The AI workspace for legal professionals
- Legal research with access to more than 1 million sources
- Document automation
- Matter management
- Hosted in the EU and Switzerland
Try it free for 14 days (10 questions/day during trial)
The AI workspace for legal professionals
Try it free for 14 days (10 questions/day during trial)
99-3146•01a0298p.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
3(7(5 .(9,1 /$1*$1
'HIHQGDQW$SSHOODQW
;!
1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
1R²-RKQ'+ROVFKXK'LVWULFW-XGJH
$UJXHG-XQH
'HFLGHGDQG)LOHG$XJXVW
%HIRUH*8<%2**6DQG*,/0$1&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' & 0DUN 3LFNUHOO 1DVKYLOOH 7HQQHVVHH IRU
$SSHOODQW'DQD03HWHUV$66,67$1781,7('67$7(6
$77251(<&ROXPEXV2KLRIRU$SSHOOHH21%5,()
&0DUN3LFNUHOO1DVKYLOOH7HQQHVVHHIRU$SSHOODQW'DQD
0 3HWHUV 5RE\Q -RQHV +DKQHUW $66,67$17 81,7('
67$7(6$77251(<6&ROXPEXV2KLRIRU$SSHOOHH
-- 1 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
521$/' /(( *,/0$1 &LUFXLW -XGJH 3HWHU .HYLQ
/DQJDQ ZDV FRQYLFWHG E\ D MXU\ RI UREELQJ WZR EDQNV LQ
YLRODWLRQRI86&DQGRIXVLQJILUHDUPVDQGD
GHVWUXFWLYHGHYLFHLQFRPPLWWLQJWKHUREEHULHVLQYLRODWLRQRI
86& F ,Q D VHSDUDWH WULDO FRQFHUQLQJ WKH
FLUFXPVWDQFHVRIKLVDUUHVWRQXQUHODWHGFKDUJHV/DQJDQZDV
FRQYLFWHG RI DVVDXOWLQJ IHGHUDO RIILFHUV LQ YLRODWLRQ RI
86& DQG RI IXUWKHU ILUHDUPV RIIHQVHV /DQJDQ¶V
FRQYLFWLRQVIURPERWKWULDOVZHUHFRQVROLGDWHGIRUVHQWHQFLQJ
SXUSRVHV DQG UHVXOWHG LQ OLIH LPSULVRQPHQW ZLWKRXW WKH
SRVVLELOLW\RISDUROHSOXV\HDUV
2QDSSHDO/DQJDQFODLPVWKDW WKHGLVWULFWFRXUWHUUHG
ZKHQLWH[FOXGHGDSV\FKRORJLVW¶VH[SHUWWHVWLPRQ\RQWKH
UHOLDELOLW\RIH\HZLWQHVVLGHQWLILFDWLRQ WKHHYLGHQFHZDV
LQVXIILFLHQWWRHVWDEOLVKWKDWWKHGHYLFHOHIWDWRQHRIWKHEDQNV
ZDVD³GHVWUXFWLYHGHYLFH´DQG QRQHRIKLVFRQYLFWLRQV
XQGHU86& F VKRXOGEHFRQVLGHUHGD³VHFRQGRU
VXEVHTXHQW´ FRQYLFWLRQ WKDW ZDUUDQWV D PDQGDWRU\ OLIH
VHQWHQFHZLWKRXWSDUROH)RUWKHUHDVRQVVHWIRUWKEHORZZH
$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW
,%$&.*5281'
/DQJDQ ZKR XVHG WKH DOLDV ³&RPPDQGHU 3HGUR´ OHG D
VPDOO ZKLWHVXSUHPDFLVW JURXS NQRZQ DV WKH $U\DQ
5HSXEOLFDQ$UP\ ³$5$´ DQGDWWLPHVDVWKH0LGZHVWHUQ
%DQN%DQGLWV,QKHDQGKLVFKLOGKRRGIULHQG5LFKDUG
³:LOG %LOO´ *XWKULH IRXQGHG WKH $5$ DIWHU DWWHQGLQJ D
&KULVWLDQ,GHQWLW\PHHWLQJ7KH$5$ZDVDFRS\FDWQHR
1D]L JURXS LQVSLUHG E\ WKH ERRN 7KH 6LOHQW %URWKHUKRRG
ZKLFKGHWDLOHGWKHH[SORLWVRIDQXQGHUJURXQGJXHUULOODEDQN
UREEHU\JDQJNQRZQDV³7KH2UGHU´,QWKHPLGVWKH
$5$FRPPLWWHGDQXPEHURIEDQNUREEHULHVWKURXJKRXWWKH
PLGZHVW WR VXSSRUW WKHLU DYRZHG SXUSRVH RI FRPPLWWLQJ
WHUURULVWDFWVDJDLQVWWKH8QLWHG6WDWHVJRYHUQPHQW$SRUWLRQ
-- 2 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
& /DQJDQ¶VOLIHVHQWHQFHXQGHU86& F
$V KLV ILQDO FODLP RI HUURU /DQJDQ PDLQWDLQV WKDW WKH
GLVWULFW FRXUW LPSURSHUO\ HQKDQFHG KLV VHQWHQFH XQGHU
86& F 6SHFLILFDOO\ /DQJDQ REMHFWV WR WKH
WUHDWPHQW RI &RXQWV DQG DV ³VHFRQG RU VXEVHTXHQW
FRQYLFWLRQV´DUJXLQJLQ³JRRGIDLWK´WKDWKLVOLIHVHQWHQFH
VKRXOG EH UHYHUVHG 7KH GLVWULFW FRXUW¶V DSSOLFDWLRQ RI
86& F LVDTXHVWLRQRIODZZKLFKZHUHYLHZGH
QRYR6HH8QLWHG6WDWHVY'HDO)G WK
&LU DII G86
/DQJDQIUDQNO\DFNQRZOHGJHVWKDWWKHEDVLVRIKLVREMHFWLRQ
LVLQGLUHFWFRQIOLFWZLWKWKH6XSUHPH&RXUW¶VKROGLQJLQ'HDO
Y8QLWHG6WDWHV86 $VWKH6XSUHPH&RXUW
H[SODLQHGLIDGHIHQGDQWLVFKDUJHGZLWKDQGFRQYLFWHGRI
VHSDUDWH RIIHQVHV WR ZKLFK F DSSOLHV WKH VHSDUDWH
FRQYLFWLRQVRQWKHDVVRFLDWHG F FRXQWVFDQEHXVHGWR
GHWHUPLQH SUHYLRXV DQG VXEVHTXHQW FRQYLFWLRQV 6HH 'HDO
86DW %HFDXVH/DQJDQZDVFRQYLFWHGRI
WKHWZRVHSDUDWHDQGGLVWLQFWDUPHGUREEHU\YLRODWLRQVKLV
F FRQYLFWLRQVUHODWLQJWRWKRVHXQGHUO\LQJYLRODWLRQV
TXDOLI\ DV D SUHYLRXV DQG VXEVHTXHQW FRQYLFWLRQ
1HYHUWKHOHVV/DQJDQDUJXHVWKDW'HDOVKRXOGEHRYHUUXOHG
:HDUHRIFRXUVHZLWKRXWDXWKRULW\WRGLVUHJDUGFRQWUROOLQJ
6XSUHPH&RXUWSUHFHGHQW/DQJDQ¶VFKDOOHQJHWRKLVVHQWHQFH
LVWKHUHIRUHUHMHFWHG$FFRUGLQJO\WKHGLVWULFWFRXUWGLGQRW
HUULQHQKDQFLQJ/DQJDQ¶VVHQWHQFHIRUWKHVHFRQG F
FRQYLFWLRQ
,,,&21&/86,21
)RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH
MXGJPHQWRIWKHGLVWULFWFRXUW
1R 8QLWHG6WDWHVY/DQJDQ
RIWKHSURFHHGVIURPWKHEDQNUREEHULHVZDVWKHQIXQQHOHGWR
VLPLODU QHR1D]L FDXVHV ZKLOH WKH UHPDLQGHU ZDV XVHG WR
ILQDQFHIXWXUHUREEHULHV%HIRUHKLVWULDO/DQJDQLQIRUPHGD
3UHWULDO6HUYLFHV2IILFHUWKDWKHKDGEHHQD³VHOIHPSOR\HG
UHYROXWLRQDU\´ ZLWK WKH JRDO RI ³RYHUWKURZLQJ WKH
JRYHUQPHQW´
,QWKHIDOORI/DQJDQZHQWXQGHUJURXQGEUHDNLQJRII
DOOFRQWDFWZLWKKLVIDPLO\DQGIULHQGVDQGVWD\LQJLQYDULRXV
PRWHOV /DQJDQ *XWKULH DQG DQ DVVRFLDWH 6KDZQ .HQQ\
DWWHPSWHG WR URE 6RFLHW\ 1DWLRQDO %DQN ³61%´ LQ
6SULQJGDOH 2KLR GXULQJ WKLV SHULRG $UPHG DQG ZHDULQJ
EXOOHWSURRIYHVWVWKH\GURYHWRWKHEDQN7KH\EURXJKWZLWK
WKHP GLVJXLVHV D PRFN H[SORVLYH GHYLFH DQG D SROLFH
VFDQQHU )RU UHDVRQV QRW PDGH FOHDU LQ WKH UHFRUG WKH\
DEDQGRQHGWKHLUSODQVWRUREWKHEDQNRQWKHGD\LQTXHVWLRQ
2Q-XQHKRZHYHU61%ZDVUREEHGVKRUWO\DIWHULW
RSHQHG7KHUREEHU\ZDVFDUULHGRXWE\WZRDUPHGJXQPHQ
ZHDULQJ5LFKDUG1L[RQDQG5RQDOG5HDJDQPDVNV2QHRI
WKHUREEHUVRUGHUHGHYHU\RQHWRWKHIORRUDQGUHPRYHGPRQH\
IURPWKHWHOOHUGUDZHUVZKLOHWKHRWKHUJXQPDQVWRRGZDWFK
LQ WKH OREE\ RI WKH EDQN 7KH UREEHUV VWROH LQ
IHGHUDOO\LQVXUHGIXQGVWKDWZHUHDWWDFKHGWRDG\HSDFN$
G\HSDFNLVDVDIHW\GHYLFHWKDWLVGLVJXLVHGDVDQRUGLQDU\
XQXVHGSDFNRIFXUUHQF\6RRQDIWHULWSDVVHVWKURXJKWKH
PDJQHWLFILHOGRIWKHEDQN¶VGRRUVWKHG\HSDFNLVGHVLJQHG
WRH[SORGHUHOHDVLQJUHGVPRNHWHDUJDVDQGUHGG\H
:KLOHWKHUREEHUVZHUHGULYLQJDZD\IURP61%LQDEURZQ
&KHY\&LWDWLRQWKHG\HSDFNH[SORGHG7KHUREEHUVWKUHZ
VRPHRIWKHPRQH\RXWRIWKHZLQGRZDVWKH\IOHGWKHVFHQH
7KH\WKHQDEDQGRQHGWKHJHWDZD\FDUOHVVWKDQDEORFNIURP
WKHEDQN7KHFDUZDVODWHUGLVFRYHUHGWREHUHJLVWHUHGWR³(G
0F0DKRQ´ RQH RI *XWKULH¶V DOLDVHV ,QVLGH WKH FDU WKH
SROLFHUHFRYHUHGD0DUNSUDFWLFHKDQGJUHQDGHDELOO
ZLWKUHGG\HVWDLQDQGDSROLFHVFDQQHU
/DWHUWKDWPRQWK*XWKULHPHWZLWK.HQQ\LQ&LQFLQQDWLDQG
JDYH KLP DSSUR[LPDWHO\ WR FRPSHQVDWH KLP IRU KLV
³HDUOLHUYHQWXUHV´LQFOXGLQJWKHDERUWHGDWWHPSWWRURE61%
-- 3 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
LQWKHIDOORI 7KHPRQH\ZDVVWDLQHGZLWKUHGG\H
*XWKULH LQIRUPHG .HQQ\ WKDW KH DQG /DQJDQ KDG EHHQ
VXFFHVVIXOLQUREELQJWKHEDQNRQWKHLUVHFRQGDWWHPSWDQG
WKDWWKH\KDGXVHGD³WDNHRYHU´FRPPDQGVW\OHDVHPSOR\HG
E\³7KH2UGHU´EDQGLWVLQ7KH6LOHQW%URWKHUKRRG
)RXUPRQWKVODWHURQWKHPRUQLQJRI2FWREHUWZR
PDVNHGPHQUREEHGWKH&ROXPEXV1DWLRQDO%DQN ³&1%´
VRRQDIWHULWRSHQHG*XWKULHKDGSXUFKDVHGDFDOLEHUULIOH
LQWKH&ROXPEXVDUHDRQWKHSUHYLRXVGD\'XULQJWKH&1%
UREEHU\WKHJXQPHQZRUHFRQVWUXFWLRQRYHUDOOVVNLPDVNV
KDUGKDWVVXQJODVVHVDQGJORYHV7KHPHQRUGHUHGHYHU\RQH
WRWKHIORRUDQGVKRXWHGWRRQHDQRWKHUXVLQJ6SDQLVKSKUDVHV
VXFKDV³DQGDOHDQGDOH´DQG³ODERPED´$W/DQJDQ¶VWULDO
.HQQ\WHVWLILHGWKDWWKLVGLYHUVLRQDU\WHFKQLTXHZDVXVHGE\
WKH ZKLWH VXSUHPDFLVWV LQ 7KH 6LOHQW %URWKHUKRRG LQ DQ
DWWHPSW WR GLYHUW WKH DWWHQWLRQ RI DXWKRULWLHV E\ SDVVLQJ
WKHPVHOYHVRIIDV+LVSDQLF2QHRIWKHUREEHUVUHPDLQHGLQ
WKHOREE\WRFRQWUROWKHFXVWRPHUVZKLOHWKHRWKHUGUHZKLV
JXQDQGMXPSHGRYHUWKHFRXQWHUWRFROOHFWWKHPRQH\$VKH
ZDVWDNLQJWKHPRQH\IURPWKHWHOOHUGUDZHUVKHUHPRYHGKLV
VNLPDVNKDUGKDWDQGVXQJODVVHVDQGOHIWWKHPRQDWHOOHU
FRXQWHU7KHUREEHUVVWROHLQIHGHUDOO\LQVXUHGIXQGV
IURPWKHEDQN
&1%¶V DVVLVWDQW PDQDJHU /LVD &RSOH\ ODWHU LGHQWLILHG
/DQJDQDVWKHUREEHU&RSOH\WHVWLILHGDW/DQJDQ¶VWULDOWKDW
VKHKDGVHHQKLVIDFHFOHDUO\IRUDERXWWKUHHVHFRQGVDVKH
SURJUHVVHG GRZQ WKH WHOOHU OLQH :KHQ KH WRRN RII WKH
GLVJXLVH /DQJDQ ZDV DSSUR[LPDWHO\ IRXU IHHW DZD\ IURP
&RSOH\EXWKHFDPHZLWKLQ³WRXFKLQJGLVWDQFH´DVKHHPSWLHG
WKHGUDZHUV6KHVDZKLPDJDLQZKHQKHUHWXUQHGWRKHUDUHD
DIWHUDWWHPSWLQJWRVWHDOPRQH\IURPWKHGULYHXSZLQGRZ
)ROORZLQJ WKH LQFLGHQW &RSOH\ GHVFULEHG WKH UREEHU DV D
ZKLWHPDOHLQKLVPLGWKLUWLHVZHLJKLQJSRXQGVIHHW
LQFKHVWDOOFOHDQVKDYHQZLWKGDUNKDLUDQGDPHGLXPEXLOG
$IWHUWKHJXQPHQH[LWHG&1%DEODFNOXQFKER[FRQWDLQLQJ
DSODVWLFSLSHFRYHUHGZLWKZLUHVZDVGLVFRYHUHGEHKLQGD
FRXQWHU7KHERPEZDVOHIWDWWKHVFHQHWRVRZFRQIXVLRQDQG
1R 8QLWHG6WDWHVY/DQJDQ
KDG UHOLHG XSRQ %XUPHLVWHU¶V FKHPLFDO DQDO\VLV RI WKH
VPRNHOHVVSRZGHUDQGWKHQGHWHUPLQHGWKDWWKHH[SORVLYH
KDG EHHQ FRQILQHG LQ WKH SODVWLF SLSH HQFORVHG LQ WKH
OXQFKER[$VVXFKKHWHVWLILHGWKDWWKHGHYLFHZDVFDSDEOHRI
H[SORVLRQ E\ EHLQJ WKURZQ RU GURSSHG HYHQ LI LW GLG QRW
FRQWDLQDQ³DSSDUHQWFODVVLFLQLWLDWRU´+HDOVRIRXQGWKDWWKH
GHYLFHZDVHTXLSSHGZLWKDQHOHFWULFFLUFXLWKRRNHGWRDSDJHU
DQGSRZHUHGE\WZRQLQHYROWEDWWHULHVDVZHOODVDPHUFXU\
VZLWFK%DVHGRQWKHVHILQGLQJV+HFNPDQFRQFOXGHGWKDWWKH
GHYLFH ZDV LQ IDFW D SLSH ERPE ZKLFK LV GHILQHG DV WKH
SXUSRVHIXOFRQWDLQPHQWRIDQH[SORVLYHPL[WXUHLQRUGHUWR
DFKLHYHGHWRQDWLRQ6HH86& D 86&
I
/DQJDQQH[WFRQWHQGVWKDWWKHGHYLFHZDVQRWFDSDEOHRI
EHLQJUHDGLO\PDGHRSHUDEOHEHFDXVHLWVZLUHVZHUHLQVXODWHG
DQGKDGQRWEHHQVROGHUHGWRWKHSDJHU+HFNPDQKRZHYHU
WHVWLILHGWKDWLWZRXOGRQO\WDNHDIHZVHFRQGVWRUHFULPSWKH
ZLUHVDQGVWULSWKHPSURSHUO\7KH&1% GHYLFH WKHUHIRUH
EHDUVVLJQLILFDQWVLPLODULWLHVWRWKHGHYLFHLQ7XUF]\N$VLQ
WKHFDVHEHIRUH XVWKHSXWDWLYHSLSHERPELQ 7XUF]\NKDG
EHHQIUDJPHQWHGE\WKHERPEVTXDGDQGJRYHUQPHQWH[SHUWV
ZHUH XQDEOH WR DVFHUWDLQ ZKHWKHU WKH FLUFXLWU\ ZRXOG KDYH
DFKLHYHGGHWRQDWLRQ6HH7XUF]\N:/DW
([SODLQLQJ WKDW WKH VWDWXWH GLG QRW GHPDQG WKDW WKH GHYLFH
RSHUDWHDVLQLWLDOO\LQWHQGHGEXWWKDWLWZDVHQRXJKWKDWLWEH
UHDGLO\FRQYHUWLEOHLQWRDGHVWUXFWLYHGHYLFHWKH7XUF]\NFRXUW
SRLQWHGRXWWKDWWKHUHKDGEHHQWHVWLPRQ\WKDW³HYHQLIWKH
FLUFXLWU\ZHUHUHPRYHGWKHGHYLFHFRXOGIXQFWLRQE\PHUHO\
FRQQHFWLQJWKHWZRZLUHOHDGVWRDQ\HOHFWULFDOVRXUFHRQD
FDU´,G7KLVFRQYHUVLRQZRXOGKDYHUHTXLUHGFRQVLGHUDEO\
PRUH HIIRUW WKDQ WKH FRQYHUVLRQ +HFNPDQ SURSRVHG FRXOG
KDYHEHHQSHUIRUPHGRQWKH&1%GHYLFH*LYHQWKHDERYH
HYLGHQFHLWZDVUHDVRQDEOHIRUWKHMXU\WRKDYHIRXQGEH\RQG
D UHDVRQDEOH GRXEW WKDW WKH &1% SLSH ERPE ZDV LQGHHG D
GHVWUXFWLYHGHYLFHZKLFKFRQWDLQHGDQH[SORVLYHPL[WXUHDQG
ZDVFDSDEOHRIH[SORVLRQ
-- 4 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
XVHGDQ³LQRSHUDEOHFLUFXLWEDGVZLWFKHVDQGGHDGEDWWHU\´
DQGKDGLQWHQGHGIRULWWREHLQRSHUDEOH
0RUHRYHU WKH JRYHUQPHQW QHHG QRW HVWDEOLVK WKDW DQ\
SDUWLFXODUFRPSRQHQWEHSUHVHQWIRUDGHYLFHWRTXDOLI\DVD
GHVWUXFWLYHGHYLFH7KHRQO\UHTXLUHPHQWLVWKDWWKHGHYLFHEH
FDSDEOH RI H[SORGLQJ RU EH UHDGLO\ PDGH WR H[SORGH 6HH
8QLWHG6WDWHVY:LOVRQ1R:/
WK&LU6HSW XQSXEOLVKHGWDEOHGHFLVLRQ ³>:@H
GRQRWUHDGWKHVHFDVHVDVUHTXLULQJWKHJRYHUQPHQWWRSURYH
EH\RQGDUHDVRQDEOHGRXEWWKDWHDFKFRPSRQHQWLVSUHVHQW
LQVWHDG WKH JRYHUQPHQW¶V EXUGHQ LV WR SURYH EH\RQG D
UHDVRQDEOHGRXEWWKDWWKHGHYLFHVDUHGHVWUXFWLYHRUFRXOGEH
UHDGLO\PDGHVR´
/DQJDQPDLQWDLQVWKDWWKHJRYHUQPHQWIDLOHGWRVKRZWKDW
WKH GHYLFH FRQWDLQHG DQ H[SORVLYH PDLQ FKDUJH 7KH
JRYHUQPHQWFRXQWHUVWKDWWKHWHVWLPRQ\SURYLGHGE\IRUHQVLF
FKHPLVW %XUPHLVWHU DQG KD]DUGRXV GHYLFHV DQG H[SORVLYHV
H[DPLQHU+HFNPDQHVWDEOLVKHGWKDWWKH&1%SLSHERPEKDG
WKHUHTXLVLWHHOHPHQWVRID³GHVWUXFWLYHGHYLFH´LQFOXGLQJDQ
H[SORVLYH PDLQ FKDUJH D FRQWDLQHU DQG D PHWKRG RI
LQLWLDWLRQ
%XUPHLVWHUWHVWLILHGWKDWEDVHGRQKLVIRUHQVLFDQDO\VLVWKH
SRZGHUFRQWDLQHGZLWKLQWKH&1%GHYLFHZDV³QRQSHUIRUDWHG
GLVNGRXEOHEDVHGVPRNHOHVVSRZGHU>DQG@DFRPSRVLWLRQ
RIFDOFLXPVXOIDWHFDOFLXPFDUERQDWHVLOLFRQGLR[LGH>@DV
ZHOODVDQDOXPLQXPFRQWDLQLQJPDWHULDO´:KHQKHDWVKRFN
RU IULFWLRQ LV DSSOLHG WR QRQSHUIRUDWHG GLVN GRXEOHEDVHG
VPRNHOHVVSRZGHUFRQWDLQHGZLWKLQDSODVWLFSLSH%XUPHLVWHU
RSLQHG WKDW LW LV FDSDEOH RI H[SORGLQJ /DQJDQ IDXOWV
%XUPHLVWHUIRUIDLOLQJWRVXEMHFWWKHSRZGHUWRIXUWKHUWHVWLQJ
EDVHGRQLWVFRQWDLQLQJDZKLWHLQHUWPL[WXUHLQDGGLWLRQWR
VPRNHOHVVSRZGHU$WWULDOKRZHYHU%XUPHLVWHUWHVWLILHG
WKDWDOWKRXJKWKHDGGLWLRQDOPDWHULDOVZHUHQRWH[SORVLYHV
WKH\ ZRXOG QRW DIIHFW WKH H[SORVLYH SURSHQVLWLHV RI WKH
VPRNHOHVVSRZGHU
7KHJRYHUQPHQWWKHQSUHVHQWHG+HFNPDQZKRDGGUHVVHG
WKHHQJLQHHULQJDVSHFWVRIWKHGHYLFH+HFNPDQVWDWHGWKDWKH
1R 8QLWHG6WDWHVY/DQJDQ
IXUWKHUGLYHUWSROLFHDWWHQWLRQ$ERPEVTXDGZDVFDOOHGWR
WKHVFHQHDQGWKHEDQNZDVHYDFXDWHG8SRQDUULYDODWWKH
EDQN ERPE VTXDG SHUVRQQHO SKRWRJUDSKHG WKH GHYLFH DQG
WKHQXVHGD1XWUH['LVUXSWRUZDWHUFDQQRQWRUHQGHUWKHSLSH
ERPEVDIH7KH'LVUXSWRUVHSDUDWHGWKHFRPSRQHQWVRIWKH
ERPEZLWKRXWGHWRQDWLRQ
7KHVH FRPSRQHQWV ZHUH VHQW WR WKH )%, ODERUDWRU\ IRU
DQDO\VLV6WHYHQ%XUPHLVWHUDQ)%,WR[LFRORJLVWFRQGXFWHG
DFKHPLFDODQDO\VLVRQDSRZGHUVDPSOHIURPWKHGHYLFHDQG
FRQFOXGHG WKDW LW ZDV FRPSRVHG RI ³QRQSHUIRUDWHG GLVN
GRXEOHEDVHGVPRNHOHVVSRZGHU´DQGDQRQH[SORVLYHZKLWH
SRZGHU FRQVLVWLQJ RI FDOFLXP VXOIDWH FDOFLXP FDUERQDWH
VLOLFRQGLR[LGHDQGDOXPLQXPFRPSRXQGV$W/DQJDQ¶VWULDO
%XUPHLVWHUZDVTXDOLILHGDVDQH[SHUWLQIRUHQVLFFKHPLVWU\
VSHFLDOL]LQJ LQ WKH DQDO\VLV RI H[SORVLYHV DQG H[SORVLYH
UHVLGXHVLQJHQHUDODQGSLSHERPEVLQSDUWLFXODU+HWHVWLILHG
WKDWVPRNHOHVVSRZGHULVDQH[SORVLYHWKDWLVVHQVLWLYHWRKHDW
VKRFNDQGIULFWLRQDQGDOWKRXJKLWZRXOGEXUQPRUHVORZO\
EHFDXVHRIWKHSUHVHQFHRIWKHQRQH[SORVLYHZKLWHSRZGHULWV
H[SORVLYHSURSHQVLWLHVZHUHRWKHUZLVHXQDIIHFWHG
7KH RWKHU )%, H[SHUW WR WHVWLI\ ZDV 5REHUW +HFNPDQ D
KD]DUGRXVGHYLFHVDQGH[SORVLYHVH[DPLQHUZKRDGGUHVVHG
WKH HQJLQHHULQJ DVSHFWV RI WKH GHYLFH +H H[DPLQHG D
SKRWRJUDSKRIWKHGHYLFHEHIRUHLWZDVUHQGHUHGVDIHDVZHOO
DV WKH UHFRYHUHG GHEULV 5HO\LQJ XSRQ %XUPHLVWHU¶V
FKDUDFWHUL]DWLRQ RI WKH SRZGHU PL[WXUH DV DQ H[SORVLYH
+HFNPDQ GHWHUPLQHG WKDW WKH GHYLFH ZDV FDSDEOH RI
H[SORVLRQ)XUWKHUPRUHKHGHWHUPLQHGWKDWDOWKRXJKLWGLG
QRWFRQWDLQDQ³DSSDUHQWFODVVLFLQLWLDWRU´LWFRXOGH[SORGHE\
PLVKDQGOLQJ DORQH VXFK DV E\ ³GURSSLQJ WKH SLSH´ RQ WKH
JURXQG+HDOVRIRXQGWKDWWKHGHYLFHZDVHTXLSSHGZLWKDQ
HOHFWULFFLUFXLWKRRNHGWRDSDJHUDQGSRZHUHGE\WZRQLQH
YROWEDWWHULHVDVZHOODVDPHUFXU\VZLWFK%DVHGRQWKHVH
ILQGLQJVKHFRQFOXGHGWKDWWKHGHYLFHZDV³REMHFWLYHO\DSLSH
ERPE´
$IWHU EHLQJ TXDOLILHG DV DQ H[SHUW LQ H[SORVLYH DQG
KD]DUGRXV GHYLFHV +HFNPDQ WHVWLILHG WKDW WKH SLSH ERPE
-- 5 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
FRQWDLQHGWKHQHFHVVDU\FRPSRQHQWVIRUDGHVWUXFWLYHGHYLFH
+HZHQWRQWRVWDWHWKDW³SURSHUO\DVVHPEOHGDQGLQLWLDWHG´
WKHGHYLFH³ZRXOGH[SORGHZRXOGFDXVHSURSHUW\GDPDJH
SHUVRQDO LQMXU\ DQG SRVVLEO\ GHDWK´ +HFNPDQ LQGLFDWHG
KRZHYHUWKDWKHFRXOGQRWGHWHUPLQHZKHWKHUWKHPHUFXU\
VZLWFKZDVRSHUDEOHEHIRUHGHVWUXFWLRQEHFDXVHQRWHQRXJK
IUDJPHQWV RI WKH VZLWFK KDG EHHQ UHFRYHUHG WR SURSHUO\
UHFRQVWUXFW WKH VZLWFK +H DOVR WHVWLILHG WKDW WKH ZLUHV
DSSHDUHGQRWWRKDYHEHHQFULPSHGSURSHUO\IRUFRQGXFWLRQ
PDNLQJLWGRXEWIXOZKHWKHUWKLVPHWKRGRIGHWRQDWLRQZRXOG
KDYHEHHQVXFFHVVIXORUKDGHYHQEHHQLQWHQGHG
,Q-DQXDU\RI/DQJDQZDVVHL]HGE\DFRPELQHGVWDWH
IHGHUDOODZHQIRUFHPHQWWHDPRXWVLGHRID³VDIHKRXVH´LQ
&ROXPEXV7KHVDIHKRXVHZDVXVHGE\WKH$5$WRVWRUH
DPPXQLWLRQ ILUHDUPV DQG RWKHU EDQN UREEHU\ HTXLSPHQW
*XWKULHKDGEHHQFDSWXUHGWKUHHGD\VHDUOLHUDQGKDGEHWUD\HG
/DQJDQSURYLGLQJWKHDXWKRULWLHVZLWKFULWLFDOGHWDLOVDERXW
WKHLUEDQNUREEHU\H[SORLWVDQGZLWKWKHORFDWLRQRIWKHLUVDIH
KRXVH %DVHG RQ *XWKULH¶V LQIRUPDWLRQ ODZ HQIRUFHPHQW
RIILFLDOV H[HFXWHG D UDLG RQ WKH SURSHUW\ 7KH RIILFHUV
WHVWLILHGWKDWWKH\VDZ/DQJDQEUDQGLVKLQJDVHPLDXWRPDWLF
KDQGJXQIURPWKHEDFNZLQGRZRIKLVYDQ7KH\WKHQULGGOHG
WKHYDQZLWKPRUHWKDQEXOOHWVEXW/DQJDQVXUYLYHGWKH
JXQILUHZLWKPLQRULQMXULHVDQGZDVSODFHGXQGHUDUUHVW7KLV
GUDPDWLF FRQIURQWDWLRQ ZDV WKH VXEMHFW RI ORFDO WHOHYLVLRQ
QHZV VWRULHV &RSOH\ ZDV DPRQJ WKRVH ZKR VDZ WKH
WHOHYLVLRQFRYHUDJHRI/DQJDQ¶VFDSWXUH6KHWHVWLILHGDWWULDO
WKDW ZKHQ VKH VDZ WKH UHSRUW VKH LQVWDQWO\ WKRXJKW WKDW
/DQJDQZDVWKHVDPHPDQZKRKDGUREEHG&1%
/DZ HQIRUFHPHQW DJHQWV IRXQG VHYHUDO LWHPV LQ WKH VDIH
KRXVHDQGWKHYDQWKDWZHUHFRQQHFWHGWRWKH61%UREEHU\
$ 0DUN JUHQDGH ZDV GLVFRYHUHG LQ D VXLWFDVH WKDW ZDV
LGHQWLILHGDVEHORQJLQJWR/DQJDQ7KHJUHQDGHKDG/DQJDQ¶V
ILQJHUSULQWRQWKHKRVHFODPSDQGZDVVLPLODUWRWKH0DUN
JUHQDGHIRXQGLQWKHJORYHFRPSDUWPHQWRIWKHJHWDZD\FDU
XVHGLQWKH61%UREEHU\$JHQWVDOVRUHFRYHUHGDSDLURI
EOXHDQGZKLWHOHDWKHUJORYHVZLWKUHGG\HVWDLQRQWKHP$Q
)%,FKHPLVWGHWHUPLQHGWKDWWKHFKHPLFDOPDNHXSRIWKHUHG
1R 8QLWHG6WDWHVY/DQJDQ
%DVHG RQ DOO RI WKH FRQVLGHUDWLRQV GLVFXVVHG DERYH ZH
FRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ
SUHFOXGLQJ'U5RVVIURPWHVWLI\LQJDWWULDO
% 6XIILFLHQW HYLGHQFH H[LVWHG WR VKRZ WKDW WKH &1%
ERPEZDVD³GHVWUXFWLYHGHYLFH´
/DQJDQQH[WPDLQWDLQVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFH
WRVXSSRUWDYHUGLFWWKDWWKHKRPHPDGHSLSHERPEOHIWDW
&1%%DQNFRQVWLWXWHGD³GHVWUXFWLYHGHYLFH´DVGHILQHGE\
86& ,Q RUGHU WR FRQYLFW /DQJDQ RI XVLQJ D
GHVWUXFWLYHGHYLFHWKHJRYHUQPHQWKDGWRSURYHWKDWWKHSLSH
ERPEOHIWDWWKHUREEHU\ZDV³DQ\H[SORVLYHLQFHQGLDU\RU
SRLVRQJDV ERPE´86& D $ L RU³DQ\
FRPELQDWLRQRISDUWVHLWKHUGHVLJQHGRULQWHQGHGIRUXVHLQ
FRQYHUWLQJDQ\GHYLFHLQWRDQ\GHVWUXFWLYHGHYLFHGHVFULEHG
LQVXESDUDJUDSK $ DQGIURPZKLFKDGHVWUXFWLYHGHYLFH
PD\ EH UHDGLO\ DVVHPEOHG´ 86& D &
/DQJDQDUJXHVWKDWWKHJRYHUQPHQWIDLOHGWRSURYHWKDWWKH
GHYLFHLQTXHVWLRQZDVRSHUDEOHRUUHDGLO\PDGHRSHUDEOHDQG
WKHUHIRUHGLGQRWTXDOLI\DVD³GHVWUXFWLYHGHYLFH´XQGHUWKH
UHOHYDQWVWDWXWHV
:KHQ FRQVLGHULQJ D FKDOOHQJH RQ GLUHFW DSSHDO WR WKH
VXIILFLHQF\RIWKHHYLGHQFHWRVXVWDLQDFRQYLFWLRQZHPXVW
GHWHUPLQH³ZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKHOLJKW
PRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFW
FRXOGKDYHIRXQGWKHHVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQG
DUHDVRQDEOHGRXEW´-DFNVRQY9LUJLQLD86
HPSKDVLVLQRULJLQDO
7R TXDOLI\ XQGHU WKH VWDWXWH ZH GR QRW UHTXLUH WKDW WKH
GHVWUXFWLYHGHYLFHRSHUDWHDVLQWHQGHG6HH8QLWHG6WDWHVY
5XVKFDPS )G WK &LU ,W LV
VXIILFLHQW IRU WKH JRYHUQPHQW WR VKRZ WKDW WKH GHYLFH ZDV
³UHDGLO\FRQYHUWLEOH´WRDGHVWUXFWLYHGHYLFH6HHLG8QLWHG
6WDWHVY7XUF]\N1R:/ WK
&LU$SULO XQSXEOLVKHGWDEOHGHFLVLRQ ILQGLQJWKDW
D SLSH ERPE ZLWK GXELRXV LQLWLDWRU FLUFXLWU\ TXDOLILHG DV D
GHVWUXFWLYHGHYLFHHYHQWKRXJKWKHGHIHQGDQWWHVWLILHGWKDWKH
-- 6 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
/DQJDQ¶VFRXQVHORQWKLVLVVXH7KHMXU\ZDVWKHUHIRUHDEOH
WR FRQVLGHU WKLV SRVVLEOH ³WUDQVIHUHQFH´ GXULQJ LWV
GHOLEHUDWLRQV,QDGGLWLRQWKHMXU\ZDVFDXWLRQHGDERXWWKH
³VKRUWFRPLQJVDQGWURXEOHVSRWV´RIH\HZLWQHVVLGHQWLILFDWLRQ
LQWKHILQDOMXU\LQVWUXFWLRQV
0RUHRYHU&RSOH\VKRZHGRWKHULQGLFLDRIKDYLQJPDGHD
UHOLDEOHLGHQWLILFDWLRQ+HULQLWLDOGHVFULSWLRQRIWKHVXVSHFW
ZDVFRQVLVWHQWZLWK/DQJDQ¶VRZQSK\VLFDOFKDUDFWHULVWLFV
6KHLPPHGLDWHO\UHFRJQL]HG/DQJDQDVWKHUREEHUZKHQVKH
VDZ KLP RQ WHOHYLVLRQ %HVLGHV KHU UHVSRQVLELOLWLHV DV DQ
DVVLVWDQWPDQDJHUDW&1%&RSOH\DOVRVHUYHGDVDQDYLDWLRQ
HOHFWURQLFVWHFKQLFLDQZLWKWKH$LU)RUFH1DWLRQDO*XDUG+HU
QDWLRQDO JXDUG WUDLQLQJ UHTXLUHG KHU WR SDUWLFLSDWH RQ DQ
DQQXDOEDVLVLQFRPEDWDQGKRVWLOHWKUHDWVLWXDWLRQV'XULQJ
WKHVH H[HUFLVHV VKH UHFHLYHG WUDLQLQJ LQ LGHQWLI\LQJ
LQGLYLGXDOV DWWHPSWLQJ WR HQWHU XQDXWKRUL]HG DUHDV 6KH
WHVWLILHGWKDWDFULWLFDOFRPSRQHQWWRWKLVWUDLQLQJZDVWKHQHHG
WRUHPDLQFDOPDQGIRFXVHGGXULQJWKHDWWHPSWHGWDNHRYHUV
,QOLJKWRIWKLVVSHFLDOL]HGWUDLQLQJ'U5RVV¶VJHQHUDOL]HG
WHVWLPRQ\UHJDUGLQJVXFKGLVWUDFWLQJIDFWRUVDVVWUHVVDQGWKH
SUHVHQFHRIDJXQZRXOGQRWQHFHVVDULO\KDYHKHOSHGWKHMXU\
LQHYDOXDWLQJ&RSOH\¶VLGHQWLILFDWLRQRI/DQJDQ
)LQDOO\ D VXEVWDQWLDO DPRXQW RI RWKHU HYLGHQFH OLQNHG
/DQJDQ WR WKH &1% UREEHU\ 7ZR FRFRQVSLUDWRUV IRU
H[DPSOHWHVWLILHGUHJDUGLQJKLVLQYROYHPHQW:KHQ/DQJDQ
ZDVDUUHVWHGODZHQIRUFHPHQWRIILFLDOVUHFRYHUHGPDVNVDQG
KDUGKDWVVLPLODUWRWKRVHIRXQGLQWKH&1%JHWDZD\FDU$
VLOYHUVHPLDXWRPDWLFSLVWROOLNHWKHRQH&RSOH\LGHQWLILHGDV
XVHGE\/DQJDQDWWKHUREEHU\ZDVDOVRUHFRYHUHGIURPWKH
VDIHKRXVH,QDGGLWLRQDZKLWHSODVWLFSLSHERPEWKDWFORVHO\
UHVHPEOHGWKHRQHXVHGLQWKH&1%UREEHU\ZDVGLVFRYHUHG
LQDVXLWFDVHEHORQJLQJWR/DQJDQDQG/DQJDQ¶VWKXPESULQW
ZDVIRXQGRQERPEPDNLQJHTXLSPHQWLQWKHVDPHVXLWFDVH
7KXVDEXQGDQWHYLGHQFHWRVXSSRUWWKHMXU\¶VYHUGLFWH[LVWHG
HYHQZLWKRXW&RSOH\¶VH\HZLWQHVVLGHQWLILFDWLRQ
1R 8QLWHG6WDWHVY/DQJDQ
G\HZDVWKHVDPHDVWKHG\HIRXQGRQWKHELOOUHFRYHUHG
IURPWKH61%JHWDZD\FDU$5RQDOG5HDJDQPDVNVLPLODU
WR WKH PDVNV ZRUQ GXULQJ WKH 61% UREEHU\ ZDV IRXQG LQ
/DQJDQ¶V YDQ DV ZDV D EODFN OXQFKER[ VLPLODU WR WKH RQH
FRQWDLQLQJWKH&1%SLSHERPE7ZRFRSLHVRI7KH6LOHQW
%URWKHUKRRG ZHUH VHL]HG IURP WKH KRXVH 2IILFHUV DOVR
UHFRYHUHG KDUG KDWV VNL PDVNV DQG VXQJODVVHV WKDW ZHUH
LGHQWLFDOWRWKRVHOHIWEHKLQGDIWHUWKH&1%UREEHU\
2Q )HEUXDU\ D IHGHUDO JUDQG MXU\ UHWXUQHG D
VHYHQFRXQWLQGLFWPHQWFKDUJLQJ/DQJDQZLWK WKH-DQXDU\
DVVDXOWRQIHGHUDORIILFHUVLQYLRODWLRQRI86&
FDUU\LQJDQGXVLQJILUHDUPVLQFRQQHFWLRQWRWKHDVVDXOWLQ
YLRODWLRQRI86& J DQG F DQGIDLOLQJ
WR UHJLVWHU D GHVWUXFWLYH GHYLFH LQ YLRODWLRQ RI 86&
G $ VXSHUVHGLQJ LQGLFWPHQW ZDV UHWXUQHG E\ WKH
JUDQGMXU\RQ0DUFKLQFRUSRUDWLQJWKHFKDUJHVRI
WKHHDUOLHULQGLFWPHQWDQGDOOHJLQJWKDW/DQJDQKDGFRPPLWWHG
WZRFRXQWVRIDUPHGEDQNUREEHU\LQYLRODWLRQRI86&
DQG D G WZRDGGLWLRQDOFRXQWVRIXVLQJDQG
FDUU\LQJDILUHDUPGXULQJDFULPHRIYLROHQFHLQYLRODWLRQRI
86& DQG F DQG RQH FRXQW RI XVLQJ DQG
FDUU\LQJDQH[SORVLYHGHYLFHGXULQJDQGLQUHODWLRQWRDFULPH
RIYLROHQFHLQYLRODWLRQRI86& F 7KHVHODWHU
FKDUJHVDOOUHODWHGWRWKH61%DQG&1%UREEHULHV
2Q0DUFK&RSOH\ZDVLQWHUYLHZHG E\ DQ)%,
DJHQWDQGVKRZQDSKRWRDUUD\6KHLQIRUPHGWKHDJHQWWKDW
VKH KDG VHHQ /DQJDQ RQ WHOHYLVLRQ LQ FRQQHFWLRQ ZLWK WKH
-DQXDU\ VKRRWRXW &RSOH\ ZHQW RQ WR H[SUHVV KHU
FRQFHUQWKDW³,KRSH,GRQ¶WUHFRJQL]HWKLVLQGLYLGXDOIURP
79´ :KHQ VKRZQ WKH SKRWRV KRZHYHU &RSOH\ GLG QRW
KHVLWDWHLQVHOHFWLQJ/DQJDQ¶V,WZDVWKHILUVWDQGRQO\RQH
VKHVHOHFWHGDPRQJWKHDUUD\
/DQJDQILOHGDPRWLRQWRVHYHUWKHEDQNUREEHU\DQGUHODWHG
ILUHDUP FKDUJHV RI WKH VXSHUVHGLQJ LQGLFWPHQW IURP WKH
RULJLQDO DVVDXOW DQG ILUHDUPV FRXQWV 7KH GLVWULFW FRXUW
JUDQWHG KLV PRWLRQUHVXOWLQJLQ/DQJDQEHLQJWULHGLQWZR
VHSDUDWH SURFHHGLQJV /DQJDQ DOVR PRYHG WR H[FOXGH
-- 7 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
&RSOH\¶VWHVWLPRQ\7KHFRXUWGHQLHGWKHPRWLRQDVZHOODV
/DQJDQ¶VPRWLRQWRSUHVHQWWKHH[SHUWWHVWLPRQ\RI'DYLG)
5RVVDSV\FKRORJLVWDWWKH8QLYHUVLW\RI7HQQHVVHH/DQJDQ
VRXJKWWRRIIHU'U5RVV¶VWHVWLPRQ\LQRUGHUWRXQGHUPLQH
&RSOH\¶VH\HZLWQHVVLGHQWLILFDWLRQ
7KH GLVWULFW FRXUW UHFRJQL]HG 'U 5RVV DV DQ H[SHUW LQ
SV\FKRORJ\VROHO\IRUWKHSXUSRVHRIDVXSSUHVVLRQKHDULQJ
UHJDUGLQJ &RSOH\¶V LGHQWLILFDWLRQ RI /DQJDQ ,W UHVHUYHG
UXOLQJRQZKHWKHU'U5RVVZRXOGEHTXDOLILHGWRWHVWLI\DW
WULDOLQWKHVXEVSHFLDOW\RIH\HZLWQHVVLGHQWLILFDWLRQ$WWKH
VXSSUHVVLRQKHDULQJ'U5RVVWHVWLILHGUHJDUGLQJDYDULHW\RI
IDFWRUV WKDW KDG WKH SRWHQWLDO RI DIIHFWLQJ WKH DFFXUDF\ RI
&RSOH\¶VLGHQWLILFDWLRQ7KHVHIDFWRUVLQFOXGHGWKHPRQWK
GHOD\ EHWZHHQ WKH &1% UREEHU\ DQG WKH SKRWR DUUD\ WKH
GLVWUDFWLRQVFUHDWHGE\WKHUREEHU¶VJXQDQGWKHVWUHVVRIWKH
VLWXDWLRQDQGKHUH[SRVXUHWRKLVFDSWXUHRQWHOHYLVLRQQHZV
'U5RVVDOVRFULWLFL]HGWKHLGHQWLILFDWLRQSURFHGXUHVXVHGE\
WKH )%, LQ WKH SKRWR DUUD\ 7KH GLVWULFW FRXUW GHWHUPLQHG
XQGHUWKHWHVWVVHWIRUWKLQ1HLOY%LJJHUV86
WKDW &RSOH\¶V WHVWLPRQ\ ZDV VXIILFLHQWO\
UHOLDEOHWREHSUHVHQWHGWRWKHMXU\DQG /DQJDQKDGIDLOHG
WR PHHW KLV EXUGHQ RI SURYLQJ WKDW WKH SKRWR DUUD\ ZDV
LPSHUPLVVLYHO\VXJJHVWLYH
'U 5RVV ZDV DOVR SUHSDUHG WR RIIHU D PRUH VSHFLILF
GLVFXVVLRQ FRQFHUQLQJ WKH SRVVLELOLW\ RI ³PHPRU\
WUDQVIHUHQFH´ RU ZKDW 'U 5RVV UHIHUUHG WR DV ³FRQVFLRXV
LQIHUHQFH´RU³FRQVFLRXVWUDQVIHUHQFH´7KLVSKHQRPHQRQLV
WKHPLVLGHQWLILFDWLRQRIDIDPLOLDUEXWLQQRFHQWSHUVRQPRUH
FRPPRQO\FDOOHG³XQFRQVFLRXVWUDQVIHUHQFH´ DOWKRXJK'U
5RVVWDNHVLVVXHZLWKWKLVODEHOEDVHGRQKLVWKHRU\RIKRZ
WKHSURFHVVRFFXUVLQWKHEUDLQ 'U5RVV¶VWHVWLPRQ\ZRXOG
KDYH SURSRVHG DQ DOWHUQDWLYH H[SODQDWLRQ IRU &RSOH\¶V
LGHQWLILFDWLRQ VXJJHVWLQJ WKDW &RSOH\ ZDV QRW UHFRJQL]LQJ
/DQJDQIURPWKH &1%UREEHU\EXWLQVWHDGIURPWKHPRUH
UHFHQWWHOHYLVLRQQHZVFRYHUDJHHYHQWKRXJKVKHPD\KDYH
EHOLHYHGWKDWVKHZDVLGHQWLI\LQJ/DQJDQIURPERWK+HKDG
FRDXWKRUHG DQ DUWLFOH RQ WKH VXEMHFW 8QFRQVFLRXV
7UDQVIHUHQFH DQG 0LVWDNHQ ,GHQWLW\ :KHQ D :LWQHVV
1R 8QLWHG6WDWHVY/DQJDQ
$OWKRXJKZHUHFRJQL]HWKDWH[SHUWWHVWLPRQ\RQH\HZLWQHVV
LGHQWLILFDWLRQPLJKWLQIRUPWKHMXU\RQDOORIWKHLQWULFDFLHVRI
SHUFHSWLRQUHWHQWLRQDQGUHFDOOZHQHYHUWKHOHVVDJUHHZLWK
WKHGLVWULFWFRXUWWKDWWKHKD]DUGVRIH\HZLWQHVVLGHQWLILFDWLRQ
DUHZLWKLQWKHRUGLQDU\NQRZOHGJHRIPRVWOD\MXURUV:LWK
UHJDUGWRWKHSRVVLELOLW\WKDW&RSOH\ZDVUHPHPEHULQJ/DQJDQ
IURPWHOHYLVLRQUDWKHUWKDQIURPWKH&1%UREEHU\/DQJDQ¶V
FRXQVHOKDGDPSOHRSSRUWXQLW\WRFURVVH[DPLQHKHURQWKLV
SRLQWDQGLQIDFWGLGVRDWWULDO7KHGLVWULFWFRXUWDOVRZDV
KLJKO\VNHSWLFDORIWKLVVSHFLILFDUHDRIWHVWLPRQ\EHFDXVHRI
WKHOLPLWDWLRQVWKDW'U5RVVKDGSHUVRQDOO\UDLVHGFRQFHUQLQJ
WKH VXEMHFW ,I KH KDG WHVWLILHG DW WULDO LW LV OLNHO\ WKDW DQ
XQLQIRUPDWLYHEDWWOHRIH[SHUWVZRXOGKDYHRFFXUUHGLIWKH
JRYHUQPHQWKDGRIIHUHGLWVRZQH[SHUWWHVWLPRQ\LQRUGHUWR
UHIXWH 'U 5RVV¶V RSLQLRQ DQG WKH MXU\ FRXOG KDYH EHHQ
XQGXO\PLVOHGDQGFRQIXVHG
)XUWKHUPRUHDVWKLVFRXUWQRWHGLQ6PLWKHUVWKHQXPHURXV
FDVHV KROGLQJ WKDW WKH H[FOXVLRQ RI H[SHUW WHVWLPRQ\ RQ
H\HZLWQHVVLGHQWLILFDWLRQLVQRWDQDEXVHRIGLVFUHWLRQFDXWLRQ
XVWRFRQVLGHUZKHWKHUWKHWHVWLPRQ\ZRXOGKDYHEHHQKHOSIXO
RU FRQIXVLQJ WR WKH MXU\ 6HH 6PLWKHUV )G DW
7KHVH ³FDVHV DOVR GLVFXVV ZKHWKHU WKLV W\SH RI WHVWLPRQ\
WRXFKHG RQ WKH μXOWLPDWH LVVXH¶ LQ WKH FDVH DQG WKHUHIRUH
XVXUSHG WKH MXU\¶V UROH ZKHWKHU WKHUH ZDV RWKHU HYLGHQFH
DJDLQVW WKH GHIHQGDQW DQG ZKHWKHU WKH MXU\ FRXOG PRUH
SURSHUO\ HYDOXDWH WKH UHOLDELOLW\ RI H\HZLWQHVV WHVWLPRQ\
WKURXJKFURVVH[DPLQDWLRQ´,G
2XU FRQFOXVLRQ WKDW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV
GLVFUHWLRQ LQ WKLV FDVH LV IXUWKHU VXSSRUWHG E\ WKH IDFW WKDW
/DQJDQ KDG WKH RSSRUWXQLW\ WR WKRURXJKO\ FURVVH[DPLQH
&RSOH\LQRUGHUWRFDVWGRXEWRQKHUDELOLW\WRLGHQWLI\KLP
$V ZH KDYH H[SODLQHG ZHDNQHVVHV LQ H\HZLWQHVV
LGHQWLILFDWLRQWHVWLPRQ\RUGLQDULO\ FDQEHH[SRVHGWKURXJK
FDUHIXOFURVVH[DPLQDWLRQRIWKHH\HZLWQHVV&RSOH\KHUVHOI
ZDV WKH RQH ZKR H[SUHVVHG LQLWLDO FRQFHUQ WKDW VKH ZDV
UHPHPEHULQJ/DQJDQIURPKLVDSSHDUDQFHRQWHOHYLVLRQ6KH
EURXJKWXSWKLVSRVVLELOLW\GXULQJKHUGLUHFWH[DPLQDWLRQE\
WKHJRYHUQPHQWDQGVKHZDVWKRURXJKO\FURVVH[DPLQHGE\
-- 8 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
TXDOLI\DVDQH[SHUWLQWKHVXEVSHFLDOW\RI³DGXOWH\HZLWQHVV
LGHQWLILFDWLRQV´ EHFDXVH WKH EXON RI 'U 5RVV¶V UHVHDUFK
IRFXVHGRQFKLOGH\HZLWQHVVWHVWLPRQ\'U5RVVKRZHYHU
KDG SXEOLVKHG DUWLFOHV HGLWHG ERRNV DQG JLYHQ OHFWXUHV
GHDOLQJVSHFLILFDOO\ZLWKPLVLGHQWLILFDWLRQLQDGXOWZLWQHVVHV
7KH IDFW WKDW KH KDV VSHQW PRUH WLPH DQG HIIRUW VWXG\LQJ
FKLOGUHQ VKRXOG QRW KDYH GLVTXDOLILHG KLP IURP WHVWLI\LQJ
DERXW WKH PLVLGHQWLILFDWLRQ SKHQRPHQRQ LQ DGXOWV 7R
GHPDQG WKDW WKHUH EH D VSHFLILF TXDOLILFDWLRQ LQ ³DGXOW
H\HZLWQHVVLGHQWLILFDWLRQ´LVXQMXVWLILHGXQOHVVWKHUHH[LVWV
VRPHSULQFLSOHGGLVWLQFWLRQEHWZHHQWKHPHWKRGVWKHRU\DQG
UHVXOWV XVHG LQ WKH VWXG\ RI PLVLGHQWLILFDWLRQ E\ DGXOWV DV
RSSRVHGWRPLVLGHQWLILFDWLRQE\FKLOGUHQ
'HVSLWHRXUKHVLWDWLRQWRDGRSW DOO RIWKHGLVWULFWFRXUW¶V
FULWLFLVPVFRQFHUQLQJ'U5RVV¶VSURIIHUHGWHVWLPRQ\XQGHU
WKH³VFLHQWLILFNQRZOHGJH´SURQJRI'DXEHUWZHDJUHHWKDWLW
IDLOHGWRVDWLVI\WKHVHFRQG'DXEHUWLQTXLU\7KLVVHFRQGVWHS
UHTXLUHVWKHGLVWULFWFRXUWWRFRQVLGHUZKHWKHUWKHSURSRVHG
VFLHQWLILF HYLGHQFH ILWV WKH LVVXH WR ZKLFK WKH H[SHUW LV
WHVWLI\LQJ6HH'DXEHUW86DW,QRWKHUZRUGVD
GLVWULFWFRXUWPD\DGPLWWKHHYLGHQFHRQO\LIVXFKWHVWLPRQ\
ZLOODVVLVWWKHWULHURIIDFWLQXQGHUVWDQGLQJWKHHYLGHQFHRULQ
GHWHUPLQLQJDIDFWDWLVVXH7KHSURSRVHGWHVWLPRQ\PXVWWKXV
³ILW´WKHH\HZLWQHVVLGHQWLILFDWLRQLQWKLVFDVH
'U5RVV¶VSURSRVHGWHVWLPRQ\ZDVEHLQJRIIHUHGLQRUGHU
WRLPSHDFK&RSOH\¶VLGHQWLILFDWLRQRI/DQJDQ+LVWHVWLPRQ\
KRZHYHU ZRXOG QRW KDYH EHHQ EDVHG RQ DQ\ SHUVRQDO
NQRZOHGJHRI&RSOH\EXWUDWKHURQKLVJHQHUDONQRZOHGJH
DERXW WKH W\SH RI FLUFXPVWDQFHV LQ ZKLFK VKH KDG IRXQG
KHUVHOI 'U 5RVV ZRXOG KDYH WHVWLILHG WR WKH OLPLWDWLRQV
UHJDUGLQJ&RSOH\¶VDELOLW\WRVHHDQGLGHQWLI\WKHEDQNUREEHU
GXULQJWKHUREEHU\KHUDELOLW\WRLGHQWLI\WKHUREEHUHLJKWHHQ
PRQWKV DIWHU WKH UREEHU\ WKH WUDQVIHUHQFH SKHQRPHQRQ
UHODWHGWRKHUKDYLQJVHHQ/DQJDQRQWHOHYLVRQSULRUWRWKH
SKRWRDUUD\DQGWKH³SV\FKRORJLFDOO\EDVHGZHDNQHVVHVLQWKH
PHWKRGXVHGE\WKH)%,DWWKHSKRWRDUUD\´
1R 8QLWHG6WDWHVY/DQJDQ
0LVLGHQWLILHVD)DPLOLDUEXW,QQRFHQW3HUVRQ-RXUQDORI
$SSOLHG3V\FKRORJ\
)ROORZLQJD'DXEHUWKHDULQJWKHGLVWULFWFRXUWUHIXVHGWR
DOORZ'U5RVVWRWHVWLI\DWWULDODVDQH[SHUWLQH\HZLWQHVV
LGHQWLILFDWLRQ7KHFRXUWGHWHUPLQHGWKDW'U5RVV¶VSURSRVHG
WHVWLPRQ\IDLOHGWRPHHWWKHUHTXLUHPHQWVRI5XOHRIWKH
)HGHUDO5XOHVRI(YLGHQFHDVLQWHUSUHWHGE\'DXEHUWDQGLWV
SURJHQ\ 8VLQJ WKH WZRSDUW WHVW GHYHORSHG LQ 'DXEHUW Y
0HUUHOO'RZ3KDUPDFHXWLFDOV,QF86 WKH
GLVWULFWFRXUWFRQFOXGHGWKDW'U5RVV¶VSURSRVHGWHVWLPRQ\
RQ WKH IDFWRUV LQIOXHQFLQJ H\HZLWQHVV DFFXUDF\ ZRXOG QRW
KDYHDVVLVWHGWKHMXU\,QVWHDGWKHFRXUWGHWHUPLQHGWKDWDQ\
WHVWLPRQ\ RIIHUHG E\ 'U 5RVV ZRXOG KDYH LPSURSHUO\
LQYDGHGWKHLUSURYLQFH
7KH GLVWULFW FRXUW DOVR KHOG WKDW 'U 5RVV¶V WHVWLPRQ\
FRQFHUQLQJWKHWUDQVIHUHQFHWKHRU\ZDVQRWVXIILFLHQWO\EDVHG
RQ ³VFLHQWLILF NQRZOHGJH´ EHFDXVH LW IDLOHG WR PHHW WKH
UHOLDELOLW\ VWDQGDUGV HVWDEOLVKHG E\ 'DXEHUW &LWLQJ 'U
5RVV¶VRZQDUWLFOHWKHFRXUWQRWHGWKDW'U5RVVKDG
SHUVRQDOO\FDOOHGWKHWKHRU\LQWRTXHVWLRQZKHQFRPPHQWLQJ
WKDW WKH ³OLWHUDWXUH SURYLGHV PL[HG DQG VRPHZKDW ZHDN
VXSSRUWIRUXQFRQVFLRXVWUDQVIHUHQFH´DQGWKDW³WKHHPSLULFDO
HYLGHQFHIRUWKH>WKHRU\¶V@H[LVWHQFHLVUDWKHUPHDJHU´7KH
GLVWULFWFRXUWSRLQWHGRXWWKDWHYHQWKRXJK'U5RVVZDVJLYHQ
WKHRSSRUWXQLW\DWWKHVXSSUHVVLRQKHDULQJWRVWDWHWKDWWKH
WKHRU\ZDVVFLHQWLILFDOO\VRXQGKHIDLOHGWRHIIHFWLYHO\UHEXW
WKHJRYHUQPHQW¶VFULWLFLVPRIWKHWKHRU\0RUHRYHUWKHFRXUW
IRXQGWKDW'U5RVV¶VPHWKRGRORJLHVZHUHLQDGHTXDWHEHFDXVH
KH KDG QHYHU VWXGLHG DQ\ YLFWLP RU H\HZLWQHVV RI D EDQN
UREEHU\
)LQDOO\ WKH GLVWULFW FRXUW TXHVWLRQHG 'U 5RVV¶V
TXDOLILFDWLRQV LQ WKH VSHFLILF ILHOG RI ³DGXOW H\HZLWQHVV
LGHQWLILFDWLRQ´,WQRWHGWKDWWKHJUHDWPDMRULW\RI'U5RVV¶V
ZRUN KDG IRFXVHG RQ FKLOG H\HZLWQHVV LGHQWLILFDWLRQ 7KH
FRXUWDOVRIRXQGLWVLJQLILFDQWWKDW'U5RVVKDGEHHQTXDOLILHG
WRWHVWLI\DVDQH[SHUWRQO\RQFHEHIRUHDQGLQWKDWLQVWDQFH
-- 9 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
KLVWHVWLPRQ\UHODWHGWRDFKLOGH\HZLWQHVVLQDVWDWHFRXUW
SURFHHGLQJ
'XULQJ WKH GD\ MXU\ WULDO WKH JRYHUQPHQW SUHVHQWHG
PRUH WKDQ ZLWQHVVHV 7KH PRVW LPSRUWDQW RI WKHVH
ZLWQHVVHV ZHUH WZR RI /DQJDQ¶V FRFRQVSLUDWRUV 6KDZQ
.HQQ\DQG.HYLQ0F&DUWK\.HQQ\KDGEHHQDIILOLDWHGZLWK
WKH$5$IURPWKHWLPHLWEHJDQRSHUDWLRQVDQGKDGEHHQSDUW
RIWKH³GU\UXQ´DWWKH61%LQ*XWKULH/DQJDQ¶VFKLHI
FRKRUWKDGWROG.HQQ\WKDWWKHVHFRQGDWWHPSWDW61%KDG
SURYHG VXFFHVVIXO $V FRPSHQVDWLRQ IRU .HQQ\¶V HIIRUWV
*XWKULHSDLGKLPZLWKUHGWLQWHGPRQH\0F&DUWK\DQ$5$
PHPEHUZKRZDVUHFUXLWHGVKRUWO\DIWHUWKH&1%UREEHU\
WHVWLILHG WKDW /DQJDQ WROG KLP WKDW /DQJDQ KDG LQMXUHG KLV
NQHHZKLOHMXPSLQJRYHUDWHOOHUFRXQWHUDQGORVWKLVPDVN
GXULQJDQHDUOLHUUREEHU\*XWKULHZDVWRKDYHEHHQDZLWQHVV
DWWKHWULDOEXWKHKXQJKLPVHOILQKLVSULVRQFHOOLQ-XO\RI
7KHJRYHUQPHQWDOVRSUHVHQWHGVXEVWDQWLDOSK\VLFDO
HYLGHQFHUHFRYHUHGIURPWKHVDIHKRXVHWKDWWLHG/DQJDQWR
WKHUREEHULHV
,Q)HEUXDU\RIWKHMXU\IRXQG/DQJDQJXLOW\RQDOO
FRXQWVUHODWHGWRWKHWZREDQNUREEHULHV/DQJDQZDVIRXQG
JXLOW\E\DVHFRQGMXU\LQ2FWREHURIRQFKDUJHVUHODWHG
WRWKHDVVDXOWRQIHGHUDORIILFHUV)RUVHQWHQFLQJSXUSRVHV
/DQJDQ¶VFRQYLFWLRQVZHUHFRQVROLGDWHGDQGUHVXOWHGLQDOLIH
VHQWHQFH ZLWKRXW WKH SRVVLELOLW\ RI SDUROH SOXV \HDUV
/DQJDQZDVDOVRRUGHUHGWRSD\UHVWLWXWLRQRIDQGD
ILQH+HILOHGWKLVWLPHO\DSSHDOLQ-DQXDU\RI
,,$1$/<6,6
$ 7KHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQZKHQLW
H[FOXGHG 'U 5RVV¶V WHVWLPRQ\ UHJDUGLQJ WKH
UHOLDELOLW\RIH\HZLWQHVVLGHQWLILFDWLRQ
/DQJDQ¶V ILUVW FODLP RI HUURU LV WKDW 'U 5RVV¶V H[SHUW
WHVWLPRQ\ ZDV LPSURSHUO\ H[FOXGHG )ROORZLQJ &RSOH\¶V
FRXUWURRPLGHQWLILFDWLRQRI/DQJDQWKHGLVWULFWFRXUWUHIXVHG
WRDGPLW'U5RVV¶VH[SHUWWHVWLPRQ\UHJDUGLQJWKHUHOLDELOLW\
RI &RSOH\¶V H\HZLWQHVV LGHQWLILFDWLRQ $IWHU D OHQJWK\
1R 8QLWHG6WDWHVY/DQJDQ
7KHGLVWULFWFRXUWWKXVKDGMXVWLILFDWLRQIRUFRQFOXGLQJWKDW
E\DQ\QDPHWKHWKHRU\IDLOHGWRPHHWWKHUHTXLVLWHUHOLDELOLW\
VWDQGDUGV $W WKH 'DXEHUW KHDULQJ /DQJDQ KDG WKH
RSSRUWXQLW\WRHVWDEOLVKZKHWKHU'U5RVVKDGFRQGXFWHGDQ\
IXUWKHU UHVHDUFK WR FRQILUP KLV LQWHUSUHWDWLRQ RI WKH
WUDQVIHUHQFHWKHRU\7KUHH\HDUVKDGSDVVHGVLQFHKLVDUWLFOH
ZDV SXEOLVKHG \HW /DQJDQ IDLOHG WR GHPRQVWUDWH WKDW WKH
³OLPLWDWLRQV´RQ'U5RVV¶VUHVHDUFKQRORQJHUH[LVWHG7KH
GLVWULFWFRXUWZDVWKHUHIRUHOHIWZLWK'U5RVV¶VFULWLFLVPRI
WKH JHQHUDO WKHRU\ LQFOXGLQJ KLV RZQ LQWHUSUHWDWLRQ RI
FRQVFLRXVWUDQVIHUHQFHZLWKRXWDQ\VKRZLQJWKDWWKHWKHRU\
KDG EHHQ VXEMHFWHG WR IXUWKHU WHVWLQJ RU EHHQ FRQILUPHG
VFLHQWLILFDOO\$OWKRXJK'U5RVVGLGQRWDVWKHJRYHUQPHQW
DUJXHV³GHEXQN´WKHSKHQRPHQRQRIPLVLGHQWLILFDWLRQWKH
GLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQZKHQLWGHWHUPLQHG
WKDW 'U 5RVV¶V SURIIHUHG WHVWLPRQ\ ODFNHG WKH UHTXLVLWH
LQGLFLDRIUHOLDELOLW\6XFKLQGLFLDZRXOGLQFOXGHHPSLULFDO
VXSSRUWIRUWKHWKHRU\ZKHWKHULWKDGEHHQVXEMHFWHGWRSHHU
UHYLHZDQGZKHWKHUWKHWKHRU\HQMR\HGJHQHUDODFFHSWDQFH
ZLWKLQWKHILHOGRIH\HZLWQHVVLGHQWLILFDWLRQ6HH'DXEHUW
86DW
7KHGLVWULFWFRXUWDOVRIRXQGLWVLJQLILFDQWWKDW'U5RVVKDG
QHYHUEHIRUHEHHQTXDOLILHGDVDQH[SHUWLQIHGHUDOFRXUWDQG
RQO\ RQFH EHIRUH LQ VWDWH FRXUW DV DQ H[SHUW LQ FKLOG
H\HZLWQHVVLGHQWLILFDWLRQ7KLVLVLQFRQWUDVWZLWKWKHH[SHUW
LQ6PLWKHUVZKRVH³TXDOLILFDWLRQVDQGVFLHQWLILFPHWKRGV´
KDG DOUHDG\ EHHQ ³SUDLVHG´ E\ WKH 6L[WK &LUFXLW 6HH
6PLWKHUV)GDW7KHGLVWULFWFRXUWIXUWKHUIDXOWHG
'U 5RVV¶V PHWKRGRORJ\ EHFDXVH KH KDG QHYHU LQFOXGHG D
YLFWLP RU H\HZLWQHVV WR D EDQN UREEHU\ LQ KLV VWXGLHV
$OWKRXJKWKLVIDFWDSSHDUVWREHPRUHUHOHYDQWWRZKHWKHUWKH
RSLQLRQ³ILWV´WKHFDVHDQGLVKHOSIXOZHFDQQRWVD\WKDWWKH
GLVWULFW FRXUW HUUHG LQ FRQFOXGLQJ WKDW LW XQGHUPLQHG WKH
VFLHQWLILFXQGHUSLQQLQJVRI'U5RVV¶VSURIIHUHGRSLQLRQLQ
WKLVFDVH
$QRWKHURIWKHGLVWULFWFRXUW¶VUHDVRQVIRUILQGLQJWKDW'U
5RVV¶VWHVWLPRQ\GLGQRWFRQVWLWXWH³VFLHQWLILFNQRZOHGJH´LV
PRUHSUREOHPDWLF7KHGLVWULFWFRXUWTXHVWLRQHGKLVDELOLW\WR
-- 10 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
,Q6PLWKWKHJRYHUQPHQWKDGFRQFHGHGWKDWWKHSURSRVHG
H[SHUWZDVLQIDFWDQH[SHUWDQGQRQHRIWKHH\HZLWQHVVHV
FRXOGLGHQWLI\6PLWKIURPDSKRWRVSUHDGWKUHHZHHNVDIWHU
WKHUREEHU\LQTXHVWLRQDOWKRXJKWKH\DOOLGHQWLILHG6PLWKDW
DQ)%,OLQHXSIRXUPRQWKVODWHU6HHLGDW'HVSLWH
WKH6PLWKFRXUW¶VKROGLQJWKHGLVWULFWFRXUWLQWKHFDVHEHIRUH
XV GHWHUPLQHG WKDW 'U 5RVV¶V WHVWLPRQ\ ZDV ³ZLWKLQ WKH
MXU\¶V RZQ NQRZOHGJH´ DV LW UHODWHG WR WKH JHQHUDO
SV\FKRORJLFDOIDFWRUVDIIHFWLQJPHPRU\DQGZRXOGWKHUHIRUH
QRWEHRIDVVLVWDQFH
7KH GLVWULFW FRXUW DOVR KHOG WKDW /DQJDQ KDG IDLOHG WR
HVWDEOLVKWKHUHOLDELOLW\RI'U5RVV¶VWHVWLPRQ\UHJDUGLQJWKH
³WUDQVIHUHQFH WKHRU\´ HYHQ WKRXJK &RSOH\¶V LGHQWLILFDWLRQ
SUHVHQWHGDVSHFLILFFRJQLWLYHSUREOHPQRWFRPPRQWRDOORU
HYHQPRVWH\HZLWQHVVLGHQWLILFDWLRQVDQG&RSOH\KHUVHOIKDG
SXWWKHLGHQWLILFDWLRQDWLVVXH$VDEDVLVIRUWKLVILQGLQJWKH
FRXUW SRLQWHG WR 'U 5RVV¶V RQO\ SXEOLVKHG DUWLFOH RQ WKH
VXEMHFWFRQFOXGLQJWKDW³WKHSODLQODQJXDJHRIWKHDUWLFOHLV
WKDW WKH WKHRU\ RI XQFRQVFLRXV WUDQVIHUHQFH LV DV \HW
HPSLULFDOO\XQSURYHQDQGIXUWKHUUHVHDUFKLVQHFHVVDU\EHIRUH
WKHWKHRU\FDQEHFRQILUPHGRUGLVFRQILUPHG´
'U 5RVV ZKR ZDV TXHVWLRQHG DERXW WKLV DUWLFOH DW WKH
VXSSUHVVLRQKHDULQJGHIHQGHGKLVSRVLWLRQE\VWDWLQJWKDWWKH
WUDQVIHUHQFH SKHQRPHQRQ H[LVWHG EXW VKRXOG EH UHQDPHG
³FRQVFLRXVWUDQVIHUHQFH´RU³FRQVFLRXVLQIHUHQFH´EHFDXVH
WKHH\HZLWQHVVKDVDFRQVFLRXVUHFROOHFWLRQRIWKHSUHYLRXV
H[SRVXUH WR WKH LQQRFHQW SHUVRQ LQ D OLQHXS +LV DUWLFOH
KRZHYHUFULWLFL]HVWKHRYHUDOOWKHRU\E\FKDUDFWHUL]LQJWKH
HPSLULFDOHYLGHQFHDV³UDWKHUPHDJHU´7KHDUWLFOHJRHVRQWR
QRWH WKDW KLV H[SHULPHQWV ³KDYH D QXPEHU RI OLPLWDWLRQV´
LQFOXGLQJ ³OLPLWHG H[WHUQDO YDOLGLW\´ DQG ³OLPLWHG
JHQHUDOL]DELOLW\´ 0RUHRYHU ³WKH WKHRUHWLFDO QRWLRQV
GHVFULEHGKHUHQHHGPRGLILFDWLRQDQGIXUWKHUGHYHORSPHQW
DQGWKH\DUHSURSRVHGLQWHUPVRIHQFRXUDJLQJUHVHDUFKLQWKLV
DUHDDQGQRWLQWHUPVRISURYLGLQJWKHGHILQLWLYHZRUGRQWKLV
IDVFLQDWLQJDQGLPSRUWDQWWRSLF´
1R 8QLWHG6WDWHVY/DQJDQ
'DXEHUW KHDULQJ WKH FRXUW FRQFOXGHG WKDW 'U 5RVV¶V
SURSRVHG WHVWLPRQ\ ZDV QRW VXIILFLHQWO\ EDVHG RQ
³VFLHQWLILFNQRZOHGJH´DQG ZRXOGQRWKDYHDVVLVWHGWKH
MXU\ 7KH GLVWULFW FRXUW LQVWHDG RSWHG WR JLYH WKH MXU\ DQ
H\HZLWQHVVLGHQWLILFDWLRQLQVWUXFWLRQWKDWDOHUWHGWKHMXU\WR
WKHYDULRXVIDFWRUVWREHFRQVLGHUHGZKHQZHLJKLQJ&RSOH\¶V
WHVWLPRQ\DQGFDXWLRQHGWKHMXURUVWRFDUHIXOO\FRQVLGHUWKH
VKRUWFRPLQJVDQGWURXEOHVSRWVRIWKHLGHQWLILFDWLRQSURFHVV
:HZLOOQRWGLVWXUEDGLVWULFWFRXUW¶VHYLGHQWLDU\UXOLQJV
XQOHVVZHILQGDQDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVY
0LGGOHWRQ)G WK&LU 2XUVWDQGDUG
RIUHYLHZGRHV³QRWFDWHJRULFDOO\GLVWLQJXLVKEHWZHHQUXOLQJV
DOORZLQJH[SHUWWHVWLPRQ\DQGUXOLQJVGLVDOORZLQJLW´DQGDUH
PLQGIXORIWKH³JDWHNHHSHUUROHRIWKHWULDOMXGJHLQVFUHHQLQJ
VXFKHYLGHQFH´*HQ(OHF&RY-RLQHU86
LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
5XOHRIWKH)HGHUDO5XOHVRI(YLGHQFHVWDWHVWKDW³>L@I
VFLHQWLILFWHFKQLFDORURWKHUVSHFLDOL]HGNQRZOHGJHZLOODVVLVW
WKHWULHURIIDFWWRXQGHUVWDQGWKHHYLGHQFHRUWRGHWHUPLQHD
IDFWLQLVVXHDZLWQHVVTXDOLILHGDVDQH[SHUWE\NQRZOHGJH
VNLOOH[SHULHQFHWUDLQLQJRUHGXFDWLRQPD\WHVWLI\WKHUHWRLQ
WKH IRUP RI DQ RSLQLRQ RU RWKHUZLVH´ ,Q 'DXEHUW WKH
6XSUHPH &RXUW KHOG WKDW ZKHQ IDFHG ZLWK D SURIIHU RI
VFLHQWLILFH[SHUWWHVWLPRQ\5XOHUHTXLUHVDGLVWULFWFRXUW
WRGHWHUPLQHZKHWKHUWKHHYLGHQFH³ERWKUHVWVRQDUHOLDEOH
IRXQGDWLRQDQGLVUHOHYDQWWRWKHWDVNDWKDQG´'DXEHUW
86 DW $V SDUW RI LWV UHYLHZ WKH FRXUW PXVW DVVHVV
³ZKHWKHU WKH UHDVRQLQJ RU PHWKRGRORJ\ XQGHUO\LQJ WKH
WHVWLPRQ\ LV VFLHQWLILFDOO\ YDOLG DQG ZKHWKHU WKDW
UHDVRQLQJRUPHWKRGRORJ\SURSHUO\FDQEHDSSOLHGWRWKHIDFWV
LQLVVXH´,GDW6XFKIDFWRUVDVWHVWLQJSHHUUHYLHZ
SXEOLFDWLRQ HUURU UDWHV WKH H[LVWHQFH DQG PDLQWHQDQFH RI
VWDQGDUGVFRQWUROOLQJWKHWHFKQLTXH¶VRSHUDWLRQDQGJHQHUDO
DFFHSWDQFH LQ WKH UHOHYDQW VFLHQWLILF FRPPXQLW\ VKRXOG EH
FRQVLGHUHGLQWKLVUHYLHZ6HHLGDW7KLVLQTXLU\LV
D IOH[LEOH RQH ZLWK DQ RYHUDUFKLQJ JRDO RI DVVHVVLQJ WKH
³VFLHQWLILF YDOLGLW\ DQG WKXV WKH HYLGHQWLDU\ UHOHYDQFH DQG
-- 11 of 12 --
8QLWHG6WDWHVY/DQJDQ 1R
UHOLDELOLW\´RIWKHSULQFLSOHVDQGPHWKRGRORJ\XQGHUO\LQJWKH
SURSRVHGH[SHUWWHVWLPRQ\6HHLGDW
7KH XVH RI H[SHUW WHVWLPRQ\ LQ UHJDUG WR H\HZLWQHVV
LGHQWLILFDWLRQLVDUHFXUULQJDQGFRQWURYHUVLDOVXEMHFW7ULDO
FRXUWVKDYHWUDGLWLRQDOO\KHVLWDWHGWRDGPLWH[SHUWWHVWLPRQ\
SXUSRUWLQJ WR LGHQWLI\ IODZV LQ H\HZLWQHVV LGHQWLILFDWLRQ
$PRQJWKHUHDVRQVJLYHQWRH[FOXGHVXFKWHVWLPRQ\DUHWKDW
WKH MXU\ FDQ GHFLGH WKH FUHGLELOLW\ LVVXHV LWVHOI VHH 8QLWHG
6WDWHV Y /XPSNLQ )G G &LU
GHWHUPLQLQJWKDWWKH³SURSRVHGWHVWLPRQ\LQWUXGHVWRRPXFK
RQ WKH WUDGLWLRQDO SURYLQFH RI WKH MXU\ WR DVVHVV ZLWQHVV
FUHGLELOLW\´ WKDWH[SHUWVLQWKLVDUHDDUHQRWPXFKKHOSDQG
ODUJHO\RIIHUUDWKHUREYLRXVJHQHUDOLWLHVVHH8QLWHG6WDWHVY
+XGVRQ)G WK&LU ³6XFKH[SHUW
WHVWLPRQ\ZLOOQRWDLGWKHMXU\EHFDXVHLWDGGUHVVHVDQLVVXHRI
ZKLFK WKH MXU\ DOUHDG\ JHQHUDOO\ LV DZDUH DQG LW ZLOO QRW
FRQWULEXWHWRWKHLUXQGHUVWDQGLQJRIWKHSDUWLFXODUGLVSXWH´
WKDW WULDOV ZRXOG EH SURORQJHG E\ D EDWWOH RI H[SHUWV VHH
8QLWHG6WDWHVY)RVKHU)G VW&LU
DGGLQJ ³WR WKH WULDO FRXUW¶V DUWLFXODWHG FRQFHUQV RXU RZQ
FRQYLFWLRQ WKDW D WULDO FRXUW KDV WKH GLVFUHWLRQ WR DYRLG
LPSRVLQJXSRQWKHSDUWLHVWKHWLPHDQGH[SHQVHLQYROYHGLQ
DEDWWOHRIH[SHUWV´ DQGWKDWVXFKWHVWLPRQ\FUHDWHVXQGXH
RSSRUWXQLW\IRUFRQIXVLQJDQGPLVOHDGLQJWKHMXU\VHH8QLWHG
6WDWHVY5LQFRQ)G WK&LU ³*LYHQWKH
SRZHUIXO QDWXUH RI H[SHUW WHVWLPRQ\ FRXSOHG ZLWK LWV
SRWHQWLDOWRPLVOHDGWKHMXU\ZHFDQQRWVD\WKHGLVWULFWFRXUW
HUUHG LQ FRQFOXGLQJ WKDW WKH SURIIHUHG HYLGHQFH ZRXOG QRW
DVVLVWWKHWULHURIIDFWDQGWKDWLWZDVOLNHO\WRPLVOHDGWKH
MXU\´
6HYHUDOFRXUWVKRZHYHULQFOXGLQJRXURZQKDYHVXJJHVWHG
WKDWVXFKHYLGHQFHZDUUDQWVDPRUHKRVSLWDEOHUHFHSWLRQ6HH
8QLWHG6WDWHVY6PLWKHUV)G WK&LU
KROGLQJ WKDW ³WKH GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQ LQ
H[FOXGLQJ>WKHH\HZLWQHVVLGHQWLILFDWLRQH[SHUW¶V@WHVWLPRQ\
ZLWKRXW ILUVW FRQGXFWLQJ D KHDULQJ SXUVXDQW WR 'DXEHUW´
8QLWHG6WDWHVY6PLWK)G WK&LU
DJUHHLQJWKDW³H[SHUWWHVWLPRQ\RQH\HZLWQHVVLGHQWLILFDWLRQ
1R 8QLWHG6WDWHVY/DQJDQ
PD\ SURSHUO\ EH DGPLWWHG XQGHU 'DXEHUW LQ FHUWDLQ
FLUFXPVWDQFHV´ 8QLWHG6WDWHVY%ULHQ)G VW
&LU GHFOLQLQJWRDGRSWDEODQNHWUXOHWKDWTXDOLILHG
H[SHUWWHVWLPRQ\RQH\HZLWQHVVLGHQWLILFDWLRQPXVWHLWKHUEH
URXWLQHO\ DGPLWWHG RU H[FOXGHG 8QLWHG 6WDWHV Y $PDGRU
*DOYDQ)G WK&LU GHFOLQLQJWR
IROORZDSHUVHUXOHH[FOXGLQJH[SHUWWHVWLPRQ\UHJDUGLQJWKH
FUHGLELOLW\ RI H\HZLWQHVV LGHQWLILFDWLRQ 0RUHRYHU VXFK
WHVWLPRQ\ KDV EHHQ DOORZHG LQ ZLWK LQFUHDVLQJ IUHTXHQF\
ZKHUHWKHFLUFXPVWDQFHVLQFOXGH³FURVVUDFLDOLGHQWLILFDWLRQ
LGHQWLILFDWLRQ DIWHU D ORQJ GHOD\ LGHQWLILFDWLRQ DIWHU
REVHUYDWLRQ XQGHU VWUHVV DQG >VXFK@ SV\FKRORJLFDO
SKHQRPHQDDVXQFRQVFLRXVWUDQVIHUHQFH´6HH8QLWHG
6WDWHV Y +DUULV )G WK &LU
1RQHWKHOHVVHDFKFRXUWWRH[DPLQHWKLVLVVXHKDVKHOGWKDWWKH
GLVWULFWFRXUWKDVEURDGGLVFUHWLRQLQILUVWGHWHUPLQLQJWKH
UHOLDELOLW\RIWKHSDUWLFXODUWHVWLPRQ\DQGVHFRQGEDODQFLQJ
LWV SUREDWLYH YDOXH DJDLQVW LWV SUHMXGLFLDO HIIHFW 6HH HJ
8QLWHG6WDWHVY+DOO)G WK&LU
8QLWHG6WDWHVY.LPH)G WK&LU
7KHGLVWULFWFRXUWLQWKHFDVHEHIRUHXVGLGQRWDXWRPDWLFDOO\
H[FOXGH 'U 5RVV¶V WHVWLPRQ\ ,QVWHDG LW FRQVLGHUHG WKH
PDWWHULQGHWDLODIWHUFRQGXFWLQJDOHQJWK\'DXEHUWKHDULQJ
DQGVSHFLILFDOO\DFNQRZOHGJHGWKH6L[WK&LUFXLW¶VZLOOLQJQHVV
WRDFFHSWSV\FKRORJLFDOVWXGLHVDVDVFLHQWLILFDOO\VRXQGDQG
SURSHU VXEMHFW RI H[SHUW WHVWLPRQ\ ,Q IDFW WKH FRXUW
SRLQWHGO\ GLVWLQJXLVKHG WKH FLUFXPVWDQFHV SUHVHQWHG LQ
/DQJDQ¶VFDVHIURPWKRVHLQ8QLWHG6WDWHVY6PLWK)G
WK&LU ZKHUHWKLVFRXUWQRWHGWKDWWKHVFLHQFH
RIH\HZLWQHVVSHUFHSWLRQKDVDFKLHYHGWKHOHYHORI³H[DFWQHVV
PHWKRGRORJ\DQGUHOLDELOLW\RIDQ\SV\FKRORJLFDOUHVHDUFK´
,GDW7KH6PLWKFRXUWKHOGWKDWWKHGLVWULFWFRXUWKDG
DEXVHG LWV GLVFUHWLRQ LQ H[FOXGLQJ DQ H[SHUW LQ H\HZLWQHVV
LGHQWLILFDWLRQ EHFDXVH ³>V@XFK WHVWLPRQ\ PLJKW KDYH EHHQ
UHOHYDQWWRWKHH[DFWIDFWVEHIRUHWKHFRXUWDQGQRWRQO\PLJKW
KDYHDVVLVWHGWKHMXU\EXWPLJKWKDYHUHIXWHGWKHLURWKHUZLVH
FRPPRQ DVVXPSWLRQV DERXW WKH UHOLDELOLW\ RI H\HZLWQHVV
LGHQWLILFDWLRQ´WKXVVDWLVI\LQJWKH³KHOSIXOQHVVWHVW´RI5XOH
,GDW HPSKDVLVLQRULJLQDO
-- 12 of 12 --
Connect Omnilex to search the legal corpus from your AI assistant.