Moss v. Hofbauer

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 .,0 0266 ; 3HWLWLRQHU$SSHOODQW    1R Y  !  *(5$/' +2)%$8(5  5HVSRQGHQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW 1RnsRKQ&RUEHWW2j0HDUD'LVWULFWsXGJH $UJXHG1RYHPEHU 'HFLGHGDQG)LOHG$SULO %HIRUH&/$ EHDWHQXS@WRQLJKWlLIKHGLGQRW 7KH 6XSUHPH &RXUW KDV ORQJ KHOG WKDW WKH IDLOXUH RI DQ JHWWKHJXQ DFFXVHG WR UHFHLYH WKH HIIHFWLYH DVVLVWDQFH RI FRXQVHO 6RPHWLPH ODWHU WKH YLFWLP DQG 9DXJKW HQFRXQWHUHG mFRQYHUW>V@ WKH DSSRLQWPHQW RI FRXQVHO LQWR D VKDP DQG 0RVVDQG*RXOGRXWVLGHRI0RVVjVDSDUWPHQWEXLOGLQJ QRWKLQJ PRUH WKDQ D IRUPDO FRPSOLDQFH ZLWK WKH 7KRPDVDUULYHGDVKRUWWLPHWKHUHDIWHU0RVVKDGDJXQ &RQVWLWXWLRQjV UHTXLUHPHQW WKDW DQ DFFXVHG EH JLYHQ WKH LQKLVOHIWKDQGRQ WKH VLGH+HDQGWKHYLFWLPEHJDQ DVVLVWDQFH RI FRXQVHO  7KH &RQVWLWXWLRQjV JXDUDQWHH RI DUJXLQJ:KHQ7KRPDVDSSHDUHGWKHYLFWLPVDLGWRKLP DVVLVWDQFH RI FRXQVHO FDQQRW EH VDWLVILHG E\ PHUH IRUPDO m,KDYHEHHQZDQWLQJWRJHWDW\RXDQ\ZD\l7KRPDV DSSRLQWPHQWl$YHU\Y$ODEDPD86 JUDEEHG WKH JXQ IURP 0RVV DQG VKRW WKH YLFWLP IRRWQRWHRPLWWHG%HFDXVH,ILQG0RGHOVNLjVSHUIRUPDQFH $OWKRXJK9DXJKWGLGQRWVHHZKRILUHGWKHVHFRQGVHULHV VRGHILFLHQWWKDWLWDPRXQWHGWRQRWKLQJPRUHWKDQDIRUPDO RIVKRWVWRWKHYLFWLPDQRWKHUH\HZLWQHVV1LFROH3XUGLH FRPSOLDQFHZLWKWKH&RQVWLWXWLRQVXFKWKDW3HWLWLRQHUZDVOHIW LGHQWLILHG0RVVDVWKHVKRRWHU ZLWKQRFRXQVHODWDOOLQYLRODWLRQRIKLV6L[WK$PHQGPHQW ULJKW , ZRXOG JUDQW 3HWLWLRQHUjV DSSOLFDWLRQ IRU D ZULW RI $OWHUDWLRQLQRULJLQDO KDEHDVFRUSXVDQG,WKHUHIRUHUHVSHFWIXOO\GLVVHQW  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  )ROORZLQJKLVFRQYLFWLRQ0RVVDSSHDOHG0RVVFODLPHG ,G  :H WKHQ IRXQG WKDW LW ZDV XQQHFHVVDU\ WR GHWHUPLQH WKDWWKHHYLGHQFHZDVLQVXIILFLHQWWRVXVWDLQKLVFRQYLFWLRQ ZKHWKHU WR DQDO\]H WKHVH GHILFLHQFLHV XQGHU D 6WULFNODQG WKDWWKHWULDOMXGJHJDYHHUURQHRXVMXU\LQVWUXFWLRQVWKDWWKH VWDQGDUGLQDVPXFKDVmWKHSUHMXGLFHUHVXOWLQJIURP>GHIHQVH DGPLVVLRQ RI D VWDWHPHQW PDGH E\ *RXOG YLRODWHG 0RVVjV FRXQVHOjV@ODZ\HULQJ>ZDV@VRSDWHQW:HILQGLWTXLWHFOHDU 6L[WK$PHQGPHQWULJKWWRFRQIURQWWKHZLWQHVVDJDLQVWKLP WKDW WKHUH ZHUH GHIHQVH WDFWLFV DYDLODEOH WR D UHDVRQDEO\ WKDW SURVHFXWRULDO PLVFRQGXFW RFFXUUHG DQG WKDW KLV WULDO FRPSHWHQWDWWRUQH\WKDWFUHDWHDUHDVRQDEOHSUREDELOLW\WKDW FRXQVHO ZDV LQHIIHFWLYH  $IWHU FRQFOXGLQJ WKDW QRQH RI LQWKHDEVHQFHRI>GHIHQVHFRXQVHOjV@LQFRPSHWHQFHWKHMXU\ 0RVVjVFODLPVSURYLGHGJURXQGVIRUUHYHUVDOWKH0LFKLJDQ ZRXOGKDYHDUHDVRQDEOHGRXEWUHVSHFWLQJ*URVHFORVHjVJXLOWl &RXUWRI$SSHDOVDIILUPHGKLVFRQYLFWLRQRQ$SULO ,GDW 7KH0LFKLJDQ6XSUHPH&RXUWGHQLHG0RVVjVUHTXHVWIRUOHDYH WRDSSHDORQsXO\ 0RGHOVNLjVIDLOXUHWRSUHVHQWDPHDQLQJIXOGHIHQVHIDLOXUH WR FURVVH[DPLQH WKH SURVHFXWLRQj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jVJXLOWFHUWDLQO\DSSHDUWRIDOOZLWKLQWKHERXQGVRI 7KRPDVVLJQHGWZR\HDUVDIWHUWKHWULDOLQZKLFKKHDYHUUHG GHILFLHQW FRQGXFW WKH OLNHV RI ZKLFK ZH IRXQG SDWHQWO\ WKDWKHZDVWKHRQO\GHIHQGDQWZKRILUHGWKHJXQGXULQJWKH SUHMXGLFLDOLQ*URVHFORVH6HH)GDW,ILQGWKH DOWHUFDWLRQWKDWOHGWR0DQOH\jVGHDWK PDMRULW\jVDWWHPSWVWRGLVWLQJXLVK*URVHFORVHIURPWKHPDWWHU DWKDQGWREHXQDYDLOLQJ)LUVW WKHPDMRULW\FRQWHQGVWKDW 2Q )HEUXDU\   WKH WULDO FRXUW GHQLHG 0RVVjV XQOLNHLQ*URVHFORVHWKHHYLGHQFHDJDLQVW3HWLWLRQHUZDVQRW PRWLRQ7KHFRXUWFRQFOXGHGWKDW7KRPDVjVYHUVLRQRIWKH ZHDN EHFDXVH RI WKH WHVWLPRQ\ RI WKH WZR H\HZLWQHVVHV FRQIURQWDWLRQ FRXOG KDYH EHHQ GLVFRYHUHG WKURXJK WKH )UHHPDQDQG3XUGLH$VFRQVLVWHQWO\HPSKDVL]HGWKURXJKRXW H[HUFLVHRIUHDVRQDEOHGLOLJHQFHE\0RVVjVWULDOFRXQVHO$V WKLV GLVVHQW WKH MXULVSUXGHQFH DQG VFKRODUO\ MRXUQDOV KDYH WKH FRXUW UHDVRQHG 7KRPDV ZDV DYDLODEOH WR WHVWLI\ DW WKH PDGHFOHDUWKHLQKHUHQWXQUHOLDELOLW\RIH\HZLWQHVVWHVWLPRQ\ WULDOEXW0RVVjVWULDOFRXQVHOGLGQRWFDOO7KRPDVDVDZLWQHVV 1H[WWKHPDMRULW\FRQWHQGVWKDWEHFDXVH3HWLWLRQHUGRHVQRW EHFDXVHDFFRUGLQJWRFRUUHVSRQGHQFHEHWZHHQ0RVVjVWULDO LGHQWLI\DQ\ZLWQHVVHVWKDWKLVFRXQVHOVKRXOGKDYHFDOOHGRU FRXQVHO DQG KLV QHZ DSSHOODWH FRXQVHO DW WKH WLPH RI WULDO REMHFWLRQV WKDW KLV FRXQVHO VKRXOG KDYH PDGH 0RGHOVNLjV 7KRPDVZRXOGKDYHWHVWLILHGWKDWKHILUHGRQO\WZRRIWKHIRXU SHUIRUPDQFH FDQQRW EH FRQVLGHUHG GHILFLHQW XQGHU EXOOHWV7KHFRXUWDOVRGHWHUPLQHGWKDWDQHYLGHQWLDU\KHDULQJ *URVHFORVH  +RZHYHU LQ VXSSRUW RI WKLV FRQWHQWLRQ WKH FRQFHUQLQJ 0RVVjV LQHIIHFWLYHDVVLVWDQFHRIFRXQVHO FODLP PDMRULW\ GRHV QRW UHO\ XSRQ *URVHFORVH EXW LQVWHDG UHOLHV ZDVQRWZDUUDQWHGIRUWKHUHDVRQVVHWIRUWKE\WKH&RXUWRI XSRQDFDVHIURPWKH1LQWK&LUFXLWOLNHO\EHFDXVH*URVHFORVH $SSHDOVLQLWVHDUOLHUUXOLQJ0RVVjVDSSHDOVZHUHGHQLHGE\ GLG QRW PDNH VXFK D UHTXLUHPHQW RI WKH SHWLWLRQHU  $V D ERWK WKH 0LFKLJDQ &RXUW RI $SSHDOV DQG WKH 0LFKLJDQ UHVXOWWKHPDMRULW\jVDWWHPSWWRGLVWLQJXLVK*URVHFORVHRQWKLV 6XSUHPH&RXUW EDVLVLVVLPSO\ZURQJ 2Q 0D\   0RVV SHWLWLRQHG IRU D ZULW RI KDEHDV )LQDOO\ WKH PDMRULW\ FODLPV WKDW XQOLNH LQ *URVHFORVH FRUSXVSXUVXDQWWR86&†LQWKH8QLWHG6WDWHV 3HWLWLRQHUZDVQRWGHQLHGKLVULJKWWRPHDQLQJIXODGYHUVDULDO 'LVWULFW &RXUW IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ  7KH FKDOOHQJH E\ 0RGHOVNLjV GHILFLHQW FORVLQJ DUJXPHQW  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  MXGJHjV GHWHUPLQDWLRQ WKDW 7KRPDVjV WHVWLPRQ\ DW WKH GLVWULFWFRXUWJUDQWHGDQHYLGHQWLDU\KHDULQJRQ0RVVjVFODLP HYLGHQWLDU\KHDULQJODFNHGFUHGLELOLW\l)LUVWWKHIDFWWKDWWKH RILQHIIHFWLYHDVVLVWDQFHRIFRXQVHOEXWGLVPLVVHGKLVRWKHU SURVHFXWRUPD\KDYHLPSHDFKHG7KRPDVPD\KDYHVXSSRUWHG FODLPV 7KRPDVj FODLP WKDW KH RQO\ SOHDGHG DV KH GLG LQ RUGHU WR VDWLVI\WKHSROLFH6WDWHGGLIIHUHQWO\WKHSURVHFXWLRQjVDELOLW\ $FFRUGLQJWRWKHGLVWULFWFRXUWDQHYLGHQWLDU\KHDULQJZDV WR LPSHDFK 7KRPDV PD\ KDYH VWUHQJWKHQHG WKH IRUFH RI QHFHVVDU\EHFDXVHWKHVWDWHFRXUWVQHLWKHUGHYHORSHGDIDFWXDO 7KRPDVjFODLPDVWRZK\KHGLGQRWFRPHIRUZDUGZLWKWKLV UHFRUGUHJDUGLQJZKHWKHUWKHSHUIRUPDQFHRI0RVVjVFRXQVHO H[FXOSDWLQJ HYLGHQFH VRRQHU  ,Q DGGLWLRQ WKH PDJLVWUDWHjV ZDVFRQVWLWXWLRQDOO\GHILFLHQWQRUIXOO\DGGUHVVHGWKHPHULWV DVVHVVPHQWRI7KRPDVjFUHGLELOLW\PD\KDYHEHHQGLIIHUHQW RIKLVFODLP7KH0LFKLJDQ&RXUWRI$SSHDOVKDGUHMHFWHG IURPWKDWRIWKHMXU\SDUWLFXODUO\LI0RGHOVNLKDGWDNHQWKH 0RVVjV FODLP WKDW KLV FRXQVHO ZDV LQHIIHFWLYH LQ IDLOLQJ WR WLPHWRFURVVH[DPLQHWKHSURVHFXWLRQjVWZRNH\ZLWQHVVHV REMHFW WR WKH SURVHFXWRUjV DUJXPHQW WKDW 0DQOH\ ZDV QRW $VWKHPDMRULW\LWVHOIPDNHVQRWHWKHUHDVRQWKDWWKLV&RXUW DUPHGDQGLQIDLOLQJWRFKDOOHQJHWKHYROXQWDULQHVVRI0RVVjV LVUHOXFWDQWWRVHWDVLGHFUHGLELOLW\GHWHUPLQDWLRQVPDGHE\D VWDWHPHQW WR WKH SROLFH  0RVVjV UHTXHVW IRU DQ HYLGHQWLDU\ MXU\LVEHFDXVHWKHMXU\KDVKDGWKHRSSRUWXQLW\WRYLHZWKH KHDULQJ ZDV GHQLHG E\ WKH VWDWH WULDO FRXUW mIRU WKH VDPH ZLWQHVVRQWKHVWDQGDQGDVVHVVKLVGHPHDQRU,QIDFWWKH UHDVRQVDVLQWKH$SULO&RXUWRI$SSHDOV2SLQLRQl SURVHFXWLRQKDGIDLWKHQRXJKLQ7KRPDVjFUHGLELOLW\WRFDOO $VWKHGLVWULFWFRXUWQRWHGKRZHYHU0RVVjVSURVHDSSHOODWH KLP DV D ZLWQHVV  ,W WKHUHIRUH VHHPV LOORJLFDO WR KROG WKDW EULHIDOVRPHQWLRQHGKLVFRXQVHOjVIDLOXUHWRFURVVH[DPLQH 0RGHOVNLjV IDLOXUH WR SXUVXH D GHIHQVH WKURXJK 7KRPDV )UHHPDQDQG3XUGLHDQG0RVVjVPRWLRQIRUUHFRQVLGHUDWLRQ FDQQRWEHIRXQGSUHMXGLFLDOEHFDXVH7KRPDVZDVLQFUHGLEOH DQGIRUDQHYLGHQWLDU\KHDULQJDOOHJHGWKDWKLVWULDOFRXQVHO DGPLWWHG 0RVVjV JXLOW LQ KHU FORVLQJ DUJXPHQW IDLOHG WR 3HWLWLRQHUUHOLHVXSRQ*URVHFORVHY%HOOLQVXSSRUWRIKLV FRQGXFW DQ HIIHFWLYH GHIHQVH DQG IDLOHG WR FURVVH[DPLQH FRQWHQWLRQWKDW0RGHOVNLUHQGHUHGLQHIIHFWLYHDVVLVWDQFHE\ ZLWQHVVHV DPRQJRWKHUWKLQJVKHUIDLOXUHWRSXUVXH7KRPDVDVDGHIHQVH VWUDWHJ\  ,Q *URVHFORVH WKLV &RXUW IRXQG WKH SHWLWLRQHUjV 3XUVXDQW WR WKH GLVWULFW FRXUWjV RUGHU WKH HYLGHQWLDU\ FRXQVHOFRQVWLWXWLRQDOO\LQHIIHFWLYHDQGQRWKLQJPRUHWKDQmµD KHDULQJZDVOLPLWHGWRmWKHLVVXHRILQHIIHFWLYHDVVLVWDQFHRI SHUVRQ ZKR KDSSHQ>HG@ WR EH D ODZ\HUjl  6HH  )G DW FRXQVHO UHJDUGLQJ FRXQVHOjV IDLOXUH WR FURVVH[DPLQH NH\ 7KH&RXUWIRXQGWKUHHDVSHFWVRIGHIHQVHFRXQVHOjV SURVHFXWLRQ ZLWQHVVHV LQYHVWLJDWH DQG SUHVHQW SRVVLEOH SHUIRUPDQFH WR EH mHVSHFLDOO\ DSSDOOLQJl LQ UHDFKLQJ WKLV GHIHQVHV LQFOXGLQJ FDOOLQJ $QGUXV 7KRPDV DV D GHIHQVH FRQFOXVLRQ ZLWQHVV DQG FRQFHGLQJ SHWLWLRQHUjV JXLOW LQ KHU FORVLQJ VWDWHPHQWl7KHGLVWULFWFRXUWUHIHUUHGWKHFDVHWRDPDJLVWUDWH  KLV IDLOXUH WR KDYH DQ\ GHIHQVH WKHRU\ ZKDWVRHYHU MXGJHWRFRQGXFWWKHHYLGHQWLDU\KHDULQJ  KLV IDLOXUH WR FRQGXFW DQ\ PHDQLQJIXO DGYHUVDULDO FKDOOHQJHDVVKRZQE\KLVIDLOXUHWRFURVVH[DPLQHPRUH $WWKHHYLGHQWLDU\KHDULQJ7KRPDVWHVWLILHGWKDWKHILUHGDOO WKDQKDOIRIWKHSURVHFXWLRQjVZLWQHVVHVWRREMHFWWRDQ\ RIWKHEXOOHWVWKDWZHUHLQWKHJXQDQGWKHQWKUHZWKHJXQLQ HYLGHQFH WR SXW RQ DQ\ GHIHQVH ZLWQHVVHV WR PDNH D WKHJUDVVDVKHZDVIOHHLQJWKHVFHQHRIWKHFULPH+HDOVR FORVLQJ DUJXPHQW DQG DW VHQWHQFLQJ WR SXW RQ DQ\ WHVWLILHGWKDWKHZDVWKHRQHZKRVDLGm,NLOOHGDPDQlDVKH PHDQLQJIXOPLWLJDWLRQHYLGHQFHDQGSHUKDSVPRVW ZDVUXQQLQJGRZQ DQDOOH\7KRPDVDGPLWWHGWKDWKHKDG LPSRUWDQWO\ KLV DEGLFDWLRQ RI KLV FOLHQWjV FDVH WR HDUOLHUWROGWKHSROLFHWKDWKHILUHGMXVWWZRVKRWVEXWFODLPHG 5LFNPDQjVFRXQVHO WKDWKHPDGHWKLVVWDWHPHQWRQO\DIWHUWKHSROLFHRIILFHUVVDLG WKDWWKH\GLGQRWEHOLHYHKLVLQLWLDOYHUVLRQRIZKDWKDSSHQHG  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  DQG WROG KLP WKDW WKH\ ZRXOG DOORZ KLP WR JR KRPH LI KH PHGLFDOH[DPLQHUj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jVWHVWLPRQ\DVDZKROHDQG WKHWHUPVRIKLVSOHDEDUJDLQUHTXLUHGKLPWRWHVWLI\WKDWKH KDG0RGHOVNLEURXJKWWRWKHIRUHWKHLQKHUHQWXQUHOLDELOLW\RI ILUHGRQO\WZREXOOHWV+HWKHUHIRUHDFNQRZOHGJHGWKDWKLV H\HZLWQHVV WHVWLPRQ\ WKH VLPLODULWLHV LQ WKH DSSHDUDQFH RI WHVWLPRQ\ DW KLV JXLOW\ SOHD KHDULQJ WKDW KH ILUHG RQO\ WZR 3HWLWLRQHU DQG 7KRPDV WKH LQFRQVLVWHQFLHV LQ 3XUGLHjV VKRWV DQG WKDW VRPHRQH HOVH DOVR VKRW 0DQOH\ KDG EHHQ WHVWLPRQ\ DQG WKH IDFW WKDW LQ FRQIOLFWHG ZLWK WKH PHGLFDO XQWUXWKIXO H[DPLQHUjV WHVWLPRQ\ DV ZHOO DV 3XUGLHjV SRVVLEOH ELDV D UHDVRQDEOHSRVVLELOLW\H[LVWVWKDWWKHRXWFRPHRI3HWLWLRQHUjV 7KRPDV ZDV UHOHDVHG IURP SULVRQ LQ  DIWHU VHUYLQJ WULDOZRXOGKDYHEHHQGLIIHUHQW,I0RGHOVNLjVWULDOVWUDWHJ\ IRXU\HDUVIRUVHFRQGGHJUHHPXUGHU+LVVHQWHQFHIRUWKLV ZDVWRGLVFUHGLWWKHWHVWLPRQ\RINH\ZLWQHVVHV3XUGLHDQG RIIHQVH ZDV D SHULRG RI LQFDUFHUDWLRQ IURP  WR  \HDUV )UHHPDQWKHQKHUIDLOXUHWRFURVVH[DPLQHHLWKHURIWKHPo 7KRPDV WKHQ VHUYHG WZR \HDUV RQ SDUROH IRU SRVVHVVLQJ D SDUWLFXODUO\FRQVLGHULQJWKDWVKHSUHVHQWHGQRRWKHUGHIHQVH ILUHDUPGXULQJWKHFRPPLVVLRQRIDIHORQ\ RQ3HWLWLRQHUjVEHKDOIoLQGLFDWHVWKDWVKHKDGQRVWUDWHJ\DW DOO6HH*URVHFORVHY%HOO)GWK&LU 0RVV ZDV WKH VHFRQG ZLWQHVV WR WDNH WKH VWDQG DW WKH ILQGLQJGHIHQVHFRXQVHOjVDFWLRQVLQIDLOLQJWRSUHVHQW HYLGHQWLDU\KHDULQJ+HWHVWLILHGWKDW7KRPDVILUHGDOORIWKH DGHIHQVHDQGIDLOLQJWRFURVVH[DPLQHPRUHWKDQKDOIRIWKH EXOOHWV LQ WKH JXQ DQG WKHQ IOHG  0RVV FODLPHG WKDW DIWHU SURVHFXWLRQjV ZLWQHVVHV DPRQJ RWKHU WKLQJV GHQLHG WKH UHPDLQLQJDWWKHVFHQHRIWKHVKRRWLQJIRUDERXWDPLQXWHKH SHWLWLRQHUWKHHIIHFWLYHDVVLVWDQFHRIFRXQVHO DQG *RXOG UDQ EDFN WR 0RVVjV DSDUWPHQW  ,Q FRQWUDVW WR )UHHPDQjV WHVWLPRQ\ 0RVV LQVLVWHG WKDW KH GLG QRW VD\ ,QWKLVUHJDUG,DOVRILQG0RGHOVNLjVIDLOXUHWRSUHVHQWD DQ\WKLQJWR*RXOGZKLOHWKH\ZHUHUXQQLQJ$FFRUGLQJWR GHIHQVHRQEHKDOIRI3HWLWLRQHULQFRQQHFWLRQZLWKKHUIDLOXUH 0RVVKLVWULDODWWRUQH\o6RSKLH0RGHOVNLoQHYHUTXHVWLRQHG WRLQWHUYLHZ7KRPDVDVWRWKHEDVLVIRUKLVSOHDDQGLQVWHDG KLP LQ GHWDLO DERXW ZKDW RFFXUUHG ZKHQ 0DQOH\ ZDV VKRW VLPSO\WDNLQJWKHVWDWHPHQWLQKLVSOHDDJUHHPHQWDVWUXHWR 0RVVDOVRWHVWLILHGWKDWKHWROG0RGHOVNLWKDWm,GLGQjWGRWKH EHEHORZDQREMHFWLYHVWDQGDUGRIDFFHSWDEOHSHUIRUPDQFH VKRRWLQJWKDW0U7KRPDVGLGWKHVKRRWLQJl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jVJXLOW UHPHPEHU0RVVWHOOLQJKHUWKDW7KRPDVDOVRVKRW0DQOH\ 5HJDUGLQJKHUSUHSDUDWLRQIRUWULDO0RGHOVNLDGPLWWHGWKDW 7KHPDMRULW\GLVPLVVHV3HWLWLRQHUjVFODLPRQWKHEDVLVWKDW VKHGLGQRWKLUHDQLQYHVWLJDWRULQWHUYLHZDQ\ZLWQHVVHVSULRU mWKH SURVHFXWRU FRXOG KDYH WKRURXJKO\ LPSHDFKHG 7KRPDV WR WULDO RU DWWHPSW WR ORFDWH RWKHU SHRSOH ZKR PLJKW KDYH ZLWKKLVFRQWUDU\VWDWHPHQWVJLYHQILUVWWRWKHSROLFHDQGODWHU REVHUYHGZKDWRFFXUUHG,QVWHDGVKHOLPLWHGKHUDFWLRQVWR DWKLVJXLOW\SOHDSURFHHGLQJlDQGEHFDXVHRImWKHPDJLVWUDWH  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  PD\ KDYH GLVFUHGLWHG WKLV GDPDJLQJ WHVWLPRQ\ KDG VKH FRQVXOWLQJZLWKWKHDWWRUQH\VIRU7KRPDVDQG*RXOGYLVLWLQJ LQWHUYLHZHGDQGFURVVH[DPLQHG)UHHPDQKHUGHFLVLRQQRWWR WKHVFHQHRIWKHFULPHDQGUHYLHZLQJWKHHYLGHQFHWKDWWKH FURVVH[DPLQHWKLVZLWQHVVFDQQRWEHFRQVLGHUHGDVZLWKLQWKH VWDWHSURYLGHGWRKHU0RGHOVNLDOVRDFNQRZOHGJHGWKDWVKH UDQJHRIDFFHSWDEOHFRPSHWHQWDVVLVWDQFH6HHLG*UHHQ FRXOGQRWUHFDOOZKHWKHUVKHSUHVHQWHGDQRSHQLQJVWDWHPHQW )G DW   ,Q DGGLWLRQ 0RGHOVNLjV REMHFWLYHO\ 6KHGLGUHPHPEHUKRZHYHUWKDWVKHLQIRUPHG0RVVRIWKH XQUHDVRQDEOHSHUIRUPDQFHSUHMXGLFHG3HWLWLRQHULQDVPXFKDV 6WDWHjV JXLOW\ SOHD RIIHU DQG WKDW 0RVV UHMHFWHG WKH RIIHU DSRVVLELOLW\H[LVWVWKDWLI0RGHOVNLFRXOGKDYHVXFFHVVIXOO\ GHVSLWHKHUUHFRPPHQGDWLRQWKDWKHDFFHSWLW GLVFUHGLWHG)UHHPDQjVGDPDJLQJWHVWLPRQ\WKHRXWFRPHRI WKHWULDOPD\KDYHEHHQGLIIHUHQWHVSHFLDOO\ZKHQFRQVLGHULQJ $FFRUGLQJ WR 0RGHOVNL KHU WULDO VWUDWHJ\ ZDV EDVHG RQ 0RGHOVNLjVRWKHUGHILFLHQFLHVDWWULDO7KHPDMRULW\GLVVHFWV UDLVLQJDUHDVRQDEOHGRXEWDERXWWKHFUHGLELOLW\RI)UHHPDQ 0RGHOVNLjVLQDFWLRQVDQGYLHZVWKHPLQGLYLGXDOO\WRFRQFOXGH DQG3XUGLH'HVSLWHWKLVDSSURDFKVKHPDGHDQLQWHQWLRQDO WKDW3HWLWLRQHUKDVQRWGHPRQVWUDWHGSUHMXGLFHEHFDXVHQRQH FKRLFHQRWWRFURVVH[DPLQHHLWKHURIWKHP6KHGHFLGHGWKDW RIWKHVHDFWLRQVLQGLYLGXDOO\ZRXOGKDYHFKDQJHGWKHRXWFRPH )UHHPDQjVWHVWLPRQ\nWKDWKHRYHUKHDUG0RVVjVRQWKHUXQ RI3HWLWLRQHUjVWULDO WKH6XSUHPH@&RXUWRQDTXHVWLRQRIODZRULIWKHVWDWH %HJLQQLQJ ZLWK 0RGHOVNLjV IDLOXUH WR FURVVH[DPLQH FRXUWGHFLGHVDFDVHGLIIHUHQWO\WKDQ>WKH6XSUHPH@&RXUWKDV )UHHPDQWKHPDMRULW\IRXQGWKDW0RGHOVNLjVLQDFWLRQVVLPSO\ RQDVHWRIPDWHULDOO\LQGLVWLQJXLVKDEOHIDFWVl:LOOLDPVY DPRXQWHG WR WULDO VWUDWHJ\ LQDVPXFK DV 0RGHOVNL IRXQG 7D\ORU86:LOOLDPV, )UHHPDQjV VWDWHPHQW LQKHUHQWO\ XQEHOLHYDEOH  m8QGHU WKH DQDO\VLVVHWIRUWKLQ6WULFNODQGHYHQGHOLEHUDWHWULDOWDFWLFV 6HFWLRQGjVmXQUHDVRQDEOHDSSOLFDWLRQlFODXVHDOVR PD\FRQVWLWXWHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOLIWKH\IDOO SURYLGHVWZRSRWHQWLDOEDVHVIRUKDEHDVUHOLHI&DPSEHOO µRXWVLGH WKH ZLGH UDQJH RI SURIHVVLRQDOO\ FRPSHWHQW )GDW7KHILUVWSRVVLELOLW\RFFXUVLImWKHVWDWHFRXUW DVVLVWDQFHjl0DUWLQ)GDWTXRWLQJ6WULFNODQG LGHQWLILHV WKH FRUUHFW JRYHUQLQJ OHJDO SULQFLSOH IURP >WKH 86DW$VGLVFXVVHGDERYHFRQVLGHULQJWKHIDFW 6XSUHPH@ &RXUWjV GHFLVLRQV EXW XQUHDVRQDEO\ DSSOLHV WKDW WKDW)UHHPDQWHVWLILHGWRDQDOOHJHGLQFULPLQDWLQJVWDWHPHQW SULQFLSOH WR WKH IDFWV    l  :LOOLDPV ,  86 DW  PDGHE\3HWLWLRQHUDQGWKHPDQ\EDVHVXSRQZKLFK0RGHOVNL 6HFRQG UHOLHI LV DYDLODEOH XQGHU WKLV SURYLVLRQ LI WKH VWDWH  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  FURVVH[DPLQDWLRQRIDZLWQHVVE\DFRGHIHQGDQW+RZHYHU FRXUWGHFLVLRQmHLWKHUXQUHDVRQDEO\H[WHQGVRUXQUHDVRQDEO\ 0RGHOVNLjVGHFLVLRQWRUHVWXSRQ WKHFRGHIHQGDQWjVFURVV UHIXVHV WR H[WHQG D OHJDO SULQFLSOH IURP 6XSUHPH &RXUW H[DPLQDWLRQGRHVUDLVHDSUHVXPSWLRQRISUHMXGLFHLQDVPXFK SUHFHGHQWWRDQHZFRQWH[Wl&DPSEHOO)GDW7KH DV3HWLWLRQHUKDGFRQVLVWHQWO\LQIRUPHG0RGHOVNLWKDWKHGLG SURSHULQTXLU\IRUWKHmXQUHDVRQDEOHDSSOLFDWLRQlDQDO\VLVLV QRWGRWKHVKRRWLQJWKHWHVWLPRQ\RIWKLVH\HZLWQHVVZHQWWR mZKHWKHUWKHVWDWHFRXUWjVDSSOLFDWLRQRIFOHDUO\HVWDEOLVKHG WKHKHDUWRI3HWLWLRQHUjVJXLOWDQGWKHMXULVSUXGHQFHDQGOHJDO IHGHUDOODZZDVREMHFWLYHO\XQUHDVRQDEOHl:LOOLDPV, VFKRODUVKLS KDYH ZHOO HVWDEOLVKHG WKDW ZKLOH H\HZLWQHVV 86DW$VDUHVXOWmDIHGHUDOKDEHDVFRXUWPD\QRWLVVXH WHVWLPRQ\KDVDSURIRXQGLPSDFWRQMXULHVLWLVRIWHQWLPHV WKHZULWVLPSO\EHFDXVHWKHFRXUWFRQFOXGHVLQLWVLQGHSHQGHQW H[WUHPHO\XQUHOLDEOH6HH:DWNLQVY6RZGHUV86 MXGJPHQWWKDWWKHUHOHYDQWVWDWHFRXUWGHFLVLRQDSSOLHGFOHDUO\   %UHQQDQ s GLVVHQWLQJ UHFRJQL]LQJ WKH HVWDEOLVKHGIHGHUDOODZHUURQHRXVO\RULQFRUUHFWO\5DWKHU mH[WUDRUGLQDU\LPSDFWlRIH\HZLWQHVVLGHQWLILFDWLRQHYLGHQFH WKDWDSSOLFDWLRQPXVWDOVREHXQUHDVRQDEOHl,GDW ZKLOHUHPLQGLQJWKH&RXUWRILWVKLVWRU\RIUHFRJQL]LQJWKH LQKHUHQWO\ VXVSHFW TXDOLWLHV RI H\HZLWQHVV LGHQWLILFDWLRQ $('3$ IXUWKHU FRQVWUDLQV D IHGHUDO KDEHDV FRXUW E\ HYLGHQFH8QLWHG6WDWHVY/DQJIRUG)G HVWDEOLVKLQJDSUHVXPSWLRQWKDWDVWDWHFRXUWjVGHWHUPLQDWLRQ WK&LUQRWLQJWKDWH[SHUWWHVWLPRQ\FDQDQGVKRXOG RI D IDFWXDO LVVXH LV FRUUHFW DQG PDQGDWLQJ WKDW m>W@KH EH XVHG WR H[SODLQ WR D MXU\ WKH SUREOHPV LQKHUHQW LQ DSSOLFDQWVKDOOKDYHWKHEXUGHQRIUHEXWWLQJWKHSUHVXPSWLRQ H\HZLWQHVV LGHQWLILFDWLRQ DQG FLWLQJ D OLWDQ\ RI FDVHV RIFRUUHFWQHVVE\FOHDUDQGFRQYLQFLQJHYLGHQFHl86& UHFRJQL]LQJWKHSUREOHPRIXQUHOLDEOHH\HZLWQHVVWHVWLPRQ\ †H,QDGGLWLRQ$('3$SODFHVQHZUHVWULFWLRQVRQ VHHDOVR*DU\/:HOOV:KDW'R:H.QRZ$ERXW(\HZLWQHVV DGLVWULFWFRXUWjVDELOLW\WRKROGDQHYLGHQWLDU\KHDULQJ ,GHQWLILFDWLRQ"  $0 36 $@IDLOXUHWRGHYHORS FRXQVHOjV GHFLVLRQ WR UHO\ HQWLUHO\ XSRQ D FRGHIHQGDQWjV WKHIDFWXDOEDVLVRIDFODLPLVQRWHVWDEOLVKHGXQOHVVWKHUHLV FRXQVHODWWULDOWREHFRQVWLWXWLRQDOO\LQHIIHFWLYHHYHQXQGHUD ODFN RI GLOLJHQFH RU VRPH JUHDWHU IDXOW DWWULEXWDEOH WR WKH KDUPOHVVHUURUVWDQGDUGRIUHYLHZ WKHSUHMXGLFLDOHIIHFWRI SULVRQHURUWKHSULVRQHUjVFRXQVHOl:LOOLDPV,,86DW 0RGHOVNLjV IDLOXUH WR FURVVH[DPLQH 3XUGLH LQ WKLV FDVH   $V D UHVXOW ZKHQ D SHWLWLRQHU SXUVXHV D FODLP ZLWK EHFRPHVH[FHHGLQJO\DSSDUHQW6HH*URVHORVHY%HOO SURSHU GLOLJHQFH LQ VWDWH FRXUW EXW LV XQDEOH WR GHYHORS LWV )GWK&LUILQGLQJLWmPLQGERJJOLQJl IDFWXDOEDVLV$('3$GRHVQRWSUHYHQWWKHGLVWULFWFRXUWIURP WKDWWKHSHWLWLRQHUjVFRXQVHOZRXOGGHIHUWRDFRGHIHQGDQWjV RUGHULQJDQHYLGHQWLDU\KHDULQJWRGHYHORSWKHIDFWXDOUHFRUG FRXQVHOZKHUHWKHWZRGHIHQVHVWUDWHJLHVZHUHDQWDJRQLVWLF *UHHU Y 0LWFKHOO  )G   WK &LU  ,QGHHGLQWKHPDWWHUDWKDQG3XUGLHWHVWLILHGWKDWVKHGLGQRW UHPDQGLQJWKHFDVHIRUDQHYLGHQWLDU\KHDULQJEHFDXVHWKH VHH FRGHIHQGDQW *RXOG DW WKH VFHQH WKHUHIRUH FURVV SHWLWLRQHUmH[HUFLVHGWKHQHFHVVDU\GLOLJHQFHLQDWWHPSWLQJWR H[DPLQDWLRQ RI 3XUGLH E\ *RXOGjV FRXQVHO FRXOG QRW KDYH HVWDEOLVKWKHIDFWXDOUHFRUGLQVWDWHFRXUWl WDNHQLQWRDFFRXQWWKHW\SHRIFURVVH[DPLQDWLRQQHHGHGWREH HIIHFWLYH IRU 3HWLWLRQHUjV GHIHQVH  $OWKRXJK WKH PDMRULW\ UHFRJQL]HVWKDW0RGHOVNLjVGHFLVLRQWRUHO\XSRQWKHFURVV  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  % ,QHIIHFWLYHDVVLVWDQFHRIFRXQVHO WHVWHGl7KHPDMRULW\jVUHDVRQLQJLQWKLVUHJDUGPD\OHQG LWVHOIWRDKDUPOHVVHUURUDQDO\VLVEXWLWLVPLVSODFHGLQWKH ,Q 6WULFNODQG Y :DVKLQJWRQ  86   WKH FRQWH[WRIDQLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOSHUVHFODLP 6XSUHPH&RXUWVHWIRUWKDWZRSDUWWHVWIRUHYDOXDWLQJZKHWKHU ,QDQ\HYHQWLWFDQKDUGO\EHVDLGWKDW0RGHOVNLjVSUHSDUDWLRQ WKHSHUIRUPDQFHRIFRXQVHOYLRODWHVDGHIHQGDQWjVULJKWVXQGHU IRUWULDOVKRXOGFXWDJDLQVWDILQGLQJRILQHIIHFWLYHQHVVZKHUH WKH6L[WK$PHQGPHQW$GHIHQGDQWPXVWILUVWVKRZWKDWWKH VKHIDLOHGWRLQWHUYLHZDVLQJOHZLWQHVVLQWKLVFDSLWDOPXUGHU SHUIRUPDQFHRIKLVRUKHUFRXQVHOZDVmEHORZDQREMHFWLYH FDVH$QGDVLGHIURPKHUDSSDUHQWVWDWHRIFRQVFLRXVQHVV VWDQGDUGRIUHDVRQDEOHQHVVl,GDW,QRUGHUWRDYRLG GXULQJWULDOWKHUHLVQRWKLQJWRLQGLFDWHWKDWVKHmDFWLYHO\l VHFRQGJXHVVLQJWULDOFRXQVHOjVVWUDWHJLFGHFLVLRQVmDFRXUW UHSUHVHQWHG'HIHQGDQWRUWKDWVKHZDVDWWHQWLYH,QIDFWWKH PXVW LQGXOJH D VWURQJ SUHVXPSWLRQ WKDW FRXQVHOjV FRQGXFW UHFRUGVWURQJO\VXJJHVWVRWKHUZLVHZKHUH0RGHOVNLIDLOHGWR IDOOV ZLWKLQ WKH ZLGH UDQJH RI UHDVRQDEOH SURIHVVLRQDO PDNHDQRSHQLQJVWDWHPHQWIDLOHGWRPDNHDVLQJOHREMHFWLRQ DVVLVWDQFH WKDW LV WKH GHIHQGDQW PXVW RYHUFRPH WKH IDLOHGWRFDOODVLQJOHZLWQHVVDQGJDYHDYHU\EULHIFORVLQJ SUHVXPSWLRQ WKDW XQGHU WKH FLUFXPVWDQFHV WKH FKDOOHQJHG DUJXPHQWZKLFKDVZLOOEHLOOXVWUDWHGDFWXDOO\DSSHDUHGDW DFWLRQPLJKWEHFRQVLGHUHGVRXQGWULDOVWUDWHJ\l,GDW RQH SRLQW WR EROVWHU 'HIHQGDQWjV JXLOW  7KH PDMRULW\jV LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG$FFRUGLQJO\ SRVLWLRQDSSHDUVWRFRPHGRZQWRDILQGLQJWKDWVRORQJDV mDQLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLPFDQQRWVXUYLYHVR FRXQVHO LV SK\VLFDOO\ SUHVHQW GXULQJ WULDO DQG FRQVFLRXV ORQJ DV WKH GHFLVLRQV RI D GHIHQGDQWjV WULDO FRXQVHO ZHUH LQHIIHFWLYHDVVLVWDQFHRIFRXQVHOSHUVHFDQQRWEHIRXQG2I UHDVRQDEOHHYHQLIPLVWDNHQl&DPSEHOO)GDW FRXUVH&URQLFWHOOVXVRWKHUZLVH6HH&URQLF86DW  7KHVHFRQGFRQGLWLRQWKDWPXVWEHPHWIRUDQLQHIIHFWLYH DVVLVWDQFHRIFRXQVHOFODLPWRVXFFHHGLVDVKRZLQJWKDWWKH  0RGHOVNLjVIDLOXUHWRFURVVH[DPLQH1LFROH3XUGLHRQWKH FRXQVHOjV GHILFLHQW SHUIRUPDQFH SUHMXGLFHG WKH GHIHQGDQW EDVLVWKDWVKHEHOLHYHGWKHFURVVH[DPLQDWLRQRI3XUGLHE\FR 6WULFNODQG  86 DW   7R VDWLVI\ WKLV FRQGLWLRQ GHIHQGDQWjVFRXQVHOZDVVXIILFLHQWIROORZVWKHVDPHSDWKDV m>W@KH GHIHQGDQW PXVW VKRZ WKDW WKHUH LV D UHDVRQDEOH KHU IDLOXUH WR FURVV H[DPLQH )UHHPDQ  $V ZLWK )UHHPDQ SUREDELOLW\WKDWEXWIRUFRXQVHOjVXQSURIHVVLRQDOHUURUVWKH *UHHQFDQEHORRNHGWRIRUVXSSRUW,Q*UHHQWKHSHWLWLRQHUjV UHVXOW RI WKH SURFHHGLQJ ZRXOG KDYH EHHQ GLIIHUHQW  $ FRXQVHOVWDWHGRQWKHUHFRUGWKDWKHKDGFRQIHUUHGZLWKWKHFR UHDVRQDEOHSUREDELOLW\LVDSUREDELOLW\VXIILFLHQWWRXQGHUPLQH GHIHQGDQWjVFRXQVHODVZHOODVKLVFOLHQWDQGWKDWDOOZHUHLQ FRQILGHQFHLQWKHRXWFRPHl,GDW DJUHHPHQW WKDW WKH FURVVH[DPLQDWLRQ RI WKH YLFWLP E\ FR GHIHQGDQWjVFRXQVHOZDVVXIILFLHQWKRZHYHUWKLV&RXUWIRXQG $OWKRXJK 6WULFNODQGjV UHTXLUHPHQW RI DQ LQGLYLGXDOL]HG WKHVHIDFWVXQDYDLOLQJFRQVLGHULQJWKHQDWXUHRIWKHWHVWLPRQ\ LQTXLU\ LQWR GHIHQVH FRXQVHOjV SHUIRUPDQFH SURYLGHV WKH LQYROYHG  6HH *UHHQ  )G DW  m,W LV GLIILFXOW WR JHQHUDO IUDPHZRUN IRU DQDO\]LQJ LQHIIHFWLYHDVVLVWDQFHRI SHUFHLYH D PRUH FULWLFDO VWDJH RI D WULDO WKDQ WKH WDNLQJ RI FRXQVHO FODLPV DQ LUUHEXWWDEOH SUHVXPSWLRQ RI SUHMXGLFH HYLGHQFHRQWKHGHIHQGDQWjVJXLOWl+HUH3XUGLHWHVWLILHGDV DSSOLHV LQ YHU\ OLPLWHG FLUFXPVWDQFHV  8QLWHG 6WDWHV Y DQ DOOHJHG H\HZLWQHVV WR VHHLQJ 3HWLWLRQHU FRPPLW WKH &URQLF86QRWLQJWKDWm>W@KHUHDUH VKRRWLQJDQGWKHUHIRUHDVLQ*UHHQ0RGHOVNLjVGHFLVLRQWR FLUFXPVWDQFHVWKDWDUHVROLNHO\WRSUHMXGLFHWKHDFFXVHG UHVWXSRQWKHFURVVH[DPLQDWLRQRI3XUGLHE\FRXQVHOIRUWKH WKDWWKHFRVWRIOLWLJDWLQJWKHLUHIIHFWLQDSDUWLFXODUFDVHLV FRGHIHQGDQWLVSUHVXPSWLYHO\SUHMXGLFLDO XQMXVWLILHGl7KHFRPSOHWHDEVHQFHRIFRXQVHORUWKHGHQLDO RI FRXQVHO DW D FULWLFDO VWDJH RI D GHIHQGDQWjV WULDO IRU $JDLQWKDWLVQRWWRVD\WKDWDSUHVXPSWLRQRISUHMXGLFHZLOO DULVHLQHYHU\FDVHZKHUHWKHGHIHQVHFRXQVHOUHOLHVXSRQWKH  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  /LNHZLVH LQ WKH PDWWHU DW KDQG DOWKRXJK 0RGHOVNL ZDV H[DPSOHYLRODWHVDGHIHQGDQWjV 6L[WK$PHQGPHQWULJKWWR SK\VLFDOO\SUHVHQWGXULQJ)UHHPDQjVFURVVH[DPLQDWLRQE\WKH FRXQVHOZLWKRXWDVKRZLQJRISUHMXGLFH,GDW Q FRGHIHQGDQWjV FRXQVHO LI DQ\ VKH UHPDLQHG PXWH ZKHQ SUHVHQWHGZLWKWKHRSSRUWXQLW\WRFURVVH[DPLQH)UHHPDQRQ ,Q DGGLWLRQ mLI FRXQVHO HQWLUHO\ IDLOV WR VXEMHFW WKH EHKDOI RI 3HWLWLRQHU WKHUHE\ UHQGHULQJ KHU FRQVWUXFWLYHO\ SURVHFXWLRQjV FDVH WR PHDQLQJIXO DGYHUVDULDO WHVWLQJ WKHQ DEVHQWGXULQJWKLVFULWLFDOVWDJHZKHUH)UHHPDQZDVWHVWLI\LQJ WKHUHKDVEHHQDGHQLDORI6L[WK$PHQGPHQWULJKWVWKDWPDNHV DVWR3HWLWLRQHUjVJXLOW$FFRUGLQJO\DVLQ*UHHQSUHMXGLFH WKHDGYHUVDU\SURFHVVLWVHOISUHVXPSWLYHO\XQUHOLDEOHl,GDW PXVWEHSUHVXPHG6HH*UHHQ)GDW$QGDVLQ   7KLV SRVVLELOLW\ RI FRQVWUXFWLYH GHQLDO RI FRXQVHO LV *UHHQ WKH IDFW WKDW 0RGHOVNL FODLPHG WKDW VKH PDGH D OLPLWHGWRVLWXDWLRQVLQYROYLQJmFRQVWLWXWLRQDOHUURURIWKHILUVW GHOLEHUDWHGHFLVLRQQRWWRFURVVH[DPLQH)UHHPDQDVSDUWRI PDJQLWXGHlZKLFKFDQQRWEHFXUHGHYHQLIQRSUHMXGLFHLV KHUWULDOVWUDWHJ\LVRIQRFRQVHTXHQFHWRWKHSUHVXPSWLRQRI VKRZQ  ,G TXRWLQJ 'DYLV Y $ODVND  86   SUHMXGLFH6HHLGDWVHHDOVR0DUWLQY5RVH  LQ ZKLFK WKH GHIHQGDQW ZDV GHQLHG WKH ULJKW RI )GWK&LUILQGLQJWKDWWKHGHIHQVH HIIHFWLYHFURVVH[DPLQDWLRQm$SDUWIURPFLUFXPVWDQFHVRI FRXQVHOjVIDLOXUHWRSDUWLFLSDWHLQWKHWULDOE\VWDQGLQJPXWH WKDW PDJQLWXGH KRZHYHU WKHUH LV JHQHUDOO\ QR EDVLV IRU GHVSLWHWKHIDFWWKDWFRXQVHOKDGGHOLEHUDWHO\FKRVHQWRVWDQG ILQGLQJD6L[WK$PHQGPHQWYLRODWLRQXQOHVVWKHDFFXVHGFDQ PXWHDVSDUWRIKLVWULDOVWUDWHJ\PDGHWKHDGYHUVDU\SURFHVV VKRZ KRZ VSHFLILF HUURUV RI FRXQVHO XQGHUPLQHG WKH XQUHOLDEOHWRWKHH[WHQWWKDWSUHMXGLFHZDVSUHVXPHG,QGHHG UHOLDELOLW\RIWKHILQGLQJRIJXLOWl,GDWQ 0RGHOVNLjVIDLOXUHWRFURVVH[DPLQH)UHHPDQPD\EHOLNHQHG WR KHU EHLQJ DVOHHS GXULQJ WKLV FULWLFDO VWDJH RI WKH )LQDOO\ WKHUH PD\ EH mVRPH RFFDVLRQV ZKHQ DOWKRXJK SURFHHGLQJVZKHUHHYLGHQFHRI3HWLWLRQHUjVJXLOWZDVEHLQJ FRXQVHO LV DYDLODEOH WR DVVLVW WKH DFFXVHG GXULQJ WULDO WKH WDNHQ WR WKH H[WHQW WKDW 3HWLWLRQHU ZDV OHIW ZLWK QR OLNHOLKRRGWKDWDQ\ODZ\HUHYHQDIXOO\FRPSHWHQWRQHFRXOG UHSUHVHQWDWLRQZKDWVRHYHU6HH%XUGLQHYsRKQVRQ)G SURYLGHHIIHFWLYHDVVLVWDQFHLVVRVPDOOWKDWDSUHVXPSWLRQRI   WK &LU  HQ EDQF SUHVXPLQJ SUHMXGLFH SUHMXGLFH LV DSSURSULDWH ZLWKRXW LQTXLU\ LQWR WKH DFWXDO ZKHUHWKHGHIHQGDQWjVFRXQVHOVOHSWWKURXJKSRUWLRQVRIWKH FRQGXFW RI WKH WULDOl  ,G DW   7KH 6XSUHPH &RXUW GHIHQGDQWjV WULDO RQ WKH EDVLV WKDW m>X@QFRQVFLRXV FRXQVHO H[SODLQHG LQ &URQLF WKDW 3RZHOO Y $ODEDPD  86  HTXDWHVWRQRFRXQVHODWDOOl DFDVHLQZKLFKGHIHQVHFRXQVHOZDVQRWDSSRLQWHG XQWLOWKHYHU\GD\RIWULDOZDVVXFKDFDVH&URQLF86 ,IVXSSRVLWLRQLVWREHKDGLQWKLVFDVHLWOLHVLQWKHPDMRULW\ DW%HFDXVHRIWKHODVWPLQXWHDSSRLQWPHQWRIFRXQVHO RSLQLRQ ZKHUHLQ WKH PDMRULW\ FRQFOXGHV WKDW 0RGHOVNLjV IRUWKHGHIHQGDQWVLQ3RZHOOmWKHVXUURXQGLQJFLUFXPVWDQFHV SUHSDUDWLRQIRUWULDOKHUmDFWLYHlUHSUHVHQWDWLRQRI'HIHQGDQW PDGHLWVRXQOLNHO\WKDWDQ\ODZ\HUFRXOGSURYLGHHIIHFWLYH DWWULDODORQJZLWKKHUSUHVHQFHDQGDWWHQWLYHQHVVGXULQJWKH DVVLVWDQFHWKDWLQHIIHFWLYHQHVVZDVSURSHUO\SUHVXPHGZLWKRXW WULDOGLVWLQJXLVKHV*UHHQDQGWKHFDVHVQRWHGDERYHIURPWKH LQTXLU\ LQWR DFWXDO SHUIRUPDQFH DW WULDOl  ,G DW   7KH IDFWVRIWKLV FDVH )LUVWZKDWHYHU0RGHOVNLjVDFWLRQVPD\ &RXUWQRWHGRQWKHRWKHUKDQGWKDWmWKH6L[WK$PHQGPHQW KDYH EHHQ EHIRUH WULDO RU ZKDWHYHU DFWLRQV VKH PD\ KDYH GRHV QRW UHTXLUH WKDW FRXQVHO GR ZKDW LV LPSRVVLEOH RU WDNHQGXULQJWULDOVHSDUDWHDQGDSDUWIURPWKHPDWWHURIWKHVH XQHWKLFDO  ,I WKHUH LV QR ERQD ILGH GHIHQVH WR WKH FKDUJH WZR NH\ ZLWQHVVHV WKH IDFW UHPDLQV WKDW KHU LQDFWLRQV FRXQVHOFDQQRWFUHDWHRQHDQGPD\GLVVHUYHWKHLQWHUHVWVRI GHSULYHG'HIHQGDQWRIKLVZHOOUHFRJQL]HGULJKWWRHIIHFWLYH KLV FOLHQW E\ DWWHPSWLQJ D XVHOHVV FKDUDGHl  ,G DW  FURVVH[DPLQDWLRQ6HH'DYLV86DWUHFRJQL]LQJ Q WKDWm>F@URVVH[DPLQDWLRQLVWKHSULQFLSDOPHDQVE\ZKLFKWKH EHOLHYDELOLW\RIDZLWQHVVDQGWKHWUXWKRIWKLVWHVWLPRQ\DUH  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  ,Q WKH SUHVHQW FDVH 0RVV ZDV QRW GHQLHG WKH ULJKW RI TXHVWLRQVDWDOOVRWKHUHIRUH,WROG0U%ULDQ)DOORQ>WKH FRXQVHODWDFULWLFDOVWDJHRIKLVWULDO1RULVWKLVDVLWXDWLRQLQ SURVHFXWRU@HYHQWKRXJKKHKDGKHUKHUHIRUP\FURVV ZKLFKVXUURXQGLQJFLUFXPVWDQFHVSUHYHQWHGWKHSRVVLELOLW\RI H[DPLQDWLRQ,WROGKLPWKDW,ZRXOGQRWEHDVNLQJKHU KLVFRXQVHOHIIHFWLYHO\UHSUHVHQWLQJ0RVVjVLQWHUHVWV)LQDOO\ DQ\TXHVWLRQV DVWKHIROORZLQJGLVFXVVLRQLQGLFDWHV0RVVjVFRXQVHOGLGQRW 7KDWjVEDVLFDOO\LWsXGJH,GRQjWNQRZZKDWHOVH,FDQ mHQWLUHO\IDLO>@WRVXEMHFWWKHSURVHFXWLRQjVFDVHWRPHDQLQJIXO VD\ DGYHUVDULDOWHVWLQJl,GDW0RGHOVNLjVSUHSDUDWLRQSULRU WRWULDOLQFOXGHGPHHWLQJZLWK0RVVEHIRUHWKHSUHOLPLQDU\ ,G7KHFRXUWGHQLHGWKHSHWLWLRQHUjVUHTXHVWIRUDPLVWULDOWKH H[DPLQDWLRQDWWHQGLQJWKHSUHOLPLQDU\H[DPLQDWLRQYLVLWLQJ SHWLWLRQHU ZDV FRQYLFWHG DQG VKH XOWLPDWHO\ ILOHG DQ 0RVVVHYHUDOWLPHVLQMDLOFRQVXOWLQJZLWKWKHDWWRUQH\VIRU DSSOLFDWLRQIRUDZULWRIKDEHDVFRUSXVFODLPLQJDPRQJRWKHU 7KRPDVDQG*RXOGYLVLWLQJWKHVFHQHRIWKHVKRRWLQJDQG WKLQJVWKDWVKHZDVGHQLHGKHU6L[WK$PHQGPHQWULJKWWRWKH UHYLHZLQJWKHUHFRUGVIURPWKHSROLFHGHSDUWPHQWZKLFKVKH HIIHFWLYHDVVLVWDQFHRIFRXQVHOGXHWRKHUFRXQVHOjVDEVHQFH REWDLQHG DIWHU GUDIWLQJ D GLVFRYHU\ RUGHU  6KH DOVR GXULQJ FURVVH[DPLQDWLRQ RI WKH YLFWLP  ,G DW   7KH HQFRXUDJHG0RVVWRDFFHSWWKHJXLOW\SOHDRIIHUWKDWWKH6WDWH GLVWULFWFRXUWDJUHHGDQGJUDQWHGWKHZULWRQWKLVEDVLV,G KDGSUHVHQWHGWRKLP'XULQJWKHWULDO0RGHOVNLUHVHUYHGKHU 7KHUHVSRQGHQW6WDWHRI2KLRDSSHDOHGWRWKLV&RXUWZKHUHLQ ULJKWWRPDNHDQRSHQLQJVWDWHPHQWFURVVH[DPLQHGVHYHUDO WKH LVVXH EHIRUH WKH &RXUW ZDV mZKHWKHU KDUPOHVV HUURU ZLWQHVVHVDQGPDGHDFORVLQJDUJXPHQW DQDO\VLVLVDSSURSULDWHZKHUHDSHWLWLRQHUGHPRQVWUDWHVVKH ZDV XQUHSUHVHQWHG E\ FRXQVHO IRU D FULWLFDO SHULRG RI WLPH $OWKRXJKVRPHRI0RGHOVNLjVGHFLVLRQVPLJKWKDYHEHHQ GXULQJWKHWDNLQJRIHYLGHQFHDJDLQVWKHUDWWULDOl,GDW XQZLVH KHU UHSUHVHQWDWLRQ GLG QRW OHDG WR mDQ DFWXDO EUHDNGRZQRIWKHDGYHUVDULDOSURFHVVGXULQJWKHWULDORIWKLV ,QDQVZHULQJWKLVTXHVWLRQLQWKHQHJDWLYHWKLV&RXUWEHJDQ FDVHl  &URQLF  86 DW   +HU SHUIRUPDQFH LV E\ UHYLHZLQJ WKH DERYHTXRWHG FROORTXLHV DQG IRXQG WKDW UHDGLO\ GLVWLQJXLVKDEOH IURP VLWXDWLRQV ZKHUH LQHIIHFWLYH m>D@OWKRXJK LW PD\ EH WKDW VRPH DEVHQFHV E\ D FULPLQDO DVVLVWDQFHKDVEHHQSUHVXPHG6HHHJ5LFNPDQY%HOO GHIHQGDQWjVDWWRUQH\PLJKWEHVRGHPLQLPLVWKDWWKHUHZRXOG )G   WK &LU  KROGLQJ WKDW &URQLF EH QR FRQVWLWXWLRQDO VLJQLILFDQFH WKH UHFRUG XQHTXLYRFDOO\ DSSOLHGZKHUHGHIHQVHFRXQVHOmFRPELQHGDWRWDOIDLOXUHWR GHPRQVWUDWHVWKDW0U&DUOLQjVDEVHQFHZDVQRWGHPLQLPLV DFWLYHO\DGYRFDWHKLVFOLHQWjVFDXVHZLWKUHSHDWHGH[SUHVVLRQV ,Q RXU YLHZ WKH UHFRUG SHUPLWV EXW RQH FRQFOXVLRQ RIFRQWHPSWIRUKLVFOLHQWIRUKLVDOOHJHGDFWLRQVl0DUWLQY SHWLWLRQHUjVFRQVWLWXWLRQDOULJKWWRFRXQVHOZDVLPSOLFDWHGE\ 5RVH)GWK&LUKROGLQJWKDW 0U&DUOLQjV>SHWLWLRQHUjVFRXQVHOjV@DEVHQFHl*UHHQ GHIHQVHFRXQVHOjVmWRWDOODFNRISDUWLFLSDWLRQGHSULYHG0DUWLQ )GDW+DYLQJVRIRXQGZHZHUHWKHQIDFHGZLWK RIHIIHFWLYHDVVLVWDQFHRIFRXQVHODWWULDODVWKRURXJKO\DVLIKH WKHFRQVWLWXWLRQDOVLJQLILFDQFHRIFRXQVHOjVDEVHQFHPHDQLQJ KDG EHHQ DEVHQWl WKHUHE\ YLRODWLQJ 0DUWLQjV 6L[WK ZKHWKHULWOHQGHGLWVHOIWRDKDUPOHVVHUURUUHYLHZRUZKHWKHU $PHQGPHQWULJKWVmHYHQZLWKRXWDQ\VKRZLQJRISUHMXGLFHl LWZDVRIWKHW\SHZKHUHSUHMXGLFHLVOHJDOO\SUHVXPHG,G,Q %XUGLQHYsRKQVRQ)GWK&LUHQ GHFLGLQJWKDWWKLVZDVDFDVHLQZKLFKSUHMXGLFHVKRXOGEH EDQFKROGLQJWKDW&URQLFDSSOLHGZKHUHGHIHQVHFRXQVHOZDV SUHVXPHGZHKHOGWKDWm>L@WLVGLIILFXOWWRSHUFHLYHDPRUH DVOHHSGXULQJVXEVWDQWLDOSRUWLRQVRI%XUGLQHjVWULDOQRWLQJ FULWLFDO VWDJH RI D WULDO WKDQ WKH WDNLQJ RI HYLGHQFH RQ WKH WKDW m>X@QFRQVFLRXV FRXQVHO HTXDWHV WR QR FRXQVHO DW DOOl GHIHQGDQWjVJXLOW>@lDQGWKDWWKHDEVHQFHRIWKHSHWLWLRQHUjV &KLOGUHVVYsRKQVRQ)GWK&LU FRXQVHODWWKLVFULWLFDOVWDJHZDVGHILFLHQWDVDPDWWHURIODZ KROGLQJWKDW&URQLFDSSOLHGZKHUHGHIHQVHFRXQVHODSSHDUHG VXFKWKDWSUHMXGLFHZDVSUHVXPHG6HHLGDW LQFRXUWRQO\mWRVWDQGE\OLVWHQWRWKHMXGJHDQGUHVSRQGWR  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  KH ZRXOG EH FRQWHQW ZLWK 0U 6DXJKQHVV\jV >FR DQ\FRQWLQJHQFLHVWKDWPLJKWDULVHlWDNLQJmQRUHVSRQVLELOLW\ GHIHQGDQWVjFRXQVHOjV@FURVVH[DPLQDWLRQRQEHKDOIRIDOO IRUDGYRFDWLQJWKHGHIHQGDQWjVLQWHUHVWVDWDFULWLFDOVWDJHRI WKUHHGHIHQGDQWVVRZLWKWKDWDVVXUDQFHWKH&RXUWIHHOV WKH>JXLOW\SOHDKHDULQJ@l WKDWRQHFURVVH[DPLQDWLRQLVVXIILFLHQW 6HYHUDO FLUFXLWV KDYH GUDZQ WKH GLVWLQFWLRQ EHWZHHQ ,GDW &URQLFjVSHUVHUXOHDQG6WULFNODQGjVUHTXLUHPHQWRIGHILFLHQW SHUIRUPDQFH DQG SUHMXGLFH LQ WHUPV RI ZKHWKHU GHIHQVH 7KHUHDIWHUKRZHYHUWKHSHWLWLRQHUDGGUHVVHGWKHWULDOMXGJH FRXQVHO SURYLGHG QR UHSUHVHQWDWLRQ DW DOO YHUVXV EDG HYHQ DQG DVNHG IRU D FRQWLQXDQFH VR WKDW KHU FRXQVHO FRXOG EH GHSORUDEOHDVVLVWDQFH6HHHJ*ORYHUY0LUR)G SUHVHQW WR FURVVH[DPLQH WKH YLFWLP  ,G  7KH SURVHFXWRU   WK &LU  KROGLQJ WKDW &URQLF GLG QRW DJUHHGWRKDYHWKHYLFWLPDYDLODEOHWRWHVWLI\WKHQH[WGD\DQG DSSO\ QRWLQJ WKDW m>W@KLV FDVH LV QRW RQH ZKHUH WKH ODZ\HU WKHFRXUWJUDQWHGWKHFRQWLQXDQFH,GDW7KHQH[W OLWHUDOO\VOHHSVWKURXJKWKH6WDWHjVFDVHRURWKHUZLVHPLJKWDV PRUQLQJWKHIROORZLQJFROORTX\RFFXUUHG ZHOOEHDEVHQWl&KLOGUHVV)GDWQRWLQJWKDW mZH KDYH FRQVLVWHQWO\ GLVWLQJXLVKHG VKRGG\ UHSUHVHQWDWLRQ 7+(&2857 $OO ULJKW 0U &DUOLQ>3HWLWLRQHUjV IURPQRGHIHQVHDWDOOl6FDUSDY'X%RLV)G FRXQVHO@,XQGHUVWDQG\RXZDQWWRJRRQWKHUHFRUG VW&LUGLVWLQJXLVKLQJmPDODGURLWSHUIRUPDQFHlIURP mQRQSHUIRUPDQFHl DQG KROGLQJ WKDW m6WULFNODQG FRQWUROV 05&$5/,1>3(7,7,21(5j6&2816(/@ 3(7,7,21(5j6&2816(/@ ,DVVXPH WHUULI\LQJLPDJHRI5LFNPDQDQGWKHUHE\DOLJQHG>GHIHQVH WKDW EHFDXVH , ZDVQjW SUHVHQW GXULQJ WKH HQWLUH FRXQVHO@ZLWKWKHSURVHFXWLRQDJDLQVWKLVRZQFOLHQWl:H H[DPLQDWLRQRIWKHILUVWZLWQHVV,ZRXOGDVVXPHWKDWWKDW ILQGQRVLPLODUFLUFXPVWDQFHVLQWKHSUHVHQWFDVH LVWKHUHDVRQZK\VKHZRXOGZDQWDPLVWULDO 7KH GLVVHQW UHDFKHV WKH RSSRVLWH FRQFOXVLRQ DSSO\LQJ , ZDV XQGHU WKH XQGHUVWDQGLQJ WKHUH ZDV D ZDLYHU &URQLFjVUXOHRISHUVHSUHMXGLFHRQWKHEDVLVRI0RGHOVNLjV LQYROYHG LQ WKDW QXPEHU RQH DQG QXPEHU WZR 0U IDLOXUH WR FURVVH[DPLQH WKH JRYHUQPHQWjV WZR NH\ 6KDXJKQHVV\ >FRGHIHQGDQWjV FRXQVHO@ DQG , GLVFXVVHG H\HZLWQHVVHV)UHHPDQDQG3XUGLH%HFDXVHZHEHOLHYHWKDW WKH WHVWLPRQ\ DQG WKH VWDWHPHQWV PDGH E\ WKH ILUVW WKLV FRQFOXVLRQ FRQVWLWXWHV DQ XQZDUUDQWHG H[WHQVLRQ RI ZLWQHVV DQG LW ZDV RXU LQFOXGLQJ 3DPHOD *UHHQ >WKH &URQLFDQGLWVSURJHQ\ZHUHVSHFWIXOO\GLVDJUHH SHWLWLRQHU@LWZDVRXUXQGHUVWDQGLQJWKDWLWZRXOGEHLQ WKHEHVWLQWHUHVWVRIRXUFDVHQRWWRDVNKHUDQ\IXUWKHU  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  7KHGLVVHQWUHFRJQL]HVWKDW0RGHOVNLZDVQRWSK\VLFDOO\ IURP0RGHOVNLjVIDLOXUHWRFURVVH[DPLQHWKHVHZLWQHVVHVWKDW DEVHQWVOHHSLQJRURWKHUZLVHLQFDSDFLWDWHGGXULQJHLWKHUWKH UDLVHVWKHVSHFWHURISUHMXGLFHSHUVH6HH)UHQFKYsRQHV GLUHFWH[DPLQDWLRQRIWKHVHZLWQHVVHVE\WKHVWDWHRUWKHFURVV )GWK&LUm7KHXQFHUWDLQW\RIWKH H[DPLQDWLRQFRQGXFWHGE\FRXQVHOIRU0RVVjVFRGHIHQGDQW SUHMXGLFH >WKH GHIHQGDQW@ VXIIHUHG EHFDXVH KH ZDV QRW ,WQHYHUWKHOHVVPDLQWDLQVWKDWLI0RGHOVNLKDGFURVVH[DPLQHG UHSUHVHQWHGE\FRXQVHOGXULQJWKLVFULWLFDOVWDJHRIKLVWULDO )UHHPDQDQG3XUGLHVKHPLJKWKDYHEHHQDEOHWRGLVFUHGLW PDNHV WKH RXWFRPH RI KLV WULDO XQUHOLDEOHl  0RGHOVNLjV WKHLU WHVWLPRQ\  :H EHOLHYH WKDW WKLV UHDVRQLQJ LV IODZHG IDLOXUH WR FURVVH[DPLQH HLWKHU RI WKHVH WZR ZLWQHVVHV o EHFDXVH LW LV EDVHG XSRQ VXSSRVLWLRQ DV WR ZKDW FURVV SDUWLFXODUO\ZKHQKHUDOOHJHGWULDOVWUDWHJ\ZDVWRLOOXVWUDWHWKH H[DPLQDWLRQPLJKWKDYHUHYHDOHGDQGEURDGJHQHUDOL]DWLRQV LQKHUHQWXQEHOLHYDELOLW\RIWKHLUWHVWLPRQ\oGHPRQVWUDWHVWKH DERXWWKHXQUHOLDELOLW\RIH\HZLWQHVVWHVWLPRQ\ SUHVXPSWLYHSUHMXGLFHVSRNHQRILQ&URQLFEHFDXVHLWFDOOVWKH UHOLDELOLW\ RI WKH WULDO RXWFRPH LQWR TXHVWLRQ  0RGHOVNLjV $VPRUHIXOO\GLVFXVVHGLQ3DUW,,%EHORZ0RGHOVNLKDG SK\VLFDO SUHVHQFH LQ WKH FRXUWURRP DOEHLW ZKLOH VKH ZDV SUHSDUHGKHUVHOIIRUWULDODFWLYHO\UHSUHVHQWHG0RVVGXULQJWKH DSSDUHQWO\FRQVFLRXVGRHVQRWKLQJWRFKDQJHWKLVUHVXOW6HH SURFHHGLQJVDQGDUWLFXODWHGVWUDWHJLFUHDVRQVIRUQRWFURVV LGDWUHMHFWLQJWKHDUJXPHQWWKDWmDQHUURUGXULQJWULDO H[DPLQLQJ WKH WZR ZLWQHVVHV LQ TXHVWLRQ  7KHVH IDFWRUV RQO\ UHTXLUHV DXWRPDWLF UHYHUVDO ZKHQ D GHIHQGDQW KDV FRPELQHGZLWK0RGHOVNLjVSUHVHQFHDQGDWWHQWLYHQHVVGXULQJ VXIIHUHGDWRWDOGHSULYDWLRQRIFRXQVHOl 0RVVjVWULDOGLVWLQJXLVKWKHSUHVHQWFDVHIURPWKHFDVHVXSRQ ZKLFKWKHGLVVHQWUHOLHV6HHHJ*UHHQY$UQ)G 7KLV&RXUWjVGHFLVLRQLQ*UHHQY$UQ)GWK WK&LUDSSO\LQJ&URQLFZKHUHFRXQVHOZDVQRW &LUYDFDWHGRQRWKHUJURXQGV86 SUHVHQW GXULQJ WKH FURVVH[DPLQDWLRQ RI D JRYHUQPHQW UHLQVWDWHG  )G   GLUHFWO\ VXSSRUWV WKLV ZLWQHVV QRWLQJ WKDW m>D@EVHQFH IURP WKH SURFHHGLQJV LV FRQFOXVLRQ,Q*UHHQDKDEHDVSHWLWLRQHUFODLPHGWKDWVKH GHILFLHQWSHUIRUPDQFHDVDPDWWHURIODZlYDFDWHGRQRWKHU ZDV GHQLHG KHU 6L[WK $PHQGPHQW ULJKW WR WKH HIIHFWLYH JURXQGV86UHLQVWDWHG)GWK DVVLVWDQFHRIFRXQVHOEHFDXVHKHUFRXQVHOZDVDEVHQWGXULQJ &LU%XUGLQHYsRKQVRQ)GWK&LU WKHDIWHUQRRQRIWKHILUVWGD\RIWULDOGXULQJZKLFKWKHVWDWHjV HQEDQFH[SODLQLQJWKDWZKHUHGHIHQVHFRXQVHOZDV ILUVWZLWQHVVYLFWLP0DXUHHQ0F1HDZDVFURVVH[DPLQHGE\ DVOHHS GXULQJ D VXEVWDQWLDO SRUWLRQ RI %XUGLQHjV WULDO D WKH DWWRUQH\ IRU WKH WZR RWKHU FRGHIHQGDQWV ZLWK ZKRP GHWHUPLQDWLRQ RI SHU VH SUHMXGLFH ZDV DSSURSULDWH EHFDXVH 3HWLWLRQHUZDVWULHG6HHLGDW3HWLWLRQHUjVFRXQVHOZDV m>X@QFRQVFLRXVFRXQVHOGRHVQRWDQDO\]HREMHFWOLVWHQRULQ SUHVHQW LQ WKH PRUQLQJ IRU WKH FURVVH[DPLQDWLRQ EXW ZDV DQ\ZD\H[HUFLVHMXGJPHQWRQEHKDOIRIDFOLHQWlVHHDOVR DEVHQWIRUDSRUWLRQRIWKHDIWHUQRRQVHVVLRQEHFDXVHKHZDV 7LSSLQVY:DONHU)GG&LUm>7@KH DWWHQGLQJDMXU\VHQWHQFLQJKHDULQJLQDFDSLWDOFDVHLQDQRWKHU EXULHGDVVXPSWLRQLQRXU6WULFNODQGFDVHVLVWKDWFRXQVHOLV FRXUWURRP RQ EHKDOI RI D GLIIHUHQW FOLHQW  ,G DW  SUHVHQWDQGFRQVFLRXVWRH[HUFLVHMXGJPHQWFDOFXODWLRQDQG :KHQ FRXQVHO IRU WKH FRGHIHQGDQWV ILQLVKHG KLV FURVV LQVWLQFWIRUEHWWHURUZRUVH%XWWKDWLVDQDVVXPSWLRQZH H[DPLQDWLRQ RI WKH YLFWLP FRXQVHO ORRNHG WR WKH FRXUW IRU FDQQRWPDNHZKHQFRXQVHOLVXQFRQVFLRXVDWFULWLFDOWLPHVl JXLGDQFH DV WR KRZ WR SURFHHG LQDVPXFK DV 3HWLWLRQHUjV HPSKDVLVDGGHG FRXQVHO ZDV DEVHQW DW WKDW SRLQW  ,G DW   7KH FRXUW UHVSRQGHG 0RGHOVNLjV SHUIRUPDQFH DV FRXQVHO JRRG RU EDG ZDV FOHDUO\ QRW WKH HTXLYDOHQW RI EHLQJ SK\VLFDOO\ RU PHQWDOO\ /HWWKHUHFRUGUHIOHFWWKH&RXUWLQDQWLFLSDWLRQRIWKLV DEVHQW DV LQ WKH DERYHFLWHG FDVHV  7KLV UHTXLUHV XV WR SUREOHPZLWK0U&DUOLQ>3HWLWLRQHUjVFRXQVHO@GLVFXVVHG HYDOXDWHKHUSHUIRUPDQFHXQGHUWKH6WULFNODQGVWDQGDUGVQRW LWZLWKKLPSULRUWROXQFKEUHDNDQGKHLQIRUPHGPHWKDW  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  ZKLFKZRXOGEHFRQVWLWXWLRQDOHUURURIWKHILUVWPDJQLWXGHDQG XQGHUWKH&URQLFUXOHRISHUVHSUHMXGLFH0RUHRYHUEHFDXVH QRDPRXQWRIVKRZLQJRIZDQWRISUHMXGLFHZRXOGFXUHLWl 0RGHOVNLjVDFWLRQVDQGLQDFWLRQVUHIOHFWHGVWUDWHJLFFKRLFHV &URQLF  86 DW  LQWHUQDO TXRWDWLRQ PDUNV DQG WKDWVKHPDGHDIWHUHQJDJLQJLQSUHWULDOSUHSDUDWLRQZHILQG FLWDWLRQVRPLWWHG K\SHUEROLFWKHGLVVHQWjVDVVHUWLRQWKDWRXUSRVLWLRQmDSSHDUV WR FRPH GRZQ WR D ILQGLQJ WKDW VR ORQJ DV FRXQVHO LV 7KDWLVQRWWRVD\WKDWDGHIHQVHFRXQVHOjVGHFLVLRQQRWWR SK\VLFDOO\ SUHVHQW GXULQJ WULDO DQG FRQVFLRXV LQHIIHFWLYH FURVVH[DPLQHDZLWQHVVZLOOLQHYHU\FDVHULVHWRWKHOHYHORI DVVLVWDQFHRIFRXQVHOSHUVHFDQQRWEHIRXQGl'LVVHQW2S DSUHVXPSWLRQRILQHIIHFWLYHQHVV+RZHYHUWKHIDLOXUHWRGR DW VRLQWKLVFDVHGRHVUDLVHDSUHVXPSWLRQRISUHMXGLFHZKHUH 3HWLWLRQHU ZDV RQ WULDO IRU ILUVWGHJUHH PXUGHU )UHHPDQjV :HDOVREHOLHYHWKDWWKHGLVVHQWjVHPSKDVLVRQWKHLQKHUHQW WHVWLPRQ\ FRQVWLWXWHG DQ DGPLVVLRQ WR WKH NLOOLQJ E\ XQUHOLDELOLW\RIH\HZLWQHVVWHVWLPRQ\LVPLVSODFHGJLYHQWKH 3HWLWLRQHU0RGHOVNLIDLOHGWRLQWHUYLHZ)UHHPDQDQGZKHUH IDFWVRIWKHSUHVHQWFDVH7KHSULPDU\FRQFHUQH[SUHVVHGLQ )UHHPDQjV WHVWLPRQ\ PD\ KDYH EHHQ GLVFUHGLWHG WKURXJK FDVHVGLVFXVVLQJWKHSUREOHPVZLWKH\HZLWQHVVLGHQWLILFDWLRQ HIIHFWLYHFURVVH[DPLQDWLRQ)RUH[DPSOHWKURXJKHIIHFWLYH UHODWHVWRDZLWQHVVREVHUYLQJDQGVXEVHTXHQWO\LGHQWLI\LQJD FURVVH[DPLQDWLRQ0RGHOVNLPD\KDYHGLVFUHGLWHG)UHHPDQjV VWUDQJHU0DQVRQY%UDWKZDLWH86 WHVWLPRQ\E\VKRZLQJWKHGLVWDQFHIURPZKLFK)UHHPDQZDV GLVFXVVLQJ SUHYLRXV 6XSUHPH &RXUW FDVHV IRFXVLQJ RQ WKH IURPWKHFULPHVFHQHWKHWLPHRIGD\DQGQRLVHOHYHOLQWKH ULVNVRIH\HZLWQHVVLGHQWLILFDWLRQQRWLQJWKDWm>X@VXDOO\WKH FRPPXQLW\RUKRZ)UHHPDQPD\KDYHEHHQFRQIXVHGE\WKH ZLWQHVVPXVWWHVWLI\DERXWDQHQFRXQWHUZLWKDWRWDOVWUDQJHU JRLQJVRQVXFKWKDWLWPD\KDYHEHHQ7KRPDVZKRPDGHWKH XQGHU FLUFXPVWDQFHV RI HPHUJHQF\ RU HPRWLRQDO VWUHVVl LQFULPLQDWLQJVWDWHPHQWSDUWLFXODUO\VLQFH)UHHPDQKDGEHHQ 8QLWHG6WDWHVY:DGH86QRWLQJWKDW GULQNLQJDQG7KRPDVZDVIOHHLQJZLWK3HWLWLRQHU$ORQJWKLV sXVWLFH)UDQNIXUWHURQFHUHPDUNHGWKDWm>W@KHLGHQWLILFDWLRQRI OLQHLI0RGHOVNLKDGLQWHUYLHZHG)UHHPDQVKHPD\KDYHEHHQ VWUDQJHUVLVSURYHUELDOO\XQWUXVWZRUWK\lsDFNVRQY)RJJ DEOHWRXQFRYHURWKHUYDOXDEOHLQIRUPDWLRQWRFDVWGRXEWXSRQ )GG&LUm&HQWXULHVRIH[SHULHQFHLQ KLVYHU\GDPDJLQJWHVWLPRQ\)RUH[DPSOH)UHHPDQPD\LQ WKH DGPLQLVWUDWLRQ RI FULPLQDO MXVWLFH KDYH VKRZQ WKDW IDFW EH KHDULQJ LPSDLUHG EXW EHFDXVH 0RGHOVNL IDLOHG WR FRQYLFWLRQV EDVHG VROHO\ RQ WHVWLPRQ\ WKDW LGHQWLILHV D FRQGXFW DQ LQYHVWLJDWLRQ LQWR )UHHPDQjV WHVWLPRQ\ IRU WKH GHIHQGDQW SUHYLRXVO\ XQNQRZQ WR WKH ZLWQHVV >DUH@ KLJKO\ SXUSRVHRIFURVVH[DPLQDWLRQWKDWRUDQ\RWKHUGLVFUHGLWLQJ VXVSHFWl7KHSUHVHQWFDVHGRHVQRWSUHVHQWVXFKDVLWXDWLRQ IDFWZDVQRWPDGHNQRZQWRWKHMXU\3HWLWLRQHUWKHUHIRUH 3XUGLH WKH ZLWQHVV ZKR WHVWLILHG WKDW VKH REVHUYHG 0RVV ZDV GHQLHG KLV ULJKW WR HIIHFWLYH FURVVH[DPLQDWLRQ E\ VKRRW0DQOH\VDZKLPRQDGDLO\EDVLVDVDSHUVRQ LQWKH FRXQVHOjVLQDFWLRQVWKHUHE\JLYLQJULVHWRDSUHVXPSWLRQRI QHLJKERUKRRG  7KLV FDVH LV VLPSO\ QRW WKH mVWUDQJHU ZKR SUHMXGLFH MXPSVRXWRIWKHGLPO\OLWDOOH\lVLWXDWLRQWKDWZRXOGUDLVH UHDVRQDEOHGRXEWVDERXW3XUGLHjVSHUFHSWLRQ 7KH PDMRULW\ GLVDJUHHV ZLWK WKH ILQGLQJ WKDW 0RGHOVNLjV IDLOXUHWRFURVVH[DPLQHHLWKHURIWKHVHNH\ZLWQHVVHVIRUWKH )LQDOO\ DOWKRXJK WKH GLVVHQW PDLQWDLQV WKDW LW GRHV QRW SURVHFXWLRQJLYHVULVHWRDSUHVXPSWLRQRISUHMXGLFHFODLPLQJ DGYRFDWHILQGLQJSUHMXGLFHSHUVHLQHYHU\FDVHZKHUHGHIHQVH WKDWWKHILQGLQJLVEDVHGRQmVXSSRVLWLRQlRUmVSHFXODWLRQl FRXQVHO UHOLHV XSRQ WKH FURVVH[DPLQDWLRQ FRQGXFWHG E\ WKDW WKH FURVVH[DPLQDWLRQ ZRXOG KDYH SURYHQ EHQHILFLDO FRXQVHO IRU D FRGHIHQGDQW ZH EHOLHYH WKDW ZRXOG EH WKH +RZHYHU WKH PDMRULW\ PLVVHV WKH SRLQW EHKLQG SUHVXPLQJ SUDFWLFDOHIIHFWRILWVDQDO\VLVZKHQHYHUDNH\VWDWHZLWQHVV SUHMXGLFH LQ D FULPLQDO FDVH  ,W LV WKH YHU\ XQFHUWDLQW\ RU WDNHVWKHVWDQG:HGRQRWEHOLHYHWKLVWREHWKHFXUUHQWVWDWH mVSHFXODWLRQlLI\RXZLOODVWRWKHGHJUHHRISUHMXGLFHJOHDQHG RIWKHODZDVGHFODUHGE\HLWKHUWKH6XSUHPH&RXUWRUE\WKH  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  SULRUGHFLVLRQVRIWKLVFRXUW&RPSDUH*UHHQ)GDW WULDODVRSSRVHGWRKHULQDFWLRQV)RUH[DPSOHLQILQGLQJWKDW  DSSO\LQJ&URQLFjV UXOH RI SHU VH SUHMXGLFH LQ D FDVH DSUHVXPSWLRQRISUHMXGLFHLVQRWZDUUDQWHGLQWKLVFDVHWKH ZKHUHGHIHQVHFRXQVHODIWHUEHLQJSK\VLFDOO\DEVHQWIURPWKH PDMRULW\QRWHVVHYHUDODFWLRQVWDNHQE\0RGHOVNLSULRUWRWULDO FRXUWURRPGXULQJWKHFURVVH[DPLQDWLRQRIDNH\JRYHUQPHQW VXFK DV DWWHQGLQJ WKH SUHOLPLQDU\ H[DPLQDWLRQ DQG ZLWQHVVUHOLHGVROHO\XSRQWKHFURVVH[DPLQDWLRQFRQGXFWHG HQFRXUDJLQJ3HWLWLRQHUWRDFFHSWWKHJRYHUQPHQWjVJXLOW\SOHD E\FRGHIHQGDQWjVFRXQVHOZLWK*URVHFORVHY%HOO)G 0RGHOVNLjVFRQVWUXFWLYHDEVHQFHDWWKHSUHOLPLQDU\SKDVHRI   WK &LU  UHFRJQL]LQJ WKDW &URQLFjV WKHFULPLQDOSURFHHGLQJVKRZHYHULVQRWDWLVVXH$QGLQ LUUHEXWWDEOHSUHVXPSWLRQRISUHMXGLFHPLJKWEHDSSURSULDWH DQ\ HYHQWLWKDVEHHQIRXQGWKDWDKDUPOHVVHUURUDQDO\VLV EXW GHFLGLQJ WR DSSO\ WKH FDVHE\FDVH HYDOXDWLRQ XQGHU VKRXOGEHDSSOLHGZKHQFRQVLGHULQJFRXQVHOjVDEVHQFHDWWKH 6WULFNODQG GHVSLWH WKH IDFW WKDW FRXQVHO ODFNHG DQ\ WULDO SUHOLPLQDU\ KHDULQJ VWDJH RI WKH SURFHHGLQJV  6HH HJ VWUDWHJ\IDLOHGWRFRQGXFWDPHDQLQJIXODGYHUVDULDOFKDOOHQJH &ROHPDQY$ODEDPD867DNDFVY DQGUHOLHGXSRQGHFLVLRQVPDGHE\WKHFRGHIHQGDQWjVFRXQVHO (QJOH)GWK&LU0F.HOGLQY5RVH LQDFDVHZKHUHWKHGHIHQGDQWVKDGDQWDJRQLVWLFGHIHQVHVVHH )GWK&LUSHUFXULDP7KHPDMRULW\ DOVR :DUQHU Y )RUG  )G   WK &LU  DOVR PDNHV QRWH RI WKH IDFW WKDW GXULQJ WULDO 0RGHOVNL m6LOHQFHFDQFRQVWLWXWHWULDOVWUDWHJ\:KHWKHUWKDWVWUDWHJ\ mUHVHUYHG KHU ULJKW WR PDNH DQ RSHQLQJ VWDWHPHQW FURVV LV VR GHIHFWLYH DV WR QHJDWH WKH QHHG IRU D VKRZLQJ RI H[DPLQHGZLWQHVVHVDQGPDGHDFORVLQJDUJXPHQWl2QFH SUHMXGLFHWRHVWDEOLVKLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOPXVW DJDLQKRZHYHUWKHPDMRULW\PLVVHVWKHPDUNLQDVPXFKDVLW EHMXGJHGRQDFDVHE\FDVHEDVLVl LV 0RGHOVNLjV LQDFWLRQV DW WULDO RU PRUH VSHFLILFDOO\ KHU LQDFWLRQVGXULQJDFULWLFDOVWDJHRIWKHWULDOWKDWJLYHULVHWRD 0RVVDUJXHVWKDWKLVFRXQVHOSURYLGHGLQHIIHFWLYHDVVLVWDQFH SUHVXPSWLRQRISUHMXGLFH6HH&URQLF86DW EHFDXVHVKHIDLOHGWRPDNHDQRSHQLQJVWDWHPHQWWRFURVV H[DPLQH)UHHPDQDQG3XUGLHWRSXUVXHDWKHRU\WKDW7KRPDV ,Q WKLV UHJDUG 0RGHOVNL IDLOHG WR FURVVH[DPLQH sDPHV ZDVWKHVROHVKRRWHUWRFDOODQ\GHIHQVHZLWQHVVHVWRPDNH )UHHPDQ DQG 1LFROH 3XUGLH ERWK NH\ ZLWQHVVHV IRU WKH DQ\ REMHFWLRQV RU WR SUHVHQW D VWURQJHU FORVLQJ DUJXPHQW SURVHFXWLRQ  $FFRUGLQJ WR 0RGHOVNLjV WHVWLPRQ\ DW WKH (DFK RI WKHVH FODLPV LV DGGUHVVHG EHORZ SXUVXDQW WR HYLGHQWLDU\KHDULQJDOWKRXJKKHUWULDOVWUDWHJ\ZDVEDVHGRQ 6WULFNODQGjVUHTXLUHPHQWV UDLVLQJDUHDVRQDEOHGRXEWDVWRWKHFUHGLELOLW\RIWKHVHNH\ ZLWQHVVHVVKHPDGHDGHOLEHUDWHFKRLFHQRWWRFURVVH[DPLQH  &RXQVHOjVIDLOXUHWRPDNHDQRSHQLQJVWDWHPHQW HLWKHURIWKHP+HUDOOHJHGEDVLVIRUKHUGHFLVLRQQRWWRFURVV H[DPLQH)UHHPDQZDVWKDWKLVWHVWLPRQ\oWKDWKHRYHUKHDUG 0RVVILUVWFRQWHQGVWKDWKLVFRXQVHOjVIDLOXUHWRPDNHDQ 3HWLWLRQHUFRQIHVVWRNLOOLQJDPDQDV3HWLWLRQHUIOHGIURPWKH RSHQLQJ VWDWHPHQW ZDV ERWK REMHFWLYHO\ XQUHDVRQDEOH DQG VFHQH o ZDV LQKHUHQWO\ XQEHOLHYDEOH DQG WKDW DQ\ FURVV SUHMXGLFLDO$OWKRXJK0RGHOVNLUHVHUYHGKHUULJKWWRPDNHDQ H[DPLQDWLRQ ZRXOG KDYH GUDZQ DGGLWLRQDO DWWHQWLRQ WR WKH RSHQLQJ VWDWHPHQW VKH QHYHU H[HUFLVHG WKLV ULJKW WHVWLPRQ\  0RGHOVNLjV GHFLVLRQ QRW WR FURVVH[DPLQH )XUWKHUPRUH0RGHOVNLWHVWLILHGWKDWVKHFRXOGQRWUHPHPEHU )UHHPDQFRQVWUXFWLYHO\GHQLHG3HWLWLRQHUKLVULJKWWRFRXQVHO ZKHWKHUVKHKDGPDGHDQRSHQLQJVWDWHPHQWEXWWKDWLWZRXOG DWDFULWLFDOVWDJHLQWKHSURFHHGLQJVDQGmIDLO>HG@WRVXEMHFW EHXQXVXDOIRUKHUQRWWRGRVR WKHSURVHFXWLRQjVFDVHWRPHDQLQJIXODGYHUVDULDOWHVWLQJl &URQLF  86 DW   ,QGHHG DV WKH 6XSUHPH &RXUW $ WULDO FRXQVHOjV IDLOXUH WR PDNH DQ RSHQLQJ VWDWHPHQW RSLQHGm>Q@RVSHFLILFVKRZLQJRISUHMXGLFHZDVUHTXLUHGLQ KRZHYHU GRHV QRW DXWRPDWLFDOO\ HVWDEOLVK WKH LQHIIHFWLYH 'DYLVY$ODVND86EHFDXVHWKHSHWLWLRQHU DVVLVWDQFHRIFRXQVHO8QLWHG6WDWHVY+DGGRFN)G KDG EHHQ GHQLHG WKH ULJKW RI HIIHFWLYH FURVVH[DPLQDWLRQ WK&LUKROGLQJWKDWGHIHQVHFRXQVHOjVGHFLVLRQ  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  BBBBBBBBBBBBBBB QRWWRSUHVHQWDQRSHQLQJVWDWHPHQWEHFDXVHKHGLGQRWNQRZ ZKDW +DGGRFN ZRXOG VD\ RQ WKH ZLWQHVV VWDQG ZDV QRW ',66(17 FRQVWLWXWLRQDOO\ GHILFLHQW SHUIRUPDQFH 8QLWHG 6WDWHV Y BBBBBBBBBBBBBBB 5RGULJXH]5DPLUH])GWK&LUm7KH WLPLQJ RI DQ RSHQLQJ VWDWHPHQW DQG HYHQ WKH GHFLVLRQ &/$ G@HIHQVH FRXQVHOjV  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  IDLOXUHWRPDNHDQRSHQLQJVWDWHPHQWZDVQRWKLQJPRUHWKDQ FRQVWLWXWHVWKHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO1RUGRHVWKH DWDFWLFDOGHFLVLRQWKDWGLGQRWDGYHUVHO\DIIHFW1JX\HQl:H EUHYLW\ RI 0RGHOVNLjV FORVLQJ DUJXPHQW ZKLFK 0RVV DOVR WKHUHIRUHFRQFOXGHWKDW0RGHOVNLjVIDLOXUHWRPDNHDQRSHQLQJ FKDOOHQJHVHVWDEOLVKFRQVWLWXWLRQDOO\GHILFLHQWSHUIRUPDQFH VWDWHPHQW GLG QRW FRQVWLWXWH D FRQVWLWXWLRQDOO\ GHILFLHQW )LQDOO\XQOLNHWKHIDFWVLQ*URVHFORVHWKHVWDWHjVHYLGHQFH SHUIRUPDQFH DJDLQVW0RVVZDVTXLWHVWURQJLQOLJKWRIWKHWHVWLPRQ\RIWKH WZRH\HZLWQHVVHV  &RXQVHOjVIDLOXUHWRFURVVH[DPLQHNH\ZLWQHVVHV 0RVV KDV WKXV IDLOHG WR GHPRQVWUDWH WKDW KLV FRXQVHOjV $V WKH VHFRQG EDVLV IRU KLV LQHIIHFWLYHDVVLVWDQFHRI SHUIRUPDQFHLQWKHVHUHVSHFWVZDVREMHFWLYHO\XQUHDVRQDEOH FRXQVHOFODLP0RVVIRFXVHVRQKLVFRXQVHOjVIDLOXUHWRFURVV ,QDGGLWLRQEHFDXVH0RVVjVDOOHJDWLRQVDUHFRQFOXVRU\KHLV H[DPLQH)UHHPDQDQG3XUGLH0RVVFRQWHQGVWKDWKLVFRXQVHO XQDEOHWRVKRZDUHDVRQDEOHSUREDELOLW\WKDWWKHUHVXOWRIKLV FRXOG KDYH DWWHPSWHG WR LPSHDFK )UHHPDQjV FUHGLELOLW\ E\ WULDO ZRXOG KDYH EHHQ GLIIHUHQW HYHQ LI KLV FRXQVHO KDG H[SORULQJ WKH SRVVLELOLW\ WKDW )UHHPDQ PLVLGHQWLILHG 0RVV SHUIRUPHGLQVRPHRWKHUPDQQHU:HWKHUHIRUHFRQFOXGHWKDW HPSKDVL]LQJ)UHHPDQj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jV DFFRXQW FRQIOLFWV ZLWK WKH PHGLFDO H[DPLQHUjV WHVWLPRQ\ ZKLFK ZDV LQWURGXFHG DW WKH SUHOLPLQDU\ KHDULQJ WKDW QR HYLGHQFHRIFORVHUDQJHILULQJH[LVWHG0RVVQH[WFODLPVWKDW KLV FRXQVHO FRXOG KDYH FURVVH[DPLQHG 3XUGLH DERXW WKH DFFXUDF\RIKHULGHQWLILFDWLRQRI0RVVJLYHQWKDW0RVVDQG 7KRPDV DOOHJHGO\ UHVHPEOH HDFK RWKHU  )LQDOO\ 0RVV FRQWHQGVWKDWKLVFRXQVHOIDLOHGWRH[SORUH3XUGLHjVSRVVLEOH ELDVEDVHGRQ3XUGLHEHLQJDIULHQGRI0DQOH\EXWRQO\DQ DFTXDLQWDQFHRI0RVV 0RGHOVNLjVWHVWLPRQ\DWWKHHYLGHQWLDU\KHDULQJLQGLFDWHV WKDW KHU GHFLVLRQ QRW WR FURVVH[DPLQH )UHHPDQ ZDV D VWUDWHJLF FKRLFH  6KH FRQVLGHUHG KLV WHVWLPRQ\ WR EH LQKHUHQWO\XQEHOLHYDEOHDQGWKRXJKWWKDWFURVVH[DPLQDWLRQ ZRXOGVLPSO\IRFXVDGGLWLRQDODWWHQWLRQRQ0RVVjVDOOHJHG DGPLVVLRQ$OWKRXJKRWKHUDWWRUQH\VPLJKWKDYHUHDFKHGD GLIIHUHQW FRQFOXVLRQ DERXW WKH YDOXH RI FURVVH[DPLQLQJ )UHHPDQ0RGHOVNLjVGHFLVLRQZDVmZLWKLQWKHZLGHUDQJHRI  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  WKH GHIHQVH FRXQVHOjV SHUIRUPDQFH WKDW PDGH KLV UHDVRQDEOHSURIHVVLRQDODVVLVWDQFHl6WULFNODQG86DW UHSUHVHQWDWLRQREMHFWLYHO\XQUHDVRQDEOH   ,QGHHG KHU VWUDWHJLF FKRLFH LV mYLUWXDOO\ XQFKDOOHQJHDEOHlEHFDXVHVKHPDGHLWDIWHUFRQVLGHULQJWKH  KLV IDLOXUH WR KDYH DQ\ GHIHQVH WKHRU\ ZKDWVRHYHU UHOHYDQW ODZ DQG IDFWV  ,G DW  QRWLQJ WKDW mVWUDWHJLF  KLV IDLOXUH WR FRQGXFW DQ\ PHDQLQJIXO DGYHUVDULDO FKRLFHVPDGHDIWHUWKRURXJKLQYHVWLJDWLRQRIODZDQGIDFWV FKDOOHQJHDVVKRZQE\KLVIDLOXUHWRFURVVH[DPLQHPRUH UHOHYDQWWRSODXVLEOHRSWLRQVDUHYLUWXDOO\XQFKDOOHQJHDEOHl WKDQKDOIRIWKHSURVHFXWLRQjVZLWQHVVHVWRREMHFWWRDQ\ :HWKHUHIRUHFRQFOXGHWKDW0RGHOVNLjVGHFLVLRQQRWWRFURVV HYLGHQFH WR SXW RQ DQ\ GHIHQVH ZLWQHVVHV WR PDNH D H[DPLQH )UHHPDQ GLG QRW FRQVWLWXWH D FRQVWLWXWLRQDOO\ FORVLQJ DUJXPHQW DQG DW VHQWHQFLQJ WR SXW RQ DQ\ GHILFLHQWSHUIRUPDQFH PHDQLQJIXOPLWLJDWLRQHYLGHQFHDQG SHUKDSVPRVW LPSRUWDQWO\KLVDEGLFDWLRQRIKLVFOLHQWjVFDVHWR>KLVFR 7KHGLVVHQWUHDFKHVWKHRSSRVLWHFRQFOXVLRQ,QGRLQJVR GHIHQGDQWjV@FRXQVHO WKH GLVVHQW VSHFXODWHV DV WR SRVVLEOH OLQHV RI FURVV H[DPLQDWLRQ LQFOXGLQJ WKH SRVVLELOLW\ WKDW )UHHPDQ PLJKW ,GDW KDYHKDGKHDULQJSUREOHPV7KHGLVVHQWjVSRVLWLRQWKDWFURVV H[DPLQDWLRQPLJKWKDYHOHGWRDGLIIHUHQWRXWFRPHDWWULDOLV ,Q DGGLWLRQ WR ILQGLQJ WKLV SHUIRUPDQFH GHILFLHQW WKH VLPLODUO\ VSHFXODWLYH EHFDXVH 0RVV GLG QRW SURYLGH DQ\ *URVHFORVH FRXUW FRQFOXGHG WKDW D UHDVRQDEOH SUREDELOLW\ HYLGHQFHWKDW)UHHPDQZRXOGKDYHWHVWLILHGDQ\GLIIHUHQWO\ H[LVWHG WKDW WKH RXWFRPH ZRXOG KDYH EHHQ GLIIHUHQW LI WKH HYHQLI0RGHOVNLKDGFURVVH[DPLQHGKLP:HEHOLHYHWKDW GHIHQGDQWKDGUHFHLYHGHIIHFWLYHUHSUHVHQWDWLRQEHFDXVHm>W@KH WKH GLVVHQWjV UHOLDQFH XSRQ K\SRWKHWLFDOV FRQWUDGLFWV 6WDWHjVHYLGHQFHW\LQJ*URVHFORVHWRWKHSHUSHWUDWRUVRIWKH 6WULFNODQGjV DGPRQLWLRQ DJDLQVW VHFRQGJXHVVLQJ WKH PXUGHUZDVUHODWLYHO\ZHDNl,GDW7KHFRXUWDOVR SHUIRUPDQFH RI FRXQVHO  6WULFNODQG  86 DW  HPSKDVL]HGWKDWLIGHIHQVHFRXQVHOKDGSUHVHQWHGPLWLJDWLQJ msXGLFLDOVFUXWLQ\RIFRXQVHOjVSHUIRUPDQFHPXVWEHKLJKO\ HYLGHQFH DW WKH VHQWHQFLQJ SKDVH RI WKH WULDO D UHDVRQDEOH GHIHUHQWLDO,WLVDOOWRRWHPSWLQJIRUDGHIHQGDQWWRVHFRQG SUREDELOLW\ H[LVWHG WKDW WKH GHDWK VHQWHQFH ZRXOG QRW KDYH JXHVV FRXQVHOjV DVVLVWDQFH DIWHU FRQYLFWLRQ RU DGYHUVH EHHQLPSRVHG,GDW VHQWHQFH DQG LW LV DOO WRR HDV\ IRU D FRXUW H[DPLQLQJ FRXQVHOjV GHIHQVH DIWHU LW KDV SURYHG XQVXFFHVVIXO WR 0RVVFRQWHQGVWKDWOLNHWKHGHIHQVHFRXQVHOLQ*URVHFORVH FRQFOXGH WKDW D SDUWLFXODU DFW RU RPLVVLRQ RI FRXQVHO ZDV KLV FRXQVHO IDLOHG WR FRQGXFW D PHDQLQJIXO DGYHUVDULDO XQUHDVRQDEOH(YHQWKHEHVWFULPLQDOGHIHQVHDWWRUQH\V FKDOOHQJH7KHSUREOHPZLWK0RVVjVDUJXPHQWKRZHYHULV ZRXOG QRW GHIHQG D SDUWLFXODU FOLHQW LQ WKH VDPH ZD\l WKDWKHGRHVQRWLGHQWLI\DQ\ZLWQHVVHVWKDWKLVFRXQVHOVKRXOG 0RUHRYHUZHGLVDJUHHZLWKWKHGLVVHQWjVLPSOLFDWLRQWKDWWKH KDYHFDOOHGRUREMHFWLRQVWKDWVKHVKRXOGKDYHPDGH8QLWHG RQO\ZD\WRGLVFUHGLWDZLWQHVVLVWKURXJKFURVVH[DPLQDWLRQ 6WDWHV Y 0XUUD\  )G   WK &LU  )LQDOO\ZHEHOLHYHWKDWWKHGLVVHQWIDLOVWRWDNHLQWRDFFRXQW UHMHFWLQJWKHGHIHQGDQWjVFODLPWKDWKLVWULDOFRXQVHOSURYLGHG WKHSRWHQWLDOULVNRIKDYLQJWKHGDPDJLQJWHVWLPRQ\UHSHDWHG LQHIIHFWLYH DVVLVWDQFH QRWLQJ WKDW WKH GHIHQGDQW GLG mQRW GXULQJFURVVH[DPLQDWLRQDULVNZKLFKFRXOGHDVLO\RXWZHLJK LGHQWLI\DQ\ZLWQHVVHVWKDWKLVFRXQVHOVKRXOGKDYHFDOOHGWKDW WKH SRVVLELOLW\ RI LGHQWLI\LQJ ZHDNQHVVHV LQ WKH ZLWQHVVjV FRXOG KDYH EHHQ KHOSIXOl  $OWKRXJK 0RVV FRQWHQGV WKDW DFFRXQW 0RGHOVNLjVFORVLQJDUJXPHQWZDVGHILFLHQWEHFDXVHVKHVWDWHG WKDWmWKHUHLVPRUHWKDQUHDVRQDEOHGRXEWlDERXW0RVVjVJXLOW 0RGHOVNLjVGHFLVLRQQRWWRFURVVH[DPLQH3XUGLHSUHVHQWV WKLVVWDWHPHQWZRXOGKDYHUHVXOWHGLQDQDFTXLWWDOIRU0RVVLI DPRUHGLIILFXOWTXHVWLRQ$OWKRXJK0RGHOVNLEHOLHYHGWKDW WKHMXU\KDGEHOLHYHGLW&RQWUDU\WR0RVVjVEHOLHIWKHUHIRUH FURVVH[DPLQDWLRQZDVXQQHFHVVDU\EHFDXVH*RXOGjVFRXQVHO LW GRHV QRW UHSUHVHQW D FRQFHVVLRQ RI 0RVVjV JXLOW WKDW  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  KDG FURVVH[DPLQHG 3XUGLH D VWURQJ OLNHOLKRRG H[LVWV WKDW 0RVVjV WHVWLPRQ\ DW WKH HYLGHQWLDU\ KHDULQJ UDLVHV 0RVVDQG*RXOGZRXOGKDYHEHQHILWWHGIURPGLIIHUHQWWULDO DGGLWLRQDOGRXEWVDERXW7KRPDVjVFUHGLELOLW\$FFRUGLQJWR VWUDWHJLHV,QIDFW3XUGLHWHVWLILHGWKDWVKHGLGQRWVHH*RXOG 0RVV7KRPDVZDVWKHILUVWSHUVRQWRIOHHDQG0RVV*RXOG DWWKHVFHQHRIWKHFULPH*RXOGjVFRXQVHOZRXOGWKHUHIRUH DQG9DXJKWUHPDLQHGDWWKHVFHQHRIWKHFULPHIRUDPLQXWH KDYHKDGQRLQFHQWLYHWRFKDOOHQJH3XUGLHjVFUHGLELOLW\$VD EHIRUHEHJLQQLQJWRUXQ1RRQHHOVHRWKHUWKDQWKHYLFWLP UHVXOW0RGHOVNLjVGHFLVLRQQRWWRFURVVH[DPLQH3XUGLHZDV ZDVSUHVHQWDWWKHVFHQHRIWKHFULPH$VDUHVXOW0RVVjV QRWDUHDVRQDEOHVWUDWHJLFGHFLVLRQHQWLWOHGWRGHIHUHQFH6HH WHVWLPRQ\ FRQIOLFWV ZLWK 7KRPDVjV VWDWHPHQW WKDW DQ *URVHFORVH Y %HOO  )G   WK &LU  XQLGHQWLILHGSHUVRQDFFRPSDQLHG7KRPDVDVKHIOHG FRQFOXGLQJ WKDW GHIHQVH FRXQVHOjV GHFLVLRQ WR GHIHU FRPSOHWHO\ WR FRGHIHQGDQWjV FRXQVHO ZDV GHILFLHQW :H ILQG QR UHDVRQ WR VXEVWLWXWH RXU MXGJPHQW IRU WKH SHUIRUPDQFHJLYHQWKHGHIHQGDQWVjDQWDJRQLVWLFGHIHQVHVDQG FUHGLELOLW\GHWHUPLQDWLRQRIWKHPDJLVWUDWHMXGJHZKRKDGWKH WKHSRRUSHUIRUPDQFHRIWKHODWWHUjVDWWRUQH\ RSSRUWXQLW\ WR REVHUYH 7KRPDVjV WHVWLPRQ\ DQG DVVHVV KLV GHPHDQRURQWKHZLWQHVVVWDQG6HH3HYHOHUY8QLWHG6WDWHV 7KLV GHWHUPLQDWLRQ KRZHYHU GRHV QRW FRPSHO WKH )GWK&LUUHIXVLQJWRVHFRQGJXHVV FRQFOXVLRQ WKDW 0RGHOVNLjV GHFLVLRQ QRW WR FURVVH[DPLQH WKH FUHGLELOLW\ GHWHUPLQDWLRQ RI WKH PDJLVWUDWH MXGJH DQG 3XUGLH FRQVWLWXWHG FRQVWLWXWLRQDOO\ LQHIIHFWLYH DVVLVWDQFH QRWLQJ WKH JHQHUDO UHOXFWDQFH RI WKLV FRXUW mWR VHW DVLGH )LUVWUHJDUGOHVVRIDQ\LQFRQVLVWHQFLHVLQ3XUGLHjVWHVWLPRQ\ FUHGLELOLW\GHWHUPLQDWLRQVPDGHE\WKHWULHURIIDFWZKRKDV FRQFHUQLQJ KHU DELOLW\ WR VHH 0DQOH\ DIWHU KH IHOO WR WKH KDG WKH RSSRUWXQLW\ WR YLHZ WKH ZLWQHVV RQ WKH VWDQG DQG JURXQG VKH XQHTXLYRFDOO\ VWDWHG WKDW VKH FRXOG VHH 0RVV DVVHVVKLVGHPHDQRUl mYHU\FOHDUO\lDQGVKHXQKHVLWDWLQJO\LGHQWLILHG0RVVDVWKH VKRRWHUDWERWKWKHSUHOLPLQDU\KHDULQJDQGDWWULDO0RVVDOVR *LYHQ WKDW 7KRPDV ZRXOG KDYH EHHQ VXEMHFW WR IDLOV WR H[SODLQ ZKDW TXHVWLRQLQJ 3XUGLH DERXW WKH DOOHJHG LPSHDFKPHQWLIKHKDGWHVWLILHGDW0RVVjVWULDODQGWKDWWKH LQFRQVLVWHQFLHVZRXOGKDYHDFFRPSOLVKHG$VWKHPDJLVWUDWH PDJLVWUDWH MXGJH IRXQG 7KRPDV WR ODFN DQ\ FUHGLELOLW\ QR MXGJHQRWHG3XUGLHPLJKWKDYHFODULILHGKHUDFFRXQWDQGKHU UHDVRQDEOHSUREDELOLW\H[LVWVWKDWWKHUHVXOWDWWULDOZRXOGKDYH WHVWLPRQ\ZRXOGDOPRVWFHUWDLQO\KDYHOHGWRUHSHWLWLRQRIWKH EHHQDQ\GLIIHUHQWLI0RVVjVFRXQVHOKDGLQWHUYLHZHG7KRPDV PRVWGDPDJLQJWHVWLPRQ\LQWKHWULDOnWKDW3XUGLHVDZ0RVV SULRU WR WULDO DQG WKHQ FDOOHG KLP DV D ZLWQHVV  :H WKXV VKRRW0DQOH\ FRQFOXGH WKDW 0RVV IDLOHG WR HVWDEOLVK DQ LQHIIHFWLYH DVVLVWDQFHRIFRXQVHOFODLPEDVHGXSRQKLVFRXQVHOjVIDLOLQJ 0RVVjV UHOLDQFH RQ WKH PHGLFDO H[DPLQHUjV WHVWLPRQ\ WR WRLQYHVWLJDWHRUSXUVXHDWKHRU\WKDW7KRPDVZDVWKHVROH H[SRVH LQFRQVLVWHQFLHV LQ 3XUGLHjV WHVWLPRQ\ LV VLPLODUO\ VKRRWHU PLVSODFHG,QDGGLWLRQWRWKHIDFWWKDW0RVVGRHVQRWSUHVHQW DGHILQLWLRQRIFORVHUDQJHILULQJ3XUGLHPLJKWKDYHHDVLO\  0LVFHOODQHRXVDOOHJDWLRQV H[SODLQHG DQ\ GLVFUHSDQF\ EHWZHHQ KHU WHVWLPRQ\ DQG WKH PHGLFDOH[DPLQHUjVUHSRUW)RUWKHVHUHDVRQVIDLOLQJWRFURVV $W YDULRXV SRLQWV LQ KLV EULHIV 0RVV FRQWHQGV WKDW KLV H[DPLQH3XUGLHLQDQDWWHPSWWRH[SRVHWKHLQFRQVLVWHQFLHVLQ FRXQVHOZDVLQHIIHFWLYHEHFDXVHVKHIDLOHGWRFDOODQ\GHIHQVH KHUWHVWLPRQ\GLGQRWHVWDEOLVKmDUHDVRQDEOHSUREDELOLW\WKDW ZLWQHVVHV PDGH QR REMHFWLRQV DQG JDYH D VKRUW FORVLQJ WKHUHVXOWRIWKHSURFHHGLQJZRXOGKDYHEHHQGLIIHUHQWl DUJXPHQW0RVVUHOLHVRQ*URVHFORVHY%HOO)G 6WULFNODQG86DW  WK &LU  WR VXSSRUW KLV SRVLWLRQ  'HVSLWH 0RVVjV DUJXPHQW *URVHFORVH LV GLVWLQJXLVKDEOH IURP WKH SUHVHQWFDVH7KH*URVHFORVHFRXUWLGHQWLILHGWKUHHDVSHFWVRI  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  DVDZLWQHVVEHFDXVH0RVVLVXQDEOHWRVDWLVI\6WULFNODQGjV 7KH VHFRQG OLQH RI TXHVWLRQLQJ WKDW 0RVV FRQWHQGV KLV VHFRQGUHTXLUHPHQWRIHVWDEOLVKLQJSUHMXGLFH2XUFRQFOXVLRQ FRXQVHOVKRXOGKDYHSXUVXHGnDQDWWDFNRQWKHDFFXUDF\RI WKDWQRSUHMXGLFHZRXOGEHVKRZQLVSUHPLVHGRQWKHIDFW 3XUGLHjV LGHQWLILFDWLRQ RI 0RVVnDOVR IDLOV WR HVWDEOLVK D WKDWWKHSURVHFXWRUFRXOGKDYHWKRURXJKO\LPSHDFKHG7KRPDV UHDVRQDEOHSUREDELOLW\RIDGLIIHUHQWRXWFRPH3XUGLHWHVWLILHG ZLWKKLVFRQWUDU\VWDWHPHQWVJLYHQILUVWWRWKHSROLFHDQGODWHU WKDWVKHVDZ0RVVRQDGDLO\EDVLVDQGVKHLGHQWLILHGKLPDW DWKLVJXLOW\SOHDSURFHHGLQJDQGWKHPDJLVWUDWHMXGJHjV WULDO6KHIXUWKHULGHQWLILHGKLPDWWKHSUHOLPLQDU\KHDULQJ GHWHUPLQDWLRQ WKDW 7KRPDVjV WHVWLPRQ\ DW WKH HYLGHQWLDU\ ZKHUHERWK0RVVDQG7KRPDVZHUHSUHVHQW KHDULQJODFNHGFUHGLELOLW\ )LQDOO\ 0RVV FKDOOHQJHV 0RGHOVNLjV IDLOXUH WR FURVV $VZHQRWHGDERYH7KRPDVjVFODLPWKDWKHILUHGDOORIWKH H[DPLQH 3XUGLH UHJDUGLQJ KHU SRVVLEOH ELDV  %XW DV WKH VKRWVGLUHFWO\FRQIOLFWVZLWKWKHVWDWHPHQWVWKDWKHPDGHWRWKH PDJLVWUDWHMXGJHQRWHG SROLFHDQGDWKLVJXLOW\SOHDKHDULQJ7KHSURVHFXWRUZRXOG WKHUHIRUH KDYH EHHQ DEOH WR LPSHDFK 7KRPDV LI KH KDG 3XUG\jV>VLF@DFTXDLQWDQFHZLWKERWKWKHYLFWLPDQG0RVV WHVWLILHGWKDWKHZDVWKHVROHVKRRWHU ZHUHH[SORUHGLQKHUGLUHFWWHVWLPRQ\DQGLQKHUFURVV H[DPLQDWLRQ E\ >*RXOGjV FRXQVHO@  5HSHWLWLRQ RI WKDW 0RUHRYHU WKH PDJLVWUDWH MXGJH ZKR FRQGXFWHG WKH WHVWLPRQ\RQFURVVH[DPLQDWLRQE\0RGHOVNLLVXQOLNHO\ HYLGHQWLDU\KHDULQJIRXQG7KRPDVjVWHVWLPRQ\WREHmWRWDOO\ WRKDYH\LHOGHGHYLGHQFHRIELDV0RVVGRHVQRWRIIHU XQZRUWK\RIEHOLHIl7KHPDJLVWUDWHMXGJHEDVHGWKLVILQGLQJ DQ\IDFWWKDWZDVQRWLQWURGXFHGDWWULDODQGZKLFKZRXOG RQ  WKH LQFRQVLVWHQFLHV LQ 7KRPDVjV WHVWLPRQ\ DW WKH VXJJHVWWKDW3XUG\jV>VLF@WHVWLPRQ\ZDVLQIOXHQFHGE\ HYLGHQWLDU\KHDULQJWKHPXOWLSOHFRQIOLFWLQJDFFRXQWVRI KHUUHODWLRQVKLSZLWKDQ\SHUVRQ0HUHVSHFXODWLRQWKDW 0DQOH\jVVKRRWLQJWKDW7KRPDVKDVJLYHQDQGWKHODFNRI VXFKLQIOXHQFHH[LVWHGLVLQVXIILFLHQWWRZDUUDQWVHULRXV DQ\ UHDVRQ IRU WKH SROLFH RIILFHUV WR SUHVVXUH 7KRPDV LQWR FRQVLGHUDWLRQ DOWHULQJKLVDFFRXQWRIWKHFULPHJLYHQWKDWKLVDOOHJHGLQLWLDO VWDWHPHQWnWKDW KH ILUHG DOO RI WKH EXOOHWV LQ WKH 7KHPDJLVWUDWHMXGJHjVDQDO\VLVWKRURXJKO\DGGUHVVHV0RVVjV JXQnGHPRQVWUDWHG D ZLOOLQJQHVV WR DFFHSW FRPSOHWH FODLP DQG LQGLFDWHV WKDW FURVVH[DPLQLQJ 3XUGLH DERXW KHU UHVSRQVLELOLW\ IRU WKH FULPH  )XUWKHUPRUH WKH PDJLVWUDWH SRWHQWLDOELDVZRXOGQRWKDYHFUHDWHGDUHDVRQDEOHSUREDELOLW\ MXGJHSRLQWHGRXWWKHQXPHURXV GLVFUHSDQFLHVEHWZHHQWKH RIDGLIIHUHQWRXWFRPHLQ0RVVjVWULDO DIILGDYLWWKDW7KRPDVVLJQHGDIWHUWKHWULDODQGKLVHYLGHQWLDU\ KHDULQJ WHVWLPRQ\  ,Q SDUWLFXODU 7KRPDV WHVWLILHG DW WKH ,Q FRQWUDVW WR RXU FRQFOXVLRQ WKH GLVVHQW EHOLHYHV WKDW HYLGHQWLDU\KHDULQJWKDWKHFRXOGQRWUHFDOOZKHUH0RVVZDV 0RGHOVNLjV IDLOXUH WR FURVVH[DPLQH 3XUGLH FRQVWLWXWHG VWDQGLQJDIWHUWKHVKRRWLQJWKDW7KRPDVZDVDFFRPSDQLHGE\ GHILFLHQWSHUIRUPDQFHDQGZDVSUHMXGLFLDOWR0RVV7RWKH DQXQLGHQWLILHGSHUVRQDVKHUDQIURPWKHVFHQHDQGWKDWKH H[WHQWWKDWWKHGLVVHQWUHOLHVXSRQWKHLQKHUHQWXQUHOLDELOLW\RI KDGWROGWKLVSHUVRQRQWKHUXQWKDWKHKDGNLOOHGVRPHRQH H\HZLWQHVVWHVWLPRQ\WRHVWDEOLVKSUHMXGLFHZHKDYHDOUHDG\ 7KRPDVjVDIILGDYLWLQFRQWUDVWLQFOXGHVKLVGHFODUDWLRQWKDW H[SODLQHGZK\ZHGRQRWDJUHHZLWKWKLVUHDVRQLQJ:HDOVR KH VDZ 0RVV VWDQGLQJ LQ VKRFN DW WKH VFHQH RI WKH FULPH GLVDJUHH ZLWK WKH GLVVHQWjV SRVLWLRQ WKDW UHO\LQJ RQ WKH FRQWDLQVQRUHIHUHQFHWRVRPHRQHUXQQLQJIURPWKHVFHQHZLWK WHVWLPRQ\RIWZRH\HZLWQHVVHVDVDQLQGLFDWLRQRIWKHVWUHQJWK KLPDQGIDLOVWRDFNQRZOHGJHPDNLQJDVWDWHPHQWDGPLWWLQJ RI WKH JRYHUQPHQWjV FDVH DJDLQVW 0RVV FRQIOLFWV ZLWK RXU KLVJXLOWDVKHIOHG FRQFOXVLRQWKDWIDLOLQJWRFURVVH[DPLQH3XUGLHZDVKDUPOHVV HUURU,QRXUYLHZWKHSUREOHPZLWKWKHGLVVHQWjVUHDVRQLQJ LV WKDW LW UHOLHV XSRQ VSHFXODWLRQ UHJDUGLQJ WKH SRWHQWLDO EHQHILWV RI FURVVH[DPLQDWLRQ  6XFK SRVVLELOLWLHV GR QRW  0RVVY+RIEDXHU 1R 1R 0RVVY+RIEDXHU  FRQVWLWXWH mD UHDVRQDEOH SUREDELOLW\ WKDW EXW IRU FRXQVHOjV 0RVVjVDUJXPHQWWKDWKLVFRXQVHOVKRXOGKDYHFRQGXFWHGDQ XQSURIHVVLRQDOHUURUVWKHUHVXOWRIWKHSURFHHGLQJZRXOGKDYH LQGHSHQGHQW LQYHVWLJDWLRQ LQWR 7KRPDVjV DFFRXQW RI WKH EHHQGLIIHUHQWl6WULFNODQG86DW VKRRWLQJGRHVQRWDOWHURXUDQDO\VLV$OWKRXJKmFRXQVHOKDV D GXW\ WR PDNH UHDVRQDEOH LQYHVWLJDWLRQV RU WR PDNH D )RU DOO RI WKH UHDVRQV VWDWHG DERYH ZH FRQFOXGH WKDW UHDVRQDEOH GHFLVLRQ WKDW PDNHV SDUWLFXODU LQYHVWLJDWLRQV 0RGHOVNLjV GHFLVLRQ QRW WR FURVVH[DPLQH 3XUGLH GLG QRW XQQHFHVVDU\>@>W@KHUHDVRQDEOHQHVVRIFRXQVHOjVDFWLRQV YLRODWH 0RVVjV 6L[WK $PHQGPHQW ULJKW WR WKH HIIHFWLYH PD\ EH GHWHUPLQHG RU VXEVWDQWLDOO\ LQIOXHQFHG E\ WKH DVVLVWDQFHRIFRXQVHO$QGHYHQLIKLVFRXQVHOjVSHUIRUPDQFH GHIHQGDQWjVRZQVWDWHPHQWVRUDFWLRQVl6WULFNODQG86 ZDV GHILFLHQW 0RVV KDV IDLOHG WR HVWDEOLVK D UHDVRQDEOH DW0RGHOVNLWHVWLILHGWKDW0RVVWROGKHUWKDW*RXOGILUHG SUREDELOLW\ WKDW WKH RXWFRPH RI KLV WULDO ZRXOG KDYH EHHQ WKHJXQDIWHU7KRPDVIOHG$VVXPLQJWKLVWREHWUXH0RVV GLIIHUHQWLI0RGHOVNLKDGFURVVH[DPLQHG3XUGLH FDQQRWQRZFKDOOHQJHKLVFRXQVHOjVIDLOXUHWRSXUVXHDWKHRU\ WKDW7KRPDVILUHGDOORIWKHEXOOHWV,GQRWLQJWKDWmZKHQD  &RXQVHOjV IDLOXUH WR SXUVXH D SDUWLFXODU GHIHQVH GHIHQGDQWKDVJLYHQFRXQVHOUHDVRQWREHOLHYHWKDWSXUVXLQJ WKHRU\ FHUWDLQ LQYHVWLJDWLRQV ZRXOG EH IUXLWOHVV RU HYHQ KDUPIXO FRXQVHOjVIDLOXUHWRSXUVXHWKRVHLQYHVWLJDWLRQVPD\QRWODWHU 0RVVQH[WDUJXHVWKDWKLVFRXQVHOjVIDLOXUHWRLQYHVWLJDWH EHFKDOOHQJHGDVXQUHDVRQDEOHl DQGSXUVXHDWKHRU\WKDW7KRPDVZDVWKHRQO\SHUVRQZKR VKRW0DQOH\FRQVWLWXWHVLQHIIHFWLYHDVVLVWDQFH$FFRUGLQJWR (YHQLIWKHUHFRUGFOHDUO\VXSSRUWHGWKHIDFWWKDW0RVVKDG 0RVVLIKLVFRXQVHOKDGLQWHUYLHZHG7KRPDVFDOOHGKLPDV WROG0RGHOVNLIURPWKHEHJLQQLQJWKDW7KRPDVZDVWKHVROH D ZLWQHVV DQG HOLFLWHG WHVWLPRQ\ WKDW KH ILUHG DOO RI WKH VKRRWHU ZKLFK LW GRHV QRW ZH GRXEW ZKHWKHU WKLV ZRXOG EXOOHWV WKH UHVXOW LQ WKLV FDVH ZRXOG OLNHO\ KDYH EHHQ HVWDEOLVKWKDW0RGHOVNLjVSHUIRUPDQFHZDVFRQVWLWXWLRQDOO\ GLIIHUHQW GHILFLHQW   7KRPDV DIWHU DOO KDG PDGH VWDWHPHQWV WR WKH SROLFHDQGDWKLVJXLOW\SOHDKHDULQJWKDWKHKDGILUHGRQO\WZR 0RVVjV FRQWHQWLRQ RYHUORRNV WKH IDFW WKDW DFFRUGLQJ WR VKRWVDQGWKDWVRPHRQHHOVHDOVRVKRW0DQOH\,WLVWKHUHIRUH 0RGHOVNLVKHKDGQRUHDVRQDWWKHWLPHRIWULDOWREHOLHYHWKDW KLJKO\ XQOLNHO\ WKDW 7KRPDV ZRXOG KDYH JLYHQ D GLIIHUHQW 7KRPDV ZDV WKH VROH VKRRWHU  6KH WHVWLILHG WKDW 0RVV DFFRXQW RI 0DQOH\jV VKRRWLQJ HYHQ LI 0RGHOVNL KDG UHSHDWHGO\WROGKHUWKDW*RXOGKDGILUHGWKHJXQDIWHU7KRPDV LQWHUYLHZHGKLPRUKDGFDOOHGKLPWRWHVWLI\DWWULDO IOHGDQGWKDWVKHGLGQRWUHPHPEHU0RVVLQIRUPLQJKHUWKDW 7KRPDVDOVRVKRW0DQOH\$OWKRXJK0RVV WHVWLILHGDWWKH $GLIIHUHQWDWWRUQH\PLJKWKDYHVHL]HGXSRQWKHH[LVWHQFH HYLGHQWLDU\KHDULQJWKDWKHKDGWROG0RGHOVNLWKDW7KRPDV RIWKLVUHPRWHSRVVLELOLW\LI0RVVKDGLQGHHGFODLPHGDWWKH ILUHGWKHJXQWKLVWHVWLPRQ\GRHVQRWQHFHVVDULO\FRQIOLFWZLWK WLPHWKDWRQO\7KRPDVVKRW0DQOH\0RGHOVNLjVIDLOXUHWRGR 0RGHOVNLjVDFFRXQWRIZKDW0RVVWROGKHU0RVVjVWHVWLPRQ\ VRKRZHYHUPXVWEHHYDOXDWHGXQGHUWKHFLUFXPVWDQFHVVKH DWWKHHYLGHQWLDU\KHDULQJGRHVQRWFOHDUO\HVWDEOLVKWKDWKH IDFHG DQG LQ OLJKW RI KHU WULDO VWUDWHJ\  &RQFOXGLQJ WKDW WROG0RGHOVNLSULRUWRWULDOWKDW7KRPDVZDVWKHVROHVKRRWHU 0RGHOVNLjVSHUIRUPDQFHLQWKLVUHVSHFWZDVGHILFLHQWZRXOG ,WLVFRQFHLYDEOHWKDW0RVVWROG0RGHOVNLWKDWERWK7KRPDV DSSURDFK DQG SHUKDSV FRQVWLWXWH LPSHUPLVVLEOH VHFRQG DQG *RXOG ILUHG WKH JXQ  0RGHOVNLjV WULDO VWUDWHJ\ RI JXHVVLQJRIKHUGHFLVLRQQRWWRLQWHUYLHZ7KRPDV DWWHPSWLQJ WR UDLVH GRXEWV DERXW WKH FLUFXPVWDQFHV RI 0DQOH\jVVKRRWLQJZRXOGEHFRQVLVWHQWZLWKWKLVSRVVLELOLW\ 5HJDUGOHVVRIZKDW0RVVDFWXDOO\WROG0RGHOVNLSULRUWR DQGLWPLJKWH[SODLQZK\VKHGLGQRWUHFDOO0RVVWHOOLQJKHU WULDO KH FDQQRW EDVH KLV LQHIIHFWLYHDVVLVWDQFHRIFRXQVHO WKDW7KRPDVDOVRVKRW0DQOH\ FODLPRQ0RGHOVNLjVIDLOXUHWRLQWHUYLHZ7KRPDVRUFDOOKLP