SURSHU WKH
Document Info
Docket Number: 99-5850
Filed Date: 8/23/2002
Precedential Status: Precedential
Modified Date: 9/22/2015