01a0090p.06

7KH +RQRUDEOH -RKQ * +H\EXUQ ,, 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
81,7(' 67$7(6 2) $0(5,&$
3ODLQWLII$SSHOOHH
Y
5,&+$5' 9$57$1,$1
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
1R²%HUQDUG$)ULHGPDQ'LVWULFW-XGJH
$UJXHG-DQXDU\
'HFLGHGDQG)LOHG0DUFK
%HIRUH'$8*+75(<DQG*,/0$1&LUFXLW-XGJHV
+(<%851'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 6WDFH\ 0 6WXGQLFNL )('(5$/ 38%/,&
'()(1'(56 2)),&( 'HWURLW 0LFKLJDQ IRU $SSHOODQW
.HYLQ.5XVVHOO81,7('67$7(6'(3$570(172)

-- 1 of 6 --

8QLWHG6WDWHVY9DUWDQLDQ 1R
-867,&( &,9,/ ',9,6,21 $33(//$7( 67$))
:DVKLQJWRQ'&IRU$SSHOOHH21%5,()6WDFH\0
6WXGQLFNL )('(5$/ 38%/,& '()(1'(56 2)),&(
'HWURLW0LFKLJDQIRU$SSHOODQW.HYLQ.5XVVHOO-HVVLFD
'XQVD\ 6LOYHU 81,7(' 67$7(6 '(3$570(17 2)
-867,&( &,9,/ ',9,6,21 $33(//$7( 67$))
:DVKLQJWRQ'&IRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
0$57+$ &5$,* '$8*+75(< &LUFXLW -XGJH 7KH
GHIHQGDQW 5LFKDUG 9DUWDQLDQ ZDV FRQYLFWHG XQGHU WZR
VXEVHFWLRQVRI86&†IRULQWHUIHULQJZLWKWKHFLYLO
KRXVLQJ ULJKWV RI WKUHH UHDO HVWDWH DJHQWV DQG DQ $IULFDQ
$PHULFDQ IDPLO\ E\ WKUHDWHQLQJ ERGLO\ LQMXU\ DQG GHDWK
EHFDXVHRIWKHIDPLO\¶VGHFLVLRQWRSXUFKDVHDKRPHLQWKH
GHIHQGDQW¶VSUHYLRXVO\DOOZKLWHQHLJKERUKRRG+DYLQJEHHQ
VHQWHQFHG WR ILYH PRQWKV LQ SULVRQ GD\V RI KRPH
FRQILQHPHQWDQGRQH\HDURIVXSHUYLVHGUHOHDVH9DUWDQLDQ
DSSHDOV WR WKLV FRXUW DOOHJLQJ YLRODWLRQV RI KLV ULJKW WR
FRQIURQWWKHZLWQHVVHVDJDLQVWKLPDQGRIKLVULJKWWREHIUHH
IURPGRXEOHMHRSDUG\+HDOVRDVVHUWVWKDWWKHJRYHUQPHQW
DGGXFHG LQVXIILFLHQW HYLGHQFH WR VXSSRUW RQH RI WKH
FRQYLFWLRQVDUJXLQJWKDWWKHSURRIIDLOHGWRVKRZWKDWDWKUHDW
ZDVGHOLYHUHGGLUHFWO\DJDLQVWWKHKRPHEX\HUV:HILQGQR
UHYHUVLEOHHUURUDQGDIILUP
)$&78$/$1'352&('85$/%$&.*5281'
:KHQ(UQHVWDQG.HPO\Q6WULQJHUGHFLGHGWRSXUFKDVHD
QHZKRPHIRUWKHLUIDPLO\LQWKH'HWURLWVXEXUERI+DUSHU
:RRGVWKH\HQOLVWHGWKHDLGRIUHDOHVWDWHDJHQW6WHYHQ:HLVV
DQGPDGHDQRIIHURQDKRPHDW(DVWZRRGWKDWZDV
DFFHSWHGE\WKHVHOOHUDQGKHUDJHQWV.DWK\DQG0LNH0DUWLQ
$VZLWKPRVWKRPHVDOHVKRZHYHUWKHILQDOSXUFKDVHZDV
PDGHFRQWLQJHQWXSRQWKHEX\HUVUHFHLYLQJDIDYRUDEOHUHSRUW
IURPDFHUWLILHGKRPHLQVSHFWRUSULRUWRWKHVFKHGXOHGFORVLQJ
GDWH+HQFHWKH6WULQJHUVPHWDWWKHKRPHZLWKWKHLQVSHFWRU
1R 8QLWHG6WDWHVY9DUWDQLDQ
GHIHQGDQW¶VFRPPHQWVDVWKUHDWVWRWKHPDQGWKHLUFKLOGUHQ
DQG WKDW 9DUWDQLDQ VKRXOG QRZ EH KHOG OLDEOH IRU WKRVH
IRUHVHHDEOHFRQVHTXHQFHV
,QDILQDOFKDOOHQJHWRWKH OHJLWLPDF\RIKLVFRQYLFWLRQV
9DUWDQLDQVXEPLWVWKDWWKHLQIRUPDWLRQUHWXUQHGDJDLQVWKLP
ZDVPXOWLSOLFLWRXVEHFDXVHLWDOOHJHGLQWZRFRXQWVWKHVDPH
FULPLQDODFWLYLW\$VZHKDYHFRQVLVWHQWO\KHOGKRZHYHU³>D@
GHIHQGDQWPD\EHFKDUJHGZLWKPXOWLSOHRIIHQVHVEDVHGRQWKH
VDPH XQGHUO\LQJ FRQGXFW DV ORQJ DV HDFK RIIHQVH UHTXLUHV
SURRIRIDQHOHPHQWQRWUHTXLUHGE\WKHRWKHU´8QLWHG6WDWHV
Y.HOO\)G WK&LU FHUWGHQLHG6&W
FLWLQJ%ORFNEXUJHUY8QLWHG6WDWHV86
7KRVHSURWHFWLRQVDJDLQVWLPSRVLWLRQRI
GRXEOH SXQLVKPHQW IRU FRPPLVVLRQ RI WKH VDPH DFW DUH
SUHVHQWLQWKLVLQVWDQFHEHFDXVHWKHHOHPHQWVRIWKHFULPHV
SURKLELWHGE\86&† D DQG86&† E
DUH GLVWLQFW HYHQ WKRXJK WKH VDPH WKUHDWHQLQJ FRQGXFW LV
VXIILFLHQWWRVDWLVI\ERWKDOOHJDWLRQV
7KURXJKWKHSURYLVLRQVRI† D &RQJUHVVLQWHQGHGWR
SXQLVKWKUHDWVDQGRWKHUDFWVRILQWLPLGDWLRQLQVLWXDWLRQVLQ
ZKLFKWKHGHIHQGDQWDFWVDJDLQVWDSDUWLFXODUYLFWLPEHFDXVH
RIWKHYLFWLP¶VUDFHDQGLQZKLFKWKHYLFWLPLVLQWKHSURFHVV
RIEX\LQJVHOOLQJRUOHDVLQJDKRPH,QFRQWUDVWWRSURYHD
YLRODWLRQRI† E WKHJRYHUQPHQWQHHGSURYHRQO\
WKDWWKHLQWHQGHGYLFWLPRIWKDWFULPHZDVRIIHULQJKRXVLQJ
VHUYLFHV ZLWKRXW GLVFULPLQDWLRQ 8QOLNH WKH VLWXDWLRQ
LQYROYHGLQD† D YLRODWLRQWKHYLFWLPLQD† E
FDVHQHHGQRWEHFKRVHQEHFDXVHRIKLVRUKHUUDFHDQGQHHG
QRWEHSHUVRQDOO\LQWKHPDUNHWWREX\VHOORUOHDVHDKRPH
&RQVHTXHQWO\WKHWZRSURYLVLRQVDGGUHVVVHSDUDWHHYLOVDQG
PD\ EH SXQLVKHG VHSDUDWHO\ DV ORQJ DV WKH GHIHQGDQW
FRPPXQLFDWHVDQLQWHQWLRQWRWKUHDWHQERWKVHWVRIYLFWLPVIRU
WKHSURVFULEHGUHDVRQV
)RUWKHUHDVRQVVHWRXWDERYHZH$)),50WKHMXGJPHQWRI
WKHGLVWULFWFRXUW

-- 2 of 6 --

8QLWHG6WDWHVY9DUWDQLDQ 1R
.HPO\Q 6WULQJHU WHVWLILHG DW WULDO WKDW DIWHU PRYLQJ LQWR WKH
GHIHQGDQW¶V QHLJKERUKRRG WKH 6WULQJHUV DOWHUHG WKHLU OLIHVW\OHV WR SURWHFW
WKHPVHOYHV DQG WKHLU FKLOGUHQ IURP IXUWKHU YLROHQFH IURP 9DUWDQLDQ RU
IURP RWKHU VHOIGHVFULEHG ELJRWHG QHLJKERUV 3DUWLFXODUO\ 0V 6WULQJHU
VWDWHG
>7@KH FKLOGUHQ ZHUH DOORZHG WR ULGH WKHLU ELNHV RQO\ LQ WKH EDFN
\DUG LQ WKH IURQW \DUG ZKHQ P\ KXVEDQG RU , ZHUH RXW 7KH\
ZHUH QRW DOORZHG WR RSHQ WKH GRRUV DW DOO $OVR ZH UHDUUDQJHG
WKH IXUQLWXUH :H SXW WKH IXUQLWXUH VR LW ZDVQ¶W LQ IURQW RI WKH
ZLQGRZ :H KDYH D ELJ JODVV ZLQGRZ LQ WKH IURQW DQG ZH PDGH
VXUH WKH FRXFK ZDV QRW GLUHFWO\ LQ IURQW RI WKDW ZLQGRZ WR EH
VXUH LI D EULFN RU JXQVKRWV RU VRPHWKLQJ WKDW FDPH LQWR WKH
ZLQGRZ LW ZRXOGQ¶W KLW DQ\ERG\
OLJKWPRVWIDYRUDEOHWRWKHSURVHFXWLRQLQILQGLQJDOOHOHPHQWV
RI WKH FULPH EH\RQG D UHDVRQDEOH GRXEW 6HH -DFNVRQ Y
9LUJLQLD 86 :H ILQG QR OHJDO
LQVXIILFLHQF\RQWKLVUHFRUG
*LYHQWKHGHIHQGDQW¶VFRPPHQWVWKDWKHZRXOGQRWKDYH
LQYHVWHGPRQH\LQDSRROLQKLV\DUGKDGKHNQRZQWKDWDQ
$IULFDQ$PHULFDQ IDPLO\ ZDV PRYLQJ LQ DFURVV WKH VWUHHW
IURPKLVSURSHUW\DUDWLRQDOWULHURIIDFWFRXOGFRQFOXGHWKDW
9DUWDQLDQ¶VDQJHUDQGWKUHDWVZHUHGLUHFWHGQRWRQO\WRWKH
UHDOHVWDWHDJHQWVIRUWKHLUSUDFWLFHRIDVVLVWLQJDOOTXDOLILHG
EX\HUVLQILQGLQJVXLWDEOHKRXVLQJEXWDOVRWRWKHSDUWLFXODU
LQGLYLGXDOVLQQRFHQWO\VHHNLQJQHZKRXVLQJIRUWKHLUIDPLO\
0RUHRYHUJLYHQWKHYLFLRXVQHVVRIWKHFRPPXQLFDWHGWKUHDWV
WKHMXU\ZDVMXVWLILHGLQLQIHUULQJWKDWWKHGHIHQGDQWNQHZRU
VKRXOGKDYHNQRZQWKDWDUHDVRQDEOHDJHQWZRXOGUHOD\WKH
WHQRURIWKRVHFRPPHQWVLIQRWWKHFRPPHQWVWKHPVHOYHVWR
WKH SURVSHFWLYH SXUFKDVHUV DQG WKDW VXFK FRPPXQLFDWLRQ
ZRXOGQDWXUDOO\DOVRSODFHWKHSXUFKDVHUVLQIHDURIWKHLUOLYHV
DQGVDIHW\,QIDFWDVDUHVXOWRI9DUWDQLDQ¶VFRPPHQWVWKH
6WULQJHUVMXVWLILDEO\IHOWFRPSHOOHGWRWDNHVSHFLDOSUHFDXWLRQV
WRHQVXUHWKHZHOOEHLQJRIWKHLUIDPLO\PHPEHUV,WLVQRW
XQUHDVRQDEOHIRUDMXU\WRFRQFOXGHWKDW9DUWDQLDQZDVRU
VKRXOGKDYHEHHQDZDUHWKDWVXFKGHIHQVLYHDFWLRQVZHUHEXW
QDWXUDO UHDFWLRQV IORZLQJ IURP FRPPHQWV PDGH WR WKLUG
SDUWLHV WKDW WKH 6WULQJHUV UHDVRQDEO\ FRQVWUXHG WKH
1R 8QLWHG6WDWHVY9DUWDQLDQ
:HLVVDQGWKH0DUWLQVIRUWKHH[DPLQDWLRQRIWKHSURSHUW\
DQG VWUXFWXUH $IWHU UHFHLYLQJ ZRUG RI WKH LQVSHFWRU¶V
DSSURYDOWKHLQVSHFWRUDQGWKH6WULQJHUVOHIWWKHDUHDDQGWKH
WKUHHUHDOHVWDWHDJHQWVUHPDLQHGWRORFNXSWKHKRXVHDQG
FRQJUDWXODWHHDFKRWKHURQWKHFRQVXPPDWLRQRIWKHVDOH
$V WKH\ VWRRG WDONLQJ LQ WKH GULYHZD\ RI WKH KRPH WKH
VHOOHU¶VQH[WGRRUQHLJKERUVWKH'H&UDHQHVZDONHGKXUULHGO\
WRWKHDJHQWVDQGDQLPDWHGO\H[SODLQHGKRZWKHUHDOHVWDWH
SURIHVVLRQDOVKDGUXLQHGWKH'H&UDHQHV¶OLYHVE\IDFLOLWDWLQJ
WKH VDOH RI WKH SURSHUW\ WR DQ $IULFDQ$PHULFDQ IDPLO\
$OWKRXJK WKH FRQYHUVDWLRQ LQLWLDWHG E\ WKH 'H&UDHQHV ZDV
TXLWHFOHDUO\UDFLDOO\FKDUJHGZLWQHVVHVWRWKHGLVFXVVLRQGLG
QRW UHFDOO KHDULQJ WKUHDWV RI DQ\ NLQG DUWLFXODWHG E\ WKRVH
QHLJKERUV
:LWKLQPLQXWHVKRZHYHUWKHGHIHQGDQWZKRRZQHGWKH
SURSHUW\DFURVVWKHVWUHHWIURPWKHVHOOHUUDQDFURVVWKHURDG
DQG EHJDQ UDQWLQJ DW WKH DJHQWV DVVHPEOHG WKHUH +H
H[FODLPHG WKDW KH ZRXOG QRW KDYH LQYHVWHG LQ D
VZLPPLQJSRROLQKLV\DUGKDGKHNQRZQ$IULFDQ$PHULFDQV
ZRXOG PRYH LQ DFURVV WKH VWUHHW DQG WKHQ EDFNHG .DWK\
0DUWLQXSLQWRKHUYHKLFOHDOOWKHZKLOHVSHZLQJLQYHFWLYH
7KH GHIHQGDQW DOVR WROG .DWK\ 0DUWLQ WKDW KH DQG KLV
QHLJKERUVZRXOGER\FRWWWKH0DUWLQV¶UHDOHVWDWHDJHQF\WKDW
KHKDGDIULHQGZKRZDVDSROLFHRIILFHUZKRFRXOGWUDFHWKH
DJHQWVIURPWKHLUYHKLFOH¶VOLFHQVHSODWHQXPEHUDQGWKDWKH
9DUWDQLDQ ZRXOGILQGWKH0DUWLQVGHVWUR\WKHLUFDUFKRS
WKHPLQWROLWWOHSLHFHVDQGEXU\WKHPLQWKHEDFN\DUGZKHUH
QRERG\ZRXOGHYHUILQGWKHP0U'H&UDHQHFRUURERUDWHG
WKHDFFRXQWJLYHQE\WKHUHDOHVWDWHDJHQWVDQGUHODWHGWKDW
9DUWDQLDQ³VDLGWKDWKHFRXOGFXWWKHVHSHRSOHLQSLHFHVRU
VRPHWKLQJ´
%HIRUH WKH VLWXDWLRQ HVFDODWHG IXUWKHU WKH 0DUWLQV DQG
:HLVVOHIWWKHDUHDRQO\WRUHDVVHPEOHODWHUWKDWHYHQLQJDW
WKH ORFDO SROLFH VWDWLRQ WR UHSRUW WKH LQFLGHQW 7KH SROLFH
RIILFLDODVVLJQHGWRWKHFDVHFRQWDFWHG9DUWDQLDQDQGDUUDQJHG
WRLQWHUYLHZKLPWKHIROORZLQJPRUQLQJ$WWKDWWLPHWKH
GHIHQGDQWDWWHPSWHGWRFDVWKLVDFWLRQVLQDQLQQRFHQWOLJKW

-- 3 of 6 --

8QLWHG6WDWHVY9DUWDQLDQ 1R
'HVSLWH FRQFHGLQJ WKDW KH KDG FRSLHG GRZQ WKH 0DUWLQV¶
OLFHQVHSODWHQXPEHULQRUGHUWRKDYHDIULHQGRQWKH'HWURLW
SROLFH IRUFH ³UXQ D FKHFN´ RQ WKH FDU 9DUWDQLDQ GHQLHG
WKUHDWHQLQJWKHDJHQWV,QVWHDGKHFODLPHGRQO\WKDWKHKDG
VWDWHG³,¶PJRLQJWREX\DKRXVHQHDU\RXUKRXVHDQGUHQWLW
WREODFNV6HHKRZ\RXUQHLJKERUVOLNHLW7KH\ZLOOSUREDEO\
FXW\RXXSLQWROLWWOHSLHFHVDQGEXU\\RXLQWKHEDFN\DUG´
6KRUWO\DIWHUWKHGHIHQGDQW¶VDOWHUFDWLRQZLWKWKHUHDOHVWDWH
DJHQWV:HLVVFRQWDFWHGWKH6WULQJHUVDQGUHTXHVWHGDPHHWLQJ
ZLWK WKHP ZLWKRXW WKH 6WULQJHUV¶ FKLOGUHQ SUHVHQW $W WKDW
PHHWLQJKHLQIRUPHGWKHPRIWKHWKUHDWVXWWHUHGE\9DUWDQLDQ
DQGYROXQWHHUHGWRUHWXUQWKHFRXSOH¶VHDUQHVWPRQH\LIWKH\
FKRVH WR UHVFLQG WKHLU SXUFKDVH RIIHU 7KH 6WULQJHUV
QHYHUWKHOHVVGHFLGHGWRJRWKURXJKZLWKWKHSXUFKDVHRIWKH
KRPHEXWWKH\NHSWVWULFWZDWFKRYHUWKHLUFKLOGUHQVRDVWR
SURWHFW WKHP IURP SRVVLEOH DWWDFNV RU PLVFKLHI IURP WKHLU
QHLJKERUV
(YHQWXDOO\:HLVVDQGWKH6WULQJHUVILOHGDFLYLOVXLWDJDLQVW
9DUWDQLDQDOOHJLQJYLRODWLRQVRIWKHKRXVLQJSURYLVLRQVRI
0LFKLJDQ¶V (OOLRWW/DUVHQ &LYLO 5LJKWV $FW 0&/$
†† 7KLV OLWLJDWLRQ HYHQWXDOO\ UHVXOWHG LQ D
MXGJPHQWDQGDVXEVWDQWLDOPRQHWDU\DZDUGLQIDYRURIWKH
SODLQWLIIV 6LPXOWDQHRXVO\ ZLWK WKH XQIROGLQJ RI WKH FLYLO
SURFHHGLQJV WKH IHGHUDO JUDQG MXU\ UHWXUQHG DQ LQGLFWPHQW
DJDLQVWWKHGHIHQGDQWFKDUJLQJKLPZLWKRQHFRXQWRIXVLQJ
³IRUFHDQGWKUHDWRIIRUFH>WR@LQWLPLGDWH>WKHUHDOHVWDWH
DJHQWV@´ DQG LQ D VHFRQG FRXQW ZLWK ³LQWLPLGDW>LQJ@ DQG
LQWHUIHU>LQJ@ZLWKDQ$IULFDQ$PHULFDQIDPLO\ZLWKUHJDUGWR
WKHLURSSRUWXQLW\WRSXUFKDVH´WKHKRXVHLQ+DUSHU:RRGV
E\³IRUFHDQGWKUHDWRIIRUFH´DJDLQVWWKHDJHQWV:KHQWKDW
LQGLFWPHQW ZDV ODWHU GLVPLVVHG GXH WR LUUHJXODULWLHV LQ WKH
VHOHFWLRQ RI JUDQG MXU\ PHPEHUV LQ WKH (DVWHUQ 'LVWULFW RI
0LFKLJDQLQOLJKWRIWKLVFRXUW¶VGHFLVLRQLQ8QLWHG6WDWHVY
2YDOOH )G WK &LU WKH SURVHFXWLRQ
SURFXUHG D VXSHUVHGLQJ LQIRUPDWLRQ FKDUJLQJ WKH VDPH
YLRODWLRQVRI86&†† E DQG D
1R 8QLWHG6WDWHVY9DUWDQLDQ
9DUWDQLDQGHIHQGDQWKHUHLQGLGE\IRUFHDQGWKUHDWRI
IRUFHZLOOIXOO\LQWLPLGDWHDQGLQWHUIHUHZLWKDQGDWWHPSW
WR LQMXUH LQWLPLGDWH DQG LQWHUIHUH ZLWK DQ $IULFDQ
$PHULFDQ IDPLO\ ZLWK UHJDUG WR WKHLU RSSRUWXQLW\ WR
QHJRWLDWHIRUSXUFKDVHFRQWUDFWIRUSXUFKDVHSXUFKDVH
DQG RFFXS\ WKH GZHOOLQJ DW (DVWZRRG +DUSHU
:RRGV 0LFKLJDQ E\ DFFRVWLQJ DQG WKUHDWHQLQJ
DSSUR[LPDWHO\WKUHHUHDOHVWDWHVDOHVSHUVRQVZLWKERGLO\
LQMXU\
(PSKDVLVDGGHG 7KLVFKDOOHQJHWRWKHVXIILFLHQF\RIWKH
LQIRUPDWLRQPXVWWKHUHIRUHIDLO
9DUWDQLDQQHYHUWKHOHVVLQVLVWVWKDWWKHUHZDVLQVXIILFLHQW
HYLGHQFHWRFRQYLFWKLPRIDYLRODWLRQRI86&† D
EHFDXVHKHPDGHQRGLUHFWWKUHDWWRWKH6WULQJHUVZKRKDG
DOUHDG\ GHSDUWHG IURP WKH (DVWZRRG QHLJKERUKRRG E\ WKH
WLPH RI 9DUWDQLDQ¶V DUULYDO RQ WKH VFHQH 7KH GHIHQGDQW
PLVXQGHUVWDQGVWKHUHDFKRIWKHVWDWXWHKRZHYHU&RQJUHVV¶V
REYLRXV LQWHQW LQ HQDFWLQJ WKH SURYLVLRQ XQGHU ZKLFK
9DUWDQLDQ ZDV FRQYLFWHG ZDV WR SURWHFW FLWL]HQV IURP
LQWLPLGDWLQJGLVFULPLQDWLRQLQDOODVSHFWVRIKRXVLQJVHOHFWLRQ
DQGSXUFKDVH7KHIDFWWKDWDWKUHDWRUDFWRILQWLPLGDWLRQZDV
QRW DGGUHVVHG GLUHFWO\ WR WKH SURWHFWHG LQGLYLGXDO GRHV QRW
PHDQWKDWWKRVHZRUGVRUFRQGXFWFDQQRWRUZLOOQRWKDYHWKH
HIIHFW GHVLUHG E\ WKH GHIHQGDQW ,Q WKH VDPH PDQQHU WKDW
WRVVLQJ D URFN DQG D WKUHDWHQLQJ QRWH LQWR D YDFDQW KRPH
UHFHQWO\WRXUHGE\DQ$IULFDQ$PHULFDQSRWHQWLDOEX\HUPD\
EHFRQVLGHUHGDQHIIRUWWRLQWLPLGDWHWKHZRXOGEHSXUFKDVHU
DQGRU VHOOHU FRPPXQLFDWLQJ WKUHDWV WR UHDO HVWDWH DJHQWV
ZRUNLQJRQEHKDOIRIPLQRULW\LQGLYLGXDOVPD\XQGHUFHUWDLQ
FLUFXPVWDQFHVDOVRVHUYHWRWKUHDWHQRULQWLPLGDWHWKHDFWXDO
FXVWRPHUV ,Q WKLV FDVH ZKHUH WKH REYLRXV LQWHQW RI WKH
GHIHQGDQW ZDV DOVR WR SURWHVW WKH DFWLRQ RI WKH LQGLYLGXDO
EX\HUVQRWMXVWRIWKHDJHQWVWKHPVHOYHVZHFRQFOXGHWKDWD
UDWLRQDOWULHURIIDFWZRXOGEHMXVWLILHGLQLQIHUULQJWKDWWKH
LPSRUWRIWKHWKUHDWZRXOGEHWUDQVPLWWHGWRWKHEX\HUV$QG
HVWDEOLVKHG FDVH ODZ SURYLGHV WKDW VXIILFLHQW HYLGHQFH WR
VXVWDLQ D FRQYLFWLRQ QHHG RQO\ FRQVLVW RI HYLGHQFH WKDW
MXVWLILHVDUDWLRQDOWULHURIIDFWYLHZLQJWKHWHVWLPRQ\LQWKH

-- 4 of 6 --

8QLWHG6WDWHVY9DUWDQLDQ 1R
3XUVXDQW WR WKH SHUWLQHQW SURYLVLRQV RI 86& † D LW LV
LOOHJDO WR LQMXUH LQWLPLGDWH RU LQWHUIHUH ZLWK RU DWWHPSW WR LQMXUH
LQWLPLGDWH RU LQWHUIHUH ZLWK E\ IRUFH RU WKUHDW RI IRUFH ³DQ\ SHUVRQ
EHFDXVH RI KLV UDFH DQG EHFDXVH KH LV RU KDV EHHQ SXUFKDVLQJ
RU QHJRWLDWLQJ IRU WKH SXUFKDVH RI DQ\ GZHOOLQJ ´
JRYHUQPHQWUHDGWRWKHMXU\RQO\SRUWLRQVRI:HLVV¶VGLUHFW
WHVWLPRQ\ WKDW UHFRXQWHG WKH DJHQWV¶ FRQIURQWDWLRQ ZLWK
9DUWDQLDQDQG:HLVV¶VVXEVHTXHQWUHDFWLRQVLQIRUPDWLRQWKDW
ZDVSURSHUO\DGPLVVLEOHDQGQRQREMHFWLRQDEOHDWHLWKHUWULDO
7KHSRUWLRQRIWKHFURVVH[DPLQDWLRQRIDJHQW:HLVVDWWKH
FLYLOWULDOWKDWZDVUHDGDWWKHFULPLQDOSURFHHGLQJPRUHRYHU
ZDVEULHIDQGFRQVLVWHGHQWLUHO\RI:HLVV¶VDJUHHPHQWWKDW
9DUWDQLDQQHYHUPHQWLRQHGWKH6WULQJHUVGLUHFWO\GXULQJKLV
WLUDGH$JDLQWKHPRWLYHVRIWKHFLYLODFWLRQODZ\HUZRXOG
QHFHVVDULO\EHV\QRQ\PRXVZLWKWKRVHRIWKHFULPLQDOGHIHQVH
DWWRUQH\UHJDUGLQJWKHHOLFLWDWLRQRUSRVVLEOHFKDOOHQJHWRVXFK
WHVWLPRQ\
2QWZRVHSDUDWHEDVHVWKHGHIHQGDQWDOVRVHHNVUHYHUVDORI
KLV FRQYLFWLRQ XQGHU WKH VHFRQG FRXQW RI WKH LQIRUPDWLRQ
ZKLFKDOOHJHGWKDWKH³ZLOOIXOO\LQWLPLGDWH>G@DQGLQWHUIHUH>G@
ZLWK´WKH6WULQJHUV¶SXUFKDVHRIWKH+DUSHU:RRGVKRPHLQ
YLRODWLRQRI86&† D )LUVW9DUWDQLDQFRQWHQGV
WKDWEHFDXVHKHGLGQRWWKUHDWHQWKH6WULQJHUVGLUHFWO\WKH
SURVHFXWLRQ DGGXFHG LQVXIILFLHQW HYLGHQFH WR VXSSRUW WKDW
FRQYLFWLRQ 6HFRQG KH PDLQWDLQV WKDW FRXQW WZR ZDV
PXOWLSOLFLWRXVEHFDXVHWKHVDPHLOOHJDODFWLYLW\FKDUJHGLQWKDW
FRXQW WKUHDWHQLQJ DQG LQWLPLGDWLQJ UHDO HVWDWH DJHQWV WR
SUHYHQWDSURSHUW\WUDQVIHUWRDQ$IULFDQ$PHULFDQEX\HUZDV
DOVRFKDUJHGLQWKHILUVWFRXQWRIWKHLQIRUPDWLRQ
,QKLVFKDOOHQJHWRWKHVXIILFLHQF\RIWKHLQIRUPDWLRQDQG
WKHFRQYLFWLQJHYLGHQFH9DUWDQLDQILUVWFXULRXVO\DUJXHVWKDW
FRXQWWZRGLGQRWVSHFLILFDOO\DOOHJHDVUHTXLUHGWKDWWKH
GHIHQGDQW WKUHDWHQHG WKH 6WULQJHUV ,Q SODLQ ODQJXDJH
KRZHYHUWKHLQIRUPDWLRQVWDWHV
7KDWRQRUDERXW$XJXVWZLWKLQWKH(DVWHUQ
'LVWULFW RI 0LFKLJDQ 6RXWKHUQ 'LYLVLRQ 5LFKDUG
1R 8QLWHG6WDWHVY9DUWDQLDQ
$W WKH FRQFOXVLRQ RI WKH FULPLQDO WULDO 9DUWDQLDQ ZDV
FRQYLFWHG E\ D MXU\ RQ ERWK FRXQWV DQG ZDV VHQWHQFHG WR
FRQFXUUHQWSULVRQWHUPVRIILYHPRQWKVIROORZHGE\GD\V
RIKRPHFRQILQHPHQW7KHGHIHQGDQWZDVIXUWKHUVHQWHQFHG
WRRQH\HDURIVXSHUYLVHGUHOHDVHDQGZDVRUGHUHGWRSD\D
VSHFLDODVVHVVPHQWRI)URPWKRVHFRQYLFWLRQV9DUWDQLDQ
QRZDSSHDOV
',6&866,21
,QFKDOOHQJLQJKLVFRQYLFWLRQV9DUWDQLDQILUVWDOOHJHVWKDW
WKH GLVWULFW FRXUW YLRODWHG KLV 6L[WK $PHQGPHQW ULJKW WR
FRQIURQWWKHZLWQHVVHVDJDLQVWKLP,QVXSSRUWRIWKDWFODLP
WKHGHIHQGDQWQRWHVWKDWWKHWULDOFRXUWDOORZHGWKHSURVHFXWLRQ
WRUHDGLQWRHYLGHQFHWHVWLPRQ\RIIHUHGE\DQRZGHFHDVHG
ZLWQHVV ZKR KDG WHVWLILHG DW DQ HDUOLHU FLYLO WULDO DJDLQVW
9DUWDQLDQ7KHGHIHQGDQWDVVHUWVWKDWHYHQWKRXJKKHHQMR\HG
WKHDVVLVWDQFHRIDFLYLOGHIHQVHDWWRUQH\DQGRIDFULPLQDO
GHIHQVHDWWRUQH\DWWKHUHVSHFWLYHWULDOVWKHODZ\HUVGLGQRW
KDYHVLPLODUPRWLYHV WRGHYHORSGLUHFWFURVVH[DPLQDWLRQ
DQGUHGLUHFWWHVWLPRQ\DWWKHWZRSURFHHGLQJV
,QSHUWLQHQWSDUWWKH6L[WK$PHQGPHQWWRWKH8QLWHG6WDWHV
&RQVWLWXWLRQSURYLGHVWKDW³>L@QDOOFULPLQDOSURVHFXWLRQVWKH
DFFXVHGVKDOOHQMR\WKHULJKWWREHFRQIURQWHGZLWKWKH
ZLWQHVVHV DJDLQVW KLP´ 5HDG OLWHUDOO\ WKH FRQVWLWXWLRQDO
PDQGDWH³ZRXOGUHTXLUHRQREMHFWLRQWKHH[FOXVLRQRIDQ\
VWDWHPHQWPDGHE\DGHFODUDQWQRWSUHVHQWDWWULDO´LQFOXGLQJ
³YLUWXDOO\HYHU\KHDUVD\H[FHSWLRQDUHVXOWORQJUHMHFWHGDV
XQLQWHQGHGDQGWRRH[WUHPH´2KLRY5REHUWV86
,Q IDFW WKH 8QLWHG 6WDWHV 6XSUHPH &RXUW KDV
VWDWHG WKDW ³>I@URP WKH HDUOLHVW GD\V RI RXU &RQIURQWDWLRQ
&ODXVH MXULVSUXGHQFH ZH KDYH FRQVLVWHQWO\ KHOG WKDW WKH
&ODXVHGRHVQRWQHFHVVDULO\SURKLELWWKHDGPLVVLRQRIKHDUVD\
VWDWHPHQWV DJDLQVW D FULPLQDO GHIHQGDQW HYHQ WKRXJK WKH
DGPLVVLRQRIVXFKVWDWHPHQWVPLJKWEHWKRXJKWWRYLRODWHWKH
OLWHUDOWHUPVRIWKH&ODXVH´,GDKRY:ULJKW86

1HYHUWKHOHVV³>W@KH&RQIURQWDWLRQ&ODXVHRSHUDWHVLQWZR
VHSDUDWH ZD\V WR UHVWULFW WKH UDQJH RI DGPLVVLEOH KHDUVD\´

-- 5 of 6 --

8QLWHG6WDWHVY9DUWDQLDQ 1R
5REHUWV86DW)LUVWEHFDXVHRIWKHFRQVWLWXWLRQDO
SUHIHUHQFH IRU IDFHWRIDFH DFFXVDWLRQV WKH FRQVWLWXWLRQDO
SURYLVLRQ HVWDEOLVKHV D UXOH RI QHFHVVLW\ UHTXLULQJ WKH
SURVHFXWLRQ HLWKHU WR SURGXFH RU WR GHPRQVWUDWH WKH
XQDYDLODELOLW\RIWKHGHFODUDQW6HHLG6HFRQGEHFDXVHWKH
FODXVHVHHNVWRDXJPHQWDFFXUDF\LQWKHIDFWILQGLQJSURFHVV
E\HQVXULQJDQRSSRUWXQLW\WRWHVWDGYHUVHHYLGHQFHFRXUWV
ZLOOFRXQWHQDQFHDGPLVVLRQRIKHDUVD\WHVWLPRQ\LQFULPLQDO
WULDOVRQO\ZKHQ³LQGLFLDRIUHOLDELOLW\´PDUNWKHWHVWLPRQ\
ZLWKVXIILFLHQWWUXVWZRUWKLQHVV6HHLGDW6HHDOVR8QLWHG
6WDWHVY/LFDYROL)G WK&LU 6XFK
³>U@HOLDELOLW\FDQEHLQIHUUHGZLWKRXWPRUHLQDFDVHZKHUHWKH
HYLGHQFHIDOOVZLWKLQDILUPO\URRWHGKHDUVD\H[FHSWLRQ,Q
RWKHUFDVHVWKHHYLGHQFHPXVWEHH[FOXGHGDWOHDVWDEVHQWD
VKRZLQJ RI SDUWLFXODUL]HG JXDUDQWHHV RI WUXVWZRUWKLQHVV´
5REHUWV86DW
,Q FKDOOHQJLQJ WKH DGPLVVLELOLW\ DW KLV FULPLQDO WULDO RI
WHVWLPRQ\JLYHQE\UHDOHVWDWHDJHQW6WHYHQ:HLVVDWDQHDUOLHU
FLYLOWULDOWKHGHIHQGDQWGRHVQRWFRQWHVWWKHIDFWWKDW:HLVV
ZDV XQDYDLODEOH WR WHVWLI\ ,QGHHG WKH SDUWLHV DJUHH WKDW
:HLVVGLHGEHWZHHQWKHFRQFOXVLRQRIWKHFLYLOSURFHHGLQJV
DQGWKHEHJLQQLQJRIWKHFULPLQDOWULDO 6HH )HG5(YLG
D 5DWKHU 9DUWDQLDQ IRFXVHV KLV REMHFWLRQ RQ KLV
EHOLHIWKDWWKHHYLGHQFHDGPLWWHGIDLOVWRIDOOZLWKLQ³DILUPO\
URRWHG KHDUVD\ H[FHSWLRQ´ ,Q UHVSRQVH WKH JRYHUQPHQW
FRQWHQGVWKDW:HLVV¶VSULRUWHVWLPRQ\ZDVLQGHHGDGPLVVLEOH
EHFDXVH LW IHOO VTXDUHO\ ZLWKLQ WKH UHFRJQL]HG KHDUVD\
H[FHSWLRQIRUIRUPHUWHVWLPRQ\3XUVXDQWWR)HGHUDO5XOHRI
(YLGHQFH E LIDGHFODUDQWLVXQDYDLODEOHDVDZLWQHVV
DFRXUWPD\DFFHSW
>W@HVWLPRQ\JLYHQDVDZLWQHVVDWDQRWKHUKHDULQJRIWKH
VDPHRUDGLIIHUHQWSURFHHGLQJRULQDGHSRVLWLRQWDNHQ
LQ FRPSOLDQFH ZLWK ODZ LQ WKH FRXUVH RI WKH VDPH RU
DQRWKHU SURFHHGLQJ LI WKH SDUW\ DJDLQVW ZKRP WKH
WHVWLPRQ\ LV QRZ RIIHUHG RU LQ D FLYLO DFWLRQ RU
SURFHHGLQJDSUHGHFHVVRULQLQWHUHVWKDGDQRSSRUWXQLW\
DQGVLPLODUPRWLYHWRGHYHORSWKHWHVWLPRQ\E\GLUHFW
FURVVRUUHGLUHFWH[DPLQDWLRQ
1R 8QLWHG6WDWHVY9DUWDQLDQ
(PSKDVLVDGGHG
:HLVV¶V WHVWLPRQ\ LQ WKH FLYLO OLWLJDWLRQ DGGUHVVHG
DOOHJDWLRQVWKDWWKHGHIHQGDQWFRPPXQLFDWHGWKUHDWVWRWKH
UHDO HVWDWH DJHQWV LQWHQGHG WR LQWLPLGDWH DQG WKHUHE\ DOVR
LQWHUIHUHG ZLWK WKH 6WULQJHUV¶ ULJKWV WR SXUFKDVH IUHH IURP
LQWLPLGDWLRQ6LPLODUO\WKHREMHFWRI9DUWDQLDQ¶VFULPLQDO
WULDOZDVWRGHWHUPLQHZKHWKHUWKHGHIHQGDQWYRLFHGWKUHDWV
LQWHQGHGWRLQWLPLGDWHDQGWKHUHE\LQWHUIHUHZLWKWKHDJHQWV¶
VDOHDQGWKH6WULQJHUV¶SXUFKDVHRIWKHKRPH)XUWKHUPRUH
WKHSDUWLHVGRQRWGLVSXWHWKDW9DUWDQLDQ¶VDWWRUQH\GXULQJWKH
FLYLOSURFHHGLQJVKDGHYHU\RSSRUWXQLW\WRGHYHORSIDFWVDQG
WKHRULHVLQVXSSRUWRIKLVFOLHQW¶VOHJDOSRVLWLRQ:KHUHWKH
SDUWLHVGLYHUJHLQWKHLUOHJDODQDO\VLVRIWKHOHJLWLPDF\RIWKH
GLVWULFWFRXUW¶VGHFLVLRQWRDGPLW:HLVV¶VIRUPHUWHVWLPRQ\LV
LQWKHLUXQGHUVWDQGLQJVRIWKHPRWLYHVRIWKHFLYLODQGFULPLQDO
DWWRUQH\VWRGHYHORSVXFKWHVWLPRQ\
%HIRUH WKLV FRXUW WKH GHIHQGDQW LQVLVWV WKDW DOORZLQJ
:HLVV¶VFLYLOWULDOWHVWLPRQ\WREHDGPLWWHGLQWKHFULPLQDO
SURFHHGLQJ ZLWKRXW WKH RSSRUWXQLW\ IRU FURVVH[DPLQDWLRQ
HIIHFWLYHO\QXOOLILHGKLVULJKWWRDWWDFNWKHZLWQHVV¶VDFFRXQW
RIWKHLQFLGHQWDWLVVXHEHFDXVH9DUWDQLDQ¶VFLYLODWWRUQH\GLG
QRWKDYH WKHVDPHPRWLYHRUOHJDOVWUDWHJ\DVKLVFULPLQDO
GHIHQVHDWWRUQH\6SHFLILFDOO\WKHGHIHQGDQWFRQWHQGVWKDW
WKHSODQDWWKHFLYLOWULDOZDVWRHVWDEOLVKWKDW9DUWDQLDQZDV
QRWOLDEOHWRWKH6WULQJHUVDQGWR:HLVVIRUDQ\WKUHDWHQLQJRU
LQWLPLGDWLQJFRPPHQWVEHFDXVHDQ\REMHFWLRQDEOHVWDWHPHQWV
ZHUHPDGHQRWWRWKHPEXWUDWKHUWR.DWK\DQG0LNH0DUWLQ
ZKRKDGQRWILOHGDQ\FLYLOFODLPVDJDLQVWWKHGHIHQGDQW%\
FRQWUDVW9DUWDQLDQFRQWHQGVWKDWEHFDXVHRQHFRXQWRIWKH
FULPLQDOLQIRUPDWLRQORGJHGDJDLQVWKLPDOOHJHGWKUHDWVDQG
LQWLPLGDWLRQ DJDLQVW WKH 0DUWLQV DQG DJDLQVW :HLVV WKH
FRQFHVVLRQV PDGH DQG VWUDWHJ\ HPSOR\HG LQ WKH FLYLO WULDO
DFWXDOO\KHOSHGSURYHWKHJRYHUQPHQW¶VFDVHDJDLQVWKLPLQ
WKHFULPLQDOSURFHHGLQJV
2Q D SXUHO\ WKHRUHWLFDO OHYHO 9DUWDQLDQ¶V DUJXPHQW KDV
VRPH DSSHDO ,Q LWV DSSOLFDWLRQ WR WKH IDFWV RI WKLV FDVH
KRZHYHU WKH DVVHUWLRQ LV PHULWOHVV ,W LV FOHDU WKDW WKH

-- 6 of 6 --