01a0255p.06

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$SSHOOHH
Y
&+5,6 :5,*+7
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV
1R²%HUQLFH%'RQDOG'LVWULFW-XGJH
$UJXHG0D\
'HFLGHGDQG)LOHG$XJXVW
%HIRUH-21(66,/(5DQG*,/0$1&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' %UXFH , *ULIIH\ $66,67$17 )('(5$/
38%/,&'()(1'(50HPSKLV7HQQHVVHHIRU$SSHOODQW
-HQQLIHU/DZUHQFH:HEEHU$66,67$1781,7('67$7(6
$77251(< 0HPSKLV 7HQQHVVHH IRU $SSHOOHH
21%5,()'RULV$5DQGOH+ROW$66,67$17)('(5$/
38%/,&'()(1'(50HPSKLV7HQQHVVHHIRU$SSHOODQW
-HQQLIHU/DZUHQFH:HEEHU$66,67$1781,7('67$7(6
$77251(<0HPSKLV7HQQHVVHHIRU$SSHOOHH

-- 1 of 6 --

8QLWHG6WDWHVY:ULJKW 1R
6,/(5 - GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK
-21(6 - MRLQHG *,/0$1 - SS GHOLYHUHG D
VHSDUDWHFRQFXUULQJRSLQLRQ
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
6,/(5 &LUFXLW -XGJH 'HIHQGDQW &KULV :ULJKW ZDV
FRQYLFWHG RQ RQH FRXQW RI DUVRQ LQ YLRODWLRQ RI 86&
† L +HDSSHDOVWKHGLVWULFWFRXUW¶VGHQLDORIKLVPRWLRQ
WRGLVPLVVKLVLQGLFWPHQWRQWKHJURXQGWKDWJRYHUQPHQWILUH
LQYHVWLJDWRUV¶IDLOXUHWRSUHVHUYHSK\VLFDOHYLGHQFHIURPWKH
VFHQH RI WKH ILUH YLRODWHG KLV GXH SURFHVV ULJKW WR DFFHVV
H[FXOSDWRU\HYLGHQFH:HDIILUP
,%DFNJURXQG
2Q2FWREHUDVTXDUHIRRW:DO0DUWUHWDLO
DQG ZDUHKRXVH EXLOGLQJ LQ 0HPSKLV 7HQQHVVHH ZDV
GHVWUR\HG E\ ILUH 7KH GD\ DIWHU WKH ILUH WKH 1DWLRQDO
5HVSRQVH 7HDP RI WKH %XUHDX RI $OFRKRO 7REDFFR DQG
)LUHDUPV ³$7)´ DVVLVWHG ORFDO ILUH GHSDUWPHQWV ZLWK WKH
LQYHVWLJDWLRQRIWKDWILUH-RKQ0LURFKDDQ$7)VSHFLDODJHQW
DQGFHUWLILHGILUHLQYHVWLJDWRUH[DPLQHGWKHILUHVFHQHDQG
LQWHUYLHZHGZLWQHVVHVLQRUGHUWRGHWHUPLQHWKHFDXVHRIWKH
ILUH$IWHUFRPSOHWLQJKLVLQYHVWLJDWLRQ0LURFKDHOLPLQDWHG
DOODFFLGHQWDOFDXVHVLQFOXGLQJHOHFWULFDOPDOIXQFWLRQIURP
EHLQJWKHFDXVHRIWKHILUH,QKLVRSLQLRQWKHILUH¶VFDXVH
ZDVDUVRQ
'XULQJWKHFRXUVHRIKLVLQYHVWLJDWLRQ0LURFKDOHDUQHGWKDW
WKHUH KDG EHHQ D SUHYLRXV ILUH DW WKH VDPH :DO0DUW RQ
2FWREHU,QDUHSRUWIURPWKH2FWREHUILUHDILUH
OLHXWHQDQW ZKR ZDV QRW D WUDLQHG ILUH LQYHVWLJDWRU KDG
LQGLFDWHG WKDW WKH FDXVH RI WKDW ILUH DSSHDUHG WR EH DQ
HOHFWULFDOZLULQJSUREOHP%DVHGRQKLVDZDUHQHVVRIWKDW
UHSRUW 0LURFKD H[DPLQHG WKH HOHFWULFDO V\VWHP WKDW ZDV
VXVSHFWHGWRKDYHEHHQWKHRULJLQRIWKH2FWREHUILUH+H
GHWHUPLQHGWKDWWKHHOHFWULFDOV\VWHPLQTXHVWLRQKDGQRWEHHQ

-- 2 of 6 --

8QLWHG6WDWHVY:ULJKW 1R
$OVR ³7KH 'XH 3URFHVV
&ODXVH RI WKH
)RXUWHHQWK
$PHQGPHQW
PDNHV WKH JRRG RU
EDG IDLWK RI WKH
6WDWH LUUHOHYDQW
ZKHQ WKH 6WDWH IDLOV
WR GLVFORVH WR WKH
GHIHQGDQW PDWHULDO
H[FXOSDWRU\
HYLGHQFH´ ,G DW

0\GLVDJUHHPHQWZLWKWKH-REVRQWHVWGRHVQRWKRZHYHU
DIIHFWP\FRQFXUUHQFHLQWKHXOWLPDWHRXWFRPHRIWKHSUHVHQW
FDVH:ULJKWIDLOHGWRVKRZWKDWWKHGHVWUR\HGHYLGHQFHZDV
PDWHULDOO\ H[FXOSDWRU\ HYLGHQFH XQGHU <RXQJEORRG DQG
7URPEHWWD+HLVWKHUHIRUHERXQGE\WKHHOHPHQWVQHHGHGWR
SURYH³SRWHQWLDOO\XVHIXO´HYLGHQFHXQGHU-REVRQWKHILUVWRI
ZKLFKLVSURRIRIEDGIDLWKRQWKHSDUWRIWKHJRYHUQPHQW
%HFDXVH,DJUHHZLWKWKHFRXUWWKDW:ULJKWKDVIDLOHGWRVKRZ
EDG IDLWK RQ WKH SDUW RI WKH JRYHUQPHQW , FRQFXU LQ WKH
MXGJPHQWGHVSLWHP\GLVDJUHHPHQWZLWKWKHWHVWVHWIRUWKLQ
-REVRQ
1R 8QLWHG6WDWHVY:ULJKW
WKHRULJLQRIHLWKHUILUH%\H[DPLQLQJDOOUHOHYDQWHOHFWULFDO
HYLGHQFH0LURFKDGHWHUPLQHGWKDWWKH2FWREHUILUHZDVQRW
HOHFWULFDO :KLOH QR HOHFWULFDO HYLGHQFH ZDV SUHVHUYHG IRU
IXWXUHLQVSHFWLRQ0LURFKDGRFXPHQWHGDQGSKRWRJUDSKHGWKDW
HYLGHQFHEHIRUHLWZDVGHVWUR\HG
,Q6HSWHPEHU:ULJKWZDVLQGLFWHGRQRQHFRXQWRI
DUVRQLQYLRODWLRQRI86&† L IRUWKH2FWREHU
:DO0DUW ILUH +H ILOHG D PRWLRQ WR GLVPLVV WKH
LQGLFWPHQWFODLPLQJWKDWJRYHUQPHQWLQYHVWLJDWRUVE\IDLOLQJ
WR SUHVHUYH UHOHYDQW HOHFWULFDO HYLGHQFH ³GHVWUR\HG DQGRU
GLVSRVHGRIDOORIWKHFULWLFDOSK\VLFDOHYLGHQFHIURP>WKH@
VFHQHRIWKHILUHVRQ2FWREHUDQG2FWREHU´
LQ YLRODWLRQ RI KLV GXH SURFHVV ULJKW WR DFFHVV H[FXOSDWRU\
HYLGHQFH7KHGLVWULFWFRXUWGHQLHG:ULJKW¶VPRWLRQ
:ULJKWZDVFRQYLFWHGDIWHUDMXU\WULDODQGZDVVHQWHQFHG
WR ILIW\VHYHQ PRQWKV LQFDUFHUDWLRQ +H FRQWHQGV WKDW WKH
GLVWULFW FRXUW HUUHG E\ GHQ\LQJ KLV PRWLRQ WR GLVPLVV WKH
LQGLFWPHQW
,,'LVFXVVLRQ
D6WDQGDUGRI5HYLHZ
:KHUHDGHIHQGDQWPRYHV D GLVWULFWFRXUWWRGLVPLVVKLV
LQGLFWPHQW RQ WKH JURXQG WKDW WKH JRYHUQPHQW IDLOHG WR
SUHVHUYHH[FXOSDWRU\HYLGHQFHZHUHYLHZWKHGLVWULFWFRXUW¶V
GHQLDORIWKDWPRWLRQGHQRYR6HH8QLWHG6WDWHVY-REVRQ
)G WK&LU
E$QDO\VLV
7RVDIHJXDUGDGHIHQGDQW¶VGXHSURFHVVULJKWWRSUHVHQWD
FRPSOHWHGHIHQVHWKH6XSUHPH&RXUWKDVGHYHORSHG³μZKDW
PLJKWORRVHO\EHFDOOHGWKHDUHDRIFRQVWLWXWLRQDOO\JXDUDQWHHG
DFFHVVWRHYLGHQFH¶´&DOLIRUQLDY7URPEHWWD86
TXRWLQJ8QLWHG6WDWHVY9DOHQ]XHOD%HUQDO86
6HSDUDWH WHVWV DUH DSSOLHG WR GHWHUPLQH
ZKHWKHUWKHJRYHUQPHQW¶VIDLOXUHWRSUHVHUYHHYLGHQFHULVHV
WRWKHOHYHORIDGXHSURFHVVYLRODWLRQLQFDVHVZKHUHPDWHULDO

-- 3 of 6 --

8QLWHG6WDWHVY:ULJKW 1R
H[FXOSDWRU\HYLGHQFHLVQRWDFFHVVLEOHVHH7URPEHWWD
86DWYHUVXVFDVHVZKHUH³SRWHQWLDOO\XVHIXO´HYLGHQFH
LVQRWDFFHVVLEOH6HH$UL]RQDY<RXQJEORRG86

,Q7URPEHWWDWKH&RXUWKHOGWKDWWKHJRYHUQPHQWYLRODWHV
DGHIHQGDQW¶VGXHSURFHVVULJKWVZKHUHPDWHULDOH[FXOSDWRU\
HYLGHQFHLVQRWSUHVHUYHG6HH7URPEHWWD86DW
)RU HYLGHQFH WR PHHW WKH VWDQGDUG RI FRQVWLWXWLRQDO
PDWHULDOLW\LW³PXVWERWKSRVVHVVDQH[FXOSDWRU\YDOXHWKDW
ZDVDSSDUHQWEHIRUHWKHHYLGHQFHZDVGHVWUR\HGDQGEHRI
VXFKDQDWXUHWKDWWKHGHIHQGDQWZRXOGEHXQDEOHWRREWDLQ
FRPSDUDEOHHYLGHQFHE\RWKHUUHDVRQDEO\DYDLODEOHPHDQV´
,G DW 7KH GHVWUXFWLRQ RI PDWHULDO H[FXOSDWRU\
HYLGHQFH YLRODWHV GXH SURFHVV UHJDUGOHVV RI ZKHWKHU WKH
JRYHUQPHQWDFWHGLQEDGIDLWK6HHLGDW<RXQJEORRG
86DW
,Q<RXQJEORRG86DWWKH&RXUWKHOGWKDW³WKH'XH
3URFHVV&ODXVHUHTXLUHVDGLIIHUHQWUHVXOWZKHQZHGHDOZLWK
WKH IDLOXUH RI WKH 6WDWH WR SUHVHUYH HYLGHQWLDU\ PDWHULDO RI
ZKLFK QR PRUH FDQ EH VDLG WKDQ WKDW LW FRXOG KDYH EHHQ
VXEMHFWHGWRWHVWVWKHUHVXOWVRIZKLFKPLJKWKDYHH[RQHUDWHG
WKH GHIHQGDQW´ 7KH JRYHUQPHQW GRHV QRW KDYH ³DQ
XQGLIIHUHQWLDWHGDQGDEVROXWHGXW\WRUHWDLQDQGWRSUHVHUYHDOO
PDWHULDOWKDWPLJKWEHRIFRQFHLYDEOHHYLGHQWLDU\VLJQLILFDQFH
LQ D SDUWLFXODU SURVHFXWLRQ´ ,G DW )RU WKH IDLOXUH WR
SUHVHUYHSRWHQWLDOO\XVHIXOHYLGHQFHWRFRQVWLWXWHDGHQLDORI
GXHSURFHVVDFULPLQDOGHIHQGDQWPXVWVKRZEDGIDLWKRQWKH
SDUWRIWKHJRYHUQPHQW6HHLG³7KHSUHVHQFHRUDEVHQFHRI
EDGIDLWKE\WKH>JRYHUQPHQWDFWRU@IRUWKHSXUSRVHVRIWKH
'XH3URFHVV&ODXVHPXVWQHFHVVDULO\WXUQRQWKH>JRYHUQPHQW
DFWRU¶V@NQRZOHGJHRIWKHH[FXOSDWRU\YDOXHRIWKHHYLGHQFH
DWWKHWLPHLWZDVORVWRUGHVWUR\HG´,GDWQ %HFDXVH
WKH<RXQJEORRGFRXUWIRXQGWKDWSROLFHGLGQRWDFWLQEDGIDLWK
E\IDLOLQJWRSUHVHUYHSRWHQWLDOO\XVHIXOHYLGHQFHLWUHMHFWHG
<RXQJEORRG¶VGXHSURFHVVFODLPZLWKRXWIXUWKHUDQDO\VLV
,Q -REVRQ )G DW ZH UHFRJQL]HG WKDW ZKHUH
SRWHQWLDOO\XVHIXOHYLGHQFHLVQRWSUHVHUYHGEDGIDLWKDORQH
1R 8QLWHG6WDWHVY:ULJKW
GHIHQGDQWFRQYLQFHVWKHFRXUWWKDWWKHJRYHUQPHQWDFWHGLQ
EDGIDLWKLQGHVWUR\LQJSRWHQWLDOO\H[FXOSDWRU\HYLGHQFHKH
GRHVQRWKDYHWRSURYHWKHRWKHUWZRHOHPHQWVVHWIRUWKLQ
7URPEHWWDWRHVWDEOLVKDGXHSURFHVVYLRODWLRQ
7KHYDULRXVWHVWVRI7URPEHWWD<RXQJEORRGDQG-REVRQ
DUHVXPPDUL]HGLQWKHWDEOHEHORZ
7URPEHWWD
86

<RXQJEORRG
86
-REVRQ )G

7HVWV
IRU ³&RQVWLWXWLRQDO
PDWHULDOLW\´ ,G
DW ODWHU
UHIHUUHG WR LQ
<RXQJEORRG DV
³PDWHULDO
H[FXOSDWRU\
HYLGHQFH´
³3RWHQWLDOO\
H[FXOSDWRU\
HYLGHQFH´ ,G DW

³3RWHQWLDOO\ XVHIXO´
HYLGHQFH ,G DW
:KDW
PXVW
EH
VKRZQ
³>(@YLGHQFH
PXVW ERWK
SRVVHVV DQ
H[FXOSDWRU\
YDOXH WKDW ZDV
DSSDUHQW EHIRUH
WKH HYLGHQFH ZDV
GHVWUR\HG DQG
EH RI VXFK D
QDWXUH WKDW WKH
GHIHQGDQW ZRXOG
EH XQDEOH WR
REWDLQ
FRPSDUDEOH
HYLGHQFH E\
RWKHU UHDVRQDEO\
DYDLODEOH
PHDQV´ ,G DW

³>,@W >WKH
HYLGHQWLDU\
PDWHULDO@ FRXOG
KDYH EHHQ
VXEMHFWHG WR WHVWV
WKH UHVXOWV RI ZKLFK
PLJKW KDYH
H[RQHUDWHG WKH
GHIHQGDQW´ ,G DW

³>8@QOHVV D
FULPLQDO GHIHQGDQW
FDQ VKRZ EDG IDLWK
RQ WKH SDUW RI WKH
SROLFH IDLOXUH WR
SUHVHUYH
SRWHQWLDOO\ XVHIXO
HYLGHQFH GRHV QRW
FRQVWLWXWH D GHQLDO
RI GXH SURFHVV RI
ODZ´ ,G DW
³ >7@KDW WKH
JRYHUQPHQW DFWHG LQ
EDG IDLWK LQ IDLOLQJ WR
SUHVHUYH WKH HYLGHQFH
WKDW WKH H[FXOSDWRU\
YDOXH RI WKH HYLGHQFH
ZDV DSSDUHQW EHIRUH LWV
GHVWUXFWLRQ DQG WKDW
WKH QDWXUH RI WKH
HYLGHQFH ZDV VXFK WKDW
WKH GHIHQGDQW ZRXOG EH
XQDEOH WR REWDLQ
FRPSDUDEOH HYLGHQFH E\
RWKHU UHDVRQDEO\
DYDLODEOH PHDQV´ ,G DW

-- 4 of 6 --

8QLWHG6WDWHVY:ULJKW 1R
,Q-REVRQKRZHYHUWKLVFRXUWPLVLQWHUSUHWHG<RXQJEORRG
E\FUHDWLQJDQHZWHVWWRGHWHUPLQHZKHWKHUWKHGHIHQGDQW¶V
GXHSURFHVV ULJKWV ZHUH YLRODWHG ZKHQ WKH JRYHUQPHQW
GHVWUR\HGHYLGHQFH³ZKRVHH[FXOSDWRU\YDOXHLVLQGHWHUPLQDWH
DQG RQO\ μSRWHQWLDOO\ XVHIXO¶´ -REVRQ )G DW
-REVRQ VHWV IRUWK WKUHH HOHPHQWV WKDW PXVW EH HVWDEOLVKHG
³ WKDW WKH JRYHUQPHQW DFWHG LQ EDG IDLWK LQ IDLOLQJ WR
SUHVHUYHWKHHYLGHQFH WKDWWKHH[FXOSDWRU\YDOXHRIWKH
HYLGHQFHZDVDSSDUHQWEHIRUHLWVGHVWUXFWLRQDQG WKDWWKH
QDWXUHRIWKHHYLGHQFHZDVVXFKWKDWWKHGHIHQGDQWZRXOGEH
XQDEOH WR REWDLQ FRPSDUDEOH HYLGHQFH E\ RWKHU UHDVRQDEO\
DYDLODEOHPHDQV´,G FLWLQJ7URPEHWWDDQG<RXQJEORRG
7KHSUREOHPZLWK-REVRQLVWKDWLWFRQIODWHVWKHGLIIHULQJ
WHVWV RI 7URPEHWWD DQG <RXQJEORRG VXFK WKDW WKHUH LV QR
ORQJHU DQ\ GLVWLQFWLRQ EHWZHHQ PDWHULDOO\ H[FXOSDWRU\ DQG
SRWHQWLDOO\ H[FXOSDWRU\ HYLGHQFH -REVRQ SXUSRUWV WR
GHOLQHDWHWKHWHVWIRUHYLGHQFH³ZKRVHH[FXOSDWRU\YDOXHLV
LQGHWHUPLQDWHDQG RQO\μSRWHQWLDOO\XVHIXO¶´LG²WKDWLV
SRWHQWLDOO\H[FXOSDWRU\HYLGHQFH%XWWKHODVWWZRSDUWVRIWKH
-REVRQWHVW²WKDWWKHH[FXOSDWRU\YDOXHRIWKHHYLGHQFHZDV
DSSDUHQW EHIRUH LWV GHVWUXFWLRQ DQG WKDW WKH QDWXUH RI WKH
HYLGHQFH ZDV VXFK WKDW WKH GHIHQGDQW ZRXOG EH XQDEOH WR
REWDLQ FRPSDUDEOH HYLGHQFH E\ RWKHU UHDVRQDEO\ DYDLODEOH
PHDQV²DUHSUHFLVHO\WKHHOHPHQWVWKDWPXVWEHVKRZQWR
GHPRQVWUDWH WKDW HYLGHQFH LV PDWHULDOO\ H[FXOSDWRU\ 6HH
7URPEHWWD86DW VWDWLQJWKDWIRUHYLGHQFHWREH
PDWHULDOO\H[FXOSDWRU\LW³PXVWERWKSRVVHVVDQH[FXOSDWRU\
YDOXHWKDWZDVDSSDUHQWEHIRUHWKHHYLGHQFHZDVGHVWUR\HG
DQGEHRIVXFKDQDWXUHWKDWWKHGHIHQGDQWZRXOGEHXQDEOHWR
REWDLQ FRPSDUDEOH HYLGHQFH E\ RWKHU UHDVRQDEO\ DYDLODEOH
PHDQV´
7KXVWKHILUVWSDUWRIWKH-REVRQWHVW²JRRGRUEDGIDLWK²
VKRXOGEHLUUHOHYDQWRQFHWKHODVWWZRSDUWVRIWKH-REVRQWHVW
DUHVKRZQEHFDXVHWKH6XSUHPH&RXUWKDVH[SUHVVO\KHOGWKDW
WKH GHWHUPLQDWLRQ RI JRRG RU EDG IDLWK LV LUUHOHYDQW IRU
PDWHULDOO\H[FXOSDWRU\HYLGHQFH6HH<RXQJEORRG86
DW ³7KH 'XH 3URFHVV &ODXVH RI WKH )RXUWHHQWK
$PHQGPHQW PDNHV WKH JRRG RU EDG IDLWK RI WKH 6WDWH
LUUHOHYDQWZKHQWKH6WDWHIDLOVWRGLVFORVHWRWKHGHIHQGDQW
PDWHULDOH[FXOSDWRU\HYLGHQFH´ 3XWDQRWKHUZD\RQFHD
1R 8QLWHG6WDWHVY:ULJKW
ZLOOQRWYLRODWHDFULPLQDOGHIHQGDQW¶VGXHSURFHVVULJKWWR
DFFHVVH[FXOSDWRU\HYLGHQFH)RUDGXHSURFHVVYLRODWLRQWR
H[LVW-REVRQUHTXLUHVWKDWRQFHDGHIHQGDQWGHPRQVWUDWHVEDG
IDLWKDQGWKDWWKHH[FXOSDWRU\YDOXHRIHYLGHQFHZDVDSSDUHQW
EHIRUH LWV GHVWUXFWLRQ SULQFLSOHV WKDW ZH IRXQG WR EH
LQWHUUHODWHGIRUWKHUHDVRQVWDWHGLQ<RXQJEORRGKHRUVKH
PXVW DOVR GHPRQVWUDWH DQ LQDELOLW\ WR REWDLQ FRPSDUDEOH
HYLGHQFHE\RWKHUUHDVRQDEO\DYDLODEOHPHDQV6HHLG$QG
ZKHUHWKHJRYHUQPHQWLVQHJOLJHQWHYHQJURVVO\QHJOLJHQWLQ
IDLOLQJ WR SUHVHUYH SRWHQWLDO H[FXOSDWRU\ HYLGHQFH WKH EDG
IDLWKUHTXLUHPHQWLVQRWVDWLVILHG6HHLG
:ULJKWFRQWHQGVWKDWILUHLQYHVWLJDWRUV¶IDLOXUHWRSUHVHUYH
HOHFWULFDOHYLGHQFHUHFRYHUHGIURPWKH2FWREHU:DO
0DUW ILUH YLRODWHG KLV FRQVWLWXWLRQDO ULJKW WR DFFHVV
H[FXOSDWRU\ HYLGHQFH %HFDXVH WKDW HYLGHQFH ZDV RQO\
SRWHQWLDOO\XVHIXODQGWKHJRYHUQPHQWGLGQRWDFWLQEDGIDLWK
E\IDLOLQJWRSUHVHUYHLW:ULJKW¶VGXHSURFHVVULJKWWRDFFHVV
H[FXOSDWRU\HYLGHQFHZDVQRWYLRODWHG
:KLOH:ULJKWFRQWHQGVWKDWWKHHYLGHQFHLQTXHVWLRQZDV
PDWHULDO H[FXOSDWRU\ HYLGHQFH WKH HYLGHQFH ZDV RQO\
SRWHQWLDOO\XVHIXO7KHKHDUWRI:ULJKW¶VDUJXPHQWLVWKDWWKH
GHVWUXFWLRQRIHOHFWULFDOHYLGHQFHSUHYHQWHGKLVH[SHUWIURP
FRQGXFWLQJ IXWXUH WHVWV WKH UHVXOWV RI ZKLFK PD\ KDYH
H[RQHUDWHG KLP E\ VKRZLQJ WKDW DQ HOHFWULFDO PDOIXQFWLRQ
FRXOG KDYH EHHQ WKH FDXVH RI WKH ILUH 3XUVXDQW WR
<RXQJEORRG VXFK HYLGHQFH ZDV QRW PDWHULDO H[FXOSDWRU\
HYLGHQFH,QVWHDGLWZDVRQO\SRWHQWLDOO\XVHIXOHYLGHQFH
%HFDXVH ZH ILQG QR EDG IDLWK RQ WKH SDUW RI ILUH
LQYHVWLJDWRUV ZKR IDLOHG WR SUHVHUYH WKH SRWHQWLDOO\ XVHIXO
HOHFWULFDO HYLGHQFH ZH OLNH WKH <RXQJEORRG FRXUW UHMHFW
:ULJKW¶V GXH SURFHVV FODLP ZLWKRXW IXUWKHU DQDO\VLV 7KH
UHFRUG FRQWDLQV QR DOOHJDWLRQ RI RIILFLDO DQLPXV WRZDUG
:ULJKW RU RI D FRQVFLRXV HIIRUW WR VXSSUHVV H[FXOSDWRU\
HYLGHQFH 7KHUH LV QR HYLGHQFH WKDW DQ\ ILUH LQYHVWLJDWRU
FRQVLGHUHG DQ\ HOHFWULFDO DSSDUDWXV WR EH WKH FDXVH RI WKH
2FWREHUILUH(YHQLIWKHILUHLQYHVWLJDWRUVZHUHQHJOLJHQW

-- 5 of 6 --

8QLWHG6WDWHVY:ULJKW 1R
LQIDLOLQJWRSUHVHUYHHOHFWULFDOHYLGHQFHQHJOLJHQFHGRHVQRW
FRQVWLWXWHEDGIDLWK
7KHUHFRUGGHPRQVWUDWHVWKDWDSURIHVVLRQDOJRRGIDLWKILUH
LQYHVWLJDWLRQ ZDV FRQGXFWHG :ULJKW DUJXHV WKDW 0LURFKD
DFWHGLQEDGIDLWKEHFDXVHKHZDVDZDUHRIDILUHPDQ¶VUHSRUW
WKDW DQ 2FWREHU ILUH DW WKH :DO0DUW ZDV HOHFWULFDO
VXJJHVWLQJ WKDW WKH VDPH HOHFWULFDO DSSDUDWXV FRXOG KDYH
FDXVHG WKH 2FWREHU ILUH EXW 0LURFKD D FHUWLILHG ILUH
LQYHVWLJDWRULQGHSHQGHQWO\H[DPLQHGDOOUHOHYDQWHOHFWULFDO
HYLGHQFHLQFOXGLQJWKHDSSDUDWXVVXVSHFWHGWRKDYHFDXVHG
WKH2FWREHUILUHEHIRUHFRQFOXGLQJWKDWWKH2FWREHUILUH
ZDVQRWHOHFWULFDO7KXVKDYLQJGHWHUPLQHGWKDWDQHOHFWULFDO
PDOIXQFWLRQGLGQRWFDXVHWKH2FWREHUILUHLQYHVWLJDWRUV
GHVWUR\HGHOHFWULFDOHYLGHQFHDORQJZLWKRWKHULWHPVZKLFK
ZHUH UXOHG QRW WR EH UHOHYDQW RU PDWHULDO WR WKH ILUH
LQYHVWLJDWLRQ 7KH ILUH VFHQH HQFRPSDVVHG RYHU
VTXDUH IHHW RI UHWDLO DQG ZDUHKRXVH VSDFH DQG JLYHQ WKH
HQRUPLW\RISK\VLFDOHYLGHQFHWKDWFRXOGKDYHEHHQSUHVHUYHG
ZHFRQFOXGHDVGLGWKHGLVWULFWFRXUWWKDWWKHLQYHVWLJDWRUV
GLGQRWDFWLQEDGIDLWKE\IDLOLQJWRSUHVHUYHLWHPVWKDWLW
IRXQGQRWWREHWKHVRXUFHRIWKHILUH
$)),50('
1R 8QLWHG6WDWHVY:ULJKW
BBBBBBBBBBBBBBBBBBBBB
&21&855(1&(
BBBBBBBBBBBBBBBBBBBBB
521$/' /(( *,/0$1 &LUFXLW -XGJH FRQFXUULQJ ,
IXOO\FRQFXUZLWKWKHFRXUW¶VFRQFOXVLRQWKDWWKHJRYHUQPHQW¶V
IDLOXUHWRSUHVHUYHWKHHOHFWULFDOHYLGHQFHUHFRYHUHGIURPWKH
2FWREHU:DO0DUWILUHGLGQRWYLRODWH:ULJKW¶VGXH
SURFHVV ULJKW WR DFFHVV H[FXOSDWRU\ HYLGHQFH , ZULWH
VHSDUDWHO\KRZHYHUEHFDXVH,EHOLHYHWKDWWKLVFRXUW¶VNH\
FDVHRQWKHLVVXH8QLWHG6WDWHVY-REVRQ)G WK
&LU PLVDSSOLHV WKH WHVWV VHW IRUWK E\ WKH 6XSUHPH
&RXUW LQ $UL]RQD Y <RXQJEORRG 86 DQG
&DOLIRUQLDY7URPEHWWD86
$FFRUGLQJ WR WKH 6XSUHPH &RXUW ³>W@KH 'XH 3URFHVV
&ODXVHRIWKH)RXUWHHQWK$PHQGPHQWPDNHVWKHJRRGRU
EDG IDLWK RI WKH 6WDWH LUUHOHYDQW ZKHQ WKH 6WDWH IDLOV WR
GLVFORVH WR WKH GHIHQGDQW PDWHULDO H[FXOSDEOH HYLGHQFH´
<RXQJEORRG86DW HPSKDVLVDGGHG 7REHPDWHULDO
DQGH[FXOSDWRU\HYLGHQFHPXVW³SRVVHVVDQH[FXOSDWRU\YDOXH
WKDWZDVDSSDUHQWEHIRUHWKHHYLGHQFHZDVGHVWUR\HGDQGEH
RIVXFKDQDWXUHWKDWWKHGHIHQGDQWZRXOGEHXQDEOHWRREWDLQ
FRPSDUDEOHHYLGHQFHE\RWKHUUHDVRQDEO\DYDLODEOHPHDQV´
7URPEHWWD86DW
%XW WKH 6XSUHPH &RXUW KDV DSSOLHG D GLIIHUHQW WHVW IRU
GHWHUPLQLQJ ZKHWKHU WKH JRYHUQPHQW¶V IDLOXUH WR SUHVHUYH
SRWHQWLDOO\H[FXOSDWRU\HYLGHQFHYLRODWHVWKHGHIHQGDQW¶VULJKW
WR GXH SURFHVV H[SODLQLQJ WKDW ³WKH 'XH 3URFHVV &ODXVH
UHTXLUHVDGLIIHUHQWUHVXOWZKHQZHGHDOZLWKWKHIDLOXUHRIWKH
6WDWHWRSUHVHUYHHYLGHQWLDU\PDWHULDORIZKLFKQRPRUHFDQ
EHVDLGWKDQWKDWLWFRXOGKDYHEHHQVXEMHFWHGWRWHVWVWKH
UHVXOWV RI ZKLFK PLJKW KDYH H[RQHUDWHG WKH GHIHQGDQW´
<RXQJEORRG86DW HPSKDVLVDGGHG 6SHFLILFDOO\
WKH&RXUWVWDWHGWKDW³XQOHVVDFULPLQDOGHIHQGDQWFDQVKRZ
EDG IDLWK RQ WKH SDUW RI WKH SROLFH IDLOXUH WR SUHVHUYH
SRWHQWLDOO\XVHIXOHYLGHQFHGRHVQRWFRQVWLWXWHDGHQLDORIGXH
SURFHVVRIODZ´,GDW HPSKDVLVDGGHG

-- 6 of 6 --