02a0140p.06

7KH +RQRUDEOH $UWKXU - 7DUQRZ 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ 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
0,&+$(/ $ 08/+$//
3ODLQWLII$SSHOODQW
Y
-2+1 $6+&52)7LQKLV
RIILFLDOFDSDFLW\DV$WWRUQH\
*HQHUDODQGWKH)('(5$/
%85($8 2) ,19(67,*$7,21
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW/RXLVYLOOH
1R²&KDUOHV56LPSVRQ,,,'LVWULFW-XGJH
$UJXHG0DUFK
'HFLGHGDQG)LOHG$SULO
%HIRUH0225(DQG&2/(&LUFXLW-XGJHV7$512:
'LVWULFW-XGJH

-- 1 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('-DPHV0 %ROXV-U%2/86 5$*/$1'
/RXLVYLOOH .HQWXFN\ IRU $SSHOODQW 'DQLHO %HQVLQJ
81,7(' 67$7(6 '(3$570(17 2) -867,&(
:DVKLQJWRQ'&IRU$SSHOOHHV21%5,()-DPHV0
%ROXV -U %2/86 5$*/$1' /RXLVYLOOH .HQWXFN\
7KRPDV(&OD\/RXLVYLOOH.HQWXFN\IRU$SSHOODQW'DQLHO
%HQVLQJ 0DUOHLJK ' 'RYHU 81,7(' 67$7(6
'(3$570(17 2) -867,&( :DVKLQJWRQ '& IRU
$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
.$5(1 1(/621 0225( &LUFXLW -XGJH 3ODLQWLII
0LFKDHO$0XOKDOODSSHDOVWKHJUDQWRIVXPPDU\MXGJPHQW
RQKLV7LWOH9,,UHWDOLDWLRQFODLP2QWKHPHULWVZHILQGQR
HUURU LQ WKH GLVWULFW FRXUW¶V MXGJPHQW ZLWK UHVSHFW WR
'HIHQGDQW$WWRUQH\*HQHUDO-RKQ$VKFURIWEHFDXVH0XOKDOO
IDLOHGWRSURGXFHHLWKHUGLUHFWRUFLUFXPVWDQWLDOHYLGHQFHIURP
ZKLFKDUHDVRQDEOHIDFWILQGHUFRXOGLQIHUWKDWKLVVXSHUYLVRUV
NQHZRIKLVSURWHFWHGDFWLYLW\+RZHYHUZHPXVWUHPDQGVR
WKH GLVWULFW FRXUW PD\ DPHQG LWV RUGHU LQ WKH SUHVHQW FDVH
$OWKRXJK 0XOKDOO VXHG ERWK WKH )%, DQG WKHQ$WWRUQH\
*HQHUDO-DQHW5HQRLQKHURIILFLDOFDSDFLW\WKHGLVWULFWFRXUW
HQWHUHGMXGJPHQWIRUWKH)%,RQO\7KHGLVWULFWFRXUWFOHDUO\
LQWHQGHGWRLVVXHDILQDORUGHULQJUDQWLQJVXPPDU\MXGJPHQW
WRWKH)%,DQGWKXVLWVRPLVVLRQRIWKHDWWRUQH\JHQHUDOFRXOG
EH GHVFULEHG DV D PHUHO\ WHFKQLFDO HUURU %XW XQGHU
86&†HWKHDWWRUQH\JHQHUDOUDWKHUWKDQWKH)%,
ZDVWKHRQO\SURSHUGHIHQGDQWLQWKHSUHVHQWFDVH7KXVZH
9$&$7(WKHGLVWULFWFRXUW¶VMXGJPHQWDQG5(0$1'WRWKH
GLVWULFWFRXUWVRWKDWLWPD\DPHQGLWVRUGHU
1R 0XOKDOOY$VKFURIWHWDO
,,,&21&/86,21
)RUWKHIRUHJRLQJUHDVRQVZH9$&$7(WKHMXGJPHQWRI
WKHGLVWULFWFRXUWDQG5(0$1'VRWKDWWKHGLVWULFWFRXUWPD\
DPHQG LWV RUGHU WR JUDQW VXPPDU\ MXGJPHQW WR $WWRUQH\
*HQHUDO$VKFURIWDQGWRGLVPLVVWKHFODLPVDJDLQVWWKH)%,

-- 2 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
ZDVRQWKHZLWQHVVOLVWRUWKDW%H\HULQIRUPHG0HWFDOIHDQG
5D\RIWKDWIDFW
,Q VXP WKH GLVWULFW FRXUW GLG QRW HUU LQ FRQFOXGLQJ WKDW
0XOKDOOKDVIDLOHGWRSURGXFHHYLGHQFHVXIILFLHQWWRHVWDEOLVK
WKDWWKHRIILFLDOVWDNLQJWKHDGYHUVHHPSOR\PHQWDFWLRQNQHZ
RIKLVSURWHFWHGDFWLYLW\0XOKDOOKDVQRWSURGXFHGGLUHFWRU
FLUFXPVWDQWLDOHYLGHQFHWKDW0HWFDOIHDQG5D\NQHZWKDWKH
ZDVOLVWHGDVDZLWQHVVE\+HQGHUVRQSULRUWRWKHGUDIWLQJDQG
VHQGLQJRIWKHOHWWHUWR0XOKDOO¶V-&3'VXSHULRUV1RUKDVKH
SURGXFHG HYLGHQFH IURP ZKLFK RQH FRXOG UHDVRQDEO\ LQIHU
WKDW0HWFDOIHDQGRU5D\NQHZRIKLVSURWHFWHGDFWLYLWLHV$
UHDVRQDEOHMXU\FRXOGQRWILQGUHWDOLDWLRQRQWKHVHIDFWVDQG
WKXVVXPPDU\MXGJPHQWZDVSURSHU
)LQDOO\0XOKDOODOVRDUJXHVRQDSSHDOWKDWWKHGLVWULFWFRXUW
HUUHG LQ JUDQWLQJ VXPPDU\ MXGJPHQW LQ WKH SUHVHQW FDVH
EHFDXVHWKDWFRXUWHIIHFWLYHO\UHYLVLWHGLWVHDUOLHUILQGLQJWKDW
KHKDGHVWDEOLVKHGDSULPDIDFLHFDVHRIUHWDOLDWLRQ0XOKDOO
DVVHUWV WKDW WKLV ZDV FRQWUDU\ WR RXU KROGLQJ LQ $YHU\
'HQQLVRQ +RZHYHU $YHU\'HQQLVRQKHOGRQO\WKDW³LWLV
LQDSSURSULDWHIRUDFRXUWWRUHVROYHDGLVFULPLQDWLRQFDVHRQ
JURXQGVWKDWDSULPDIDFLHFDVHKDGQRWEHHQPDGHDIWHUWKH
FDVHKDVEHHQIXOO\WULHGRQWKHPHULWV´$YHU\'HQQLVRQ
)GDW HPSKDVLVDGGHG 6HHDOVR.RYDFHYLFKY.HQW
6WDWH 8QLY )G WK &LU ³$YHU\
'HQQLVRQVWDQGVIRUWKHVLPSOHSURSRVLWLRQWKDWLQUHYLHZLQJ
WKHIDFWVRIDGLVFULPLQDWLRQFDVHDIWHUWKHUHKDVEHHQDIXOO
WULDO RQ WKH PHULWV D GLVWULFW FRXUW PXVW IRFXV RQ WKH
XOWLPDWHTXHVWLRQRIGLVFULPLQDWLRQUDWKHUWKDQRQZKHWKHUD
SODLQWLIIPDGHRXWKHUSULPDIDFLHFDVH´ HPSKDVLVDGGHG
,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUW JUDQWHG VXPPDU\
MXGJPHQWSULRUWRWULDORQWKHPHULWVDQGWKXVLWGLGQRWHUULQ
UHYLVLWLQJLWVKROGLQJRQWKHGHIHQGDQWV¶UHQHZHGPRWLRQIRU
VXPPDU\ MXGJPHQW LQ OLJKW RI WKH DGGLWLRQDO HYLGHQFH
XQFRYHUHGGXULQJGLVFRYHU\
1R 0XOKDOOY$VKFURIWHWDO
,%$&.*5281'
0XOKDOOLVD-HIIHUVRQ&RXQW\.HQWXFN\SROLFHRIILFHU+H
ZDVDVVLJQHGWRWKH/RXLVYLOOH)XJLWLYH7DVN)RUFH ³/)7)´
IURP0DUFKWR0DUFK7KH/)7)LVDMRLQW
HIIRUWRIWKH)%,860DUVKDOV6HUYLFHWKH/RXLVYLOOH3ROLFH
'HSDUWPHQW DQG WKH -HIIHUVRQ &RXQW\ 3ROLFH 'HSDUWPHQW
³-&3'´ 7KH-&3'¶VGHFLVLRQWRUHPRYH0XOKDOOIURPWKH
/)7)DQGUHDVVLJQKLPHIIHFWLYH0DUFKLVDWWKH
KHDUWRI0XOKDOO¶V7LWOH9,,UHWDOLDWLRQFDVH
0XOKDOO¶V UHDVVLJQPHQW ZDV SURPSWHG E\ D VHHPLQJO\
LQQRFXRXV OHWWHU VHQW E\ )%, 6XSHUYLVRU\ 6SHFLDO $JHQW
³66$´ +DO0HWFDOIHWR0XOKDOO¶V-&3'VXSHULRU&KLHIRI
3ROLFH /HRQ ( -RQHV RQ )HEUXDU\ 6HH -RLQW
$SSHQGL[ ³-$´ DW &RPSOˆ 66$0HWFDOIHZDV
DVVLVWHG LQ SUHSDULQJ WKLV OHWWHU E\ 6SHFLDO $JHQW ³6$´
0LFKDHO 5D\ 0HWFDOIH¶V OHWWHU UHTXHVWHG WKDW WKH -&3'
UHYLHZ0XOKDOO¶VWLPHDQGDWWHQGDQFHUHFRUGVIRUWKHSHULRG
0DUFKWKURXJK)HEUXDU\SXUSRUWHGO\VR
WKDWWKH-&3'DQG)%,FRXOGSUHSDUHIRUDILQDQFLDODXGLWRI
WKH /)7)¶V UHFRUGV E\ )%, KHDGTXDUWHUV 6HH -$ DW
0HWFDOIH /HWWHU 7KH -&3'¶V UHYLHZ RI 0XOKDOO¶V WLPH
VKHHWVDQGDWWHQGDQFHUHFRUGVOHGWRD-&3',QWHUQDO$IIDLUV
³,$´ LQYHVWLJDWLRQLQWR0XOKDOO¶VDFWLYLWLHVVHH-$DW
,QWHUQDO $IIDLUV 5HS DQG KLV UHPRYDO IURP WKH /)7)
7KXV WKH OHWWHU IURP 0HWFDOIH WR -RQHV FRQVWLWXWHV WKH
FKDOOHQJHGDGYHUVHHPSOR\PHQWDFWLRQLQWKHSUHVHQWFDVH
7KH VSHFLILF FKDUJHV DJDLQVW 0XOKDOO UHODWHG WR KLV
UHFRUGLQJRIRYHUWLPHKRXUV$VSUHVHQWHGE\66$0HWFDOIH
DQG6$5D\0XOKDOOKDGEHHQGHIUDXGLQJWKHJRYHUQPHQWE\
FODLPLQJWRKDYHZRUNHGKRXUVWKDWKHKDGQRWZRUNHG6HH
HJ-$DW =DERURQDN'HS 7KHDFWXDOGLVFUHSDQFLHV
LQ WKH WLPH VKHHWV ² ZKLFK DUH SHULSKHUDO WR WKH LVVXHV
SUHVHQWHGRQWKLVDSSHDO²VWHPPHGDSSDUHQWO\IURPWKH
GLIIHUHQFHV LQ WKH UXOHV IRU FRPSHQVDWLQJ RYHUWLPH IRU WKH
-&3' DQG )%, 0XOKDOO ZDV HYHQWXDOO\ FOHDUHG RI DQ\
ZURQJGRLQJE\WKH,$LQYHVWLJDWLRQDQGQRFULPLQDOFKDUJHV
ZHUHHYHUEURXJKWDJDLQVWKLP

-- 3 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
7KHSDUWLHVWRWKHSUHVHQWFDVHGRQRWGLVSXWHRQDSSHDO
WKDW WKH 0HWFDOIH OHWWHU ZKLFK UHVXOWHG LQ 0XOKDOO¶V
UHDVVLJQPHQW FRQVWLWXWHV DQ DGYHUVH DFWLRQ 1RU GR WKH\
GLVSXWHRQDSSHDOWKDW0XOKDOOZDVHQJDJHGLQDSURWHFWHG
DFWLYLW\SULRUWRWKHDGYHUVHDFWLRQ0XOKDOOZDVQDPHGDVD
ZLWQHVV LQ IRUPHU 6$ -HDQQH -DPHV +HQGHUVRQ¶V ((2
FRPSODLQW DJDLQVW DQRWKHU )%, DJHQW 6HH -$ DW
+HQGHUVRQ((2&RPSO +HQGHUVRQ$II 7KLVZRXOG
FRQVWLWXWHDSURWHFWHGDFWLYLW\XQGHU86&†H D
ZKLFK SURKLELWV GLVFULPLQDWLRQ IRU ³DVVLVW>LQJ @ RU
SDUWLFLSDW>LQJ@LQDQ\PDQQHULQDQLQYHVWLJDWLRQSURFHHGLQJ
RUKHDULQJXQGHU´7LWOH9,,
,QVWHDGWKHSDUWLHVGLVSXWHZKHWKHU66$0HWFDOIHDQG6$
5D\NQHZWKDW0XOKDOOZDVOLVWHGDVDZLWQHVVE\+HQGHUVRQ
DWWKHWLPHWKDWWKH\GUDIWHGDQGVHQWWKHOHWWHUWR0XOKDOO¶V
-&3' VXSHUYLVRU )RU WKHLU SDUW 0HWFDOIH DQG 5D\
XQHTXLYRFDOO\GHQ\DQ\NQRZOHGJHRIWKDWFUXFLDOIDFWRQRU
EHIRUH)HEUXDU\7KHIDFWVXQGHUO\LQJWKHVHGHQLDOV
DUHDVIROORZV2QRUDERXW)HEUXDU\6$'DYLG
%H\HUFKLHIFRXQVHODWWKH/RXLVYLOOH)%,RIILFHUHFHLYHGE\
PDLODSDFNDJHWKDWFRQWDLQHG+HQGHUVRQ¶VILIW\HLJKWSDJH
VZRUQVWDWHPHQW0XOKDOO¶VQDPHZDVWKHODVWQDPHRQWKH
OLVWRIZLWQHVVHVLQWKHVZRUQVWDWHPHQW²LWDSSHDUHGRQSDJH
ILIW\HLJKWWKHODVWSDJH7KHSDFNDJHZDVDGGUHVVHGWR%H\HU
EXWLQGLFDWHGLQDQRWDWLRQZULWWHQRQWKHHQYHORSHWKDW%H\HU
VKRXOG GHOLYHU WKH SDFNDJH WR 6$ 5XVV 3XOOH\ WKH ((2
LQYHVWLJDWRUDVVLJQHGWR+HQGHUVRQ¶VFRPSODLQW%H\HUSODFHG
WKHSDFNDJHLQKLVRIILFHVDIHKHFODLPVQRWWRKDYHRSHQHG
WKHSDFNDJHDWWKHWLPHRUWRKDYHUHDGLWVFRQWHQWV6HH-$
DW %H\HU'HS 2Q)HEUXDU\3XOOH\FRQWDFWHG
%H\HU WROG KLP WKDW WKH SDFNDJH FRQWDLQHG +HQGHUVRQ¶V
VZRUQVWDWHPHQWDQGUHTXHVWHGWKDW%H\HUPDNHDFRS\RILW
DQGVHQGWKHFRS\WR+HQGHUVRQ¶VDWWRUQH\%H\HUFRPSOLHG
ZLWK3XOOH\¶VUHTXHVWE\RSHQLQJWKHSDFNDJHFRS\LQJWKH
VWDWHPHQWXVLQJDSKRWRFRSLHUZLWKDQDXWRPDWLFIHHGHUDQG
GHOLYHULQJWKHFRS\LQDVHDOHGHQYHORSHWRWKHPDLOURRPRI
WKH )%, RIILFH +H FODLPV QRW WR KDYH UHDG WKH VWDWHPHQW
ZKLOHFRS\LQJLWDQGWKXVKHFODLPVWKDWKHZDVQRWDZDUH
1R 0XOKDOOY$VKFURIWHWDO
RIILFLDO ZKR DFWXDOO\ ILUHG WKH SODLQWLII PDGH LW ³KLJKO\
LPSUREDEOH WKDW >WKH ILUVW RIILFLDO@ ZRXOG QRW KDYH
GLVFXVVHGSODLQWLII¶VFRPSODLQWZLWK>WKHVHFRQGRIILFLDO@DV
VRRQDV>WKHILUVWRIILFLDO@REWDLQHGWKLVLQIRUPDWLRQ´,GDW
.UDORZHF ZKLFK 0XOKDOO FLWHV RQ DSSHDO LV
GLVWLQJXLVKDEOHIURPWKHSUHVHQWFDVHKRZHYHULQWKDWWKH
ILUVW RIILFLDO DFWXDOO\ SDUWLFLSDWHG LQ GUDIWLQJ WKH FKDUJHV
DJDLQVWWKHSODLQWLIIWKDWUHVXOWHGLQKHUGLVFKDUJH6HHLGDW
*LYHQ WKLVOHYHORILQYROYHPHQWE\DQRIILFLDOZLWK
NQRZOHGJH RI WKH SURWHFWHG DFWLYLW\ WKH FRPSODLQW LQ WKDW
FDVHWKHLQIHUHQFHWKDWWKHRIILFLDOZKRDFWXDOO\GHFLGHGWR
ILUHWKHSODLQWLIIZDVHPLQHQWO\UHDVRQDEOH0XOKDOOKDVQHYHU
DUJXHG WKDW %H\HU DFWXDOO\ SDUWLFLSDWHG LQ WKH DGYHUVH
HPSOR\PHQW DFWLRQ LQ WKH SUHVHQW FDVH QRU KDV 0XOKDOO
DOOHJHGIDFWVRISULRULQWHUDFWLRQVEHWZHHQ%H\HURQWKHRQH
KDQG DQG 0HWFDOIH DQG 5D\ RQ WKH RWKHU WKDW PDNH LW
UHDVRQDEOHWRLQIHUWKDWWKHIRUPHUZRXOGGLVFXVV0XOKDOO¶V
LQFOXVLRQ RQ +HQGHUVRQ¶V ZLWQHVV OLVW ³DV VRRQ DV >KH@
REWDLQHGWKLVLQIRUPDWLRQ´
0RUHRYHUWKHUH ZDVHYLGHQFHLQ .UDORZHFWKDWWKHILUVW
RIILFLDODFWXDOO\NQHZRIWKHSODLQWLII¶VFRPSODLQW6HHLGDW
0XOKDOO KDV QRW SURGXFHG HYLGHQFH WKDW %H\HU
DFWXDOO\NQHZWKDW +HQGHUVRQKDGOLVWHGKLPDVDZLWQHVV
(YHQ LI ZH LQIHU WKDW %H\HU VDZ 0XOKDOO¶V QDPH RQ WKH
ZLWQHVV OLVW ZKHQ KH SKRWRFRSLHG +HQGHUVRQ¶V VZRUQ
VWDWHPHQW GHVSLWH %H\HU¶V GHSRVLWLRQ WHVWLPRQ\ WR WKH
FRQWUDU\LQRUGHUWRUHYHUVHWKHGLVWULFWFRXUWZHZRXOGKDYH
WRJRIXUWKHUDQGLQIHUWKDW%H\HUVKDUHGWKLVLQIRUPDWLRQZLWK
0HWFDOIH DQGRU 5D\ 7KHUH LV VLPSO\ QR HYLGHQFH LQ WKH
UHFRUGGLUHFWRUFLUFXPVWDQWLDOWRVXSSRUWVXFKDQLQIHUHQFH
RWKHU WKDQ WKH DGYHUVH DFWLRQ LWVHOI 0XOKDOO KRZHYHU
FRQWLQXHVWRDVVHUWWKDW³%H\HUGLVVHPLQDWHG0XOKDOO¶VQDPH´
JRLQJVRIDUDVWRFODLPWKDWGLVFRYHU\KDVPDGHWKLV³DQHYHQ
PRUHUHDOLVWLFSRVVLELOLW\´$SSHOODQW¶V%UDW%XWWKLV
DVVHUWLRQ LV EDVHG RQ SXUSRUWHG FUHGLELOLW\ LVVXHV DQG
LQFRQVLVWHQWVWDWHPHQWVE\%H\HUQRWHYLGHQFHRILQWHUDFWLRQV
EHWZHHQ%H\HUDQGWKHRWKHU)%,DJHQWV6HHLGDW
1RQH RI WKH LQFRQVLVWHQFLHV SRLQWHG WR E\ 0XOKDOO SRLQW
WRZDUGWKHFRQFOXVLRQHLWKHUWKDW%H\HUNQHZWKDW0XOKDOO

-- 4 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
FRUUHFWLRQVRIILFHULQKLVFHOOEORFNKDGEHHQWUDQVIHUUHG7KH
SODLQWLIIKRZHYHUZDVWKHRQO\WUDQVIHUUHGRIILFHUWRILOHD
JULHYDQFHFRPSODLQLQJRIWKHWUDQVIHUDQGKHZDVWKHRQO\
WUDQVIHUUHGRIILFHUUHWXUQHGWRWKHFHOOEORFN6HHLG*LYHQ
WKDWWKHVXSHUYLVRUWRRNDQDFWLRQZLWKUHVSHFWWRWKHSODLQWLII
RWKHUWKDQWKHFKDOOHQJHGDGYHUVHDFWLRQIURPZKLFKLWFRXOG
EHLQIHUUHGWKDWWKHVXSHUYLVRUZDVDZDUHRIWKHSODLQWLII¶V
JULHYDQFHZHKHOGWKDWWKHSODLQWLIIKDGPHWKLVEXUGHQRQ
WKLV HOHPHQW RI KLV FDVH ,Q FRQWUDVW 0XOKDOO KDV QRW
SURGXFHGDQ\HYLGHQFHRIRWKHUDFWLRQVWDNHQE\0HWFDOIHDQG
5D\RWKHUWKDQWKHFKDOOHQJHGDGYHUVHDFWLRQIURPZKLFKD
UHDVRQDEOHMXU\FRXOGLQIHUWKDWWKH\NQHZWKDW0XOKDOOKDG
EHHQOLVWHGDVDZLWQHVVLQ+HQGHUVRQ¶VFRPSODLQW
6LPLODUO\LQ3RONY<HOORZ)UHLJKW6\VWHP,QF)G
WK &LU ZH KHOG WKDW WKH SODLQWLII KDG
SUHVHQWHGVXIILFLHQWHYLGHQFHWRVXSSRUWWKHLQIHUHQFHWKDWKHU
HPSOR\HU NQHZ RI KHU SURWHFWHG DFWLYLW\ LQ WKDW FDVH WKH
SODLQWLIIKDGYLVLWHGWKH0LFKLJDQ'HSDUWPHQWRI&LYLO5LJKWV
WRLQTXLUHDERXWKHUULJKWV ZKHUHSODLQWLIIWHVWLILHGWKDWKHU
VXSHUYLVRUWROGKHU³,NQRZZKHUH\RX¶YHEHHQ´,G7KLV
VWDWHPHQW ZDV FLUFXPVWDQWLDO HYLGHQFH RI WKH VXSHUYLVRU¶V
NQRZOHGJHLQWKDWWKHWHVWLPRQ\LWVHOIGLGQRWHVWDEOLVKWKDW
WKHVXSHUYLVRUNQHZRIWKHSODLQWLII¶VSURWHFWHGDFWLYLW\EXWD
UHDVRQDEOH MXU\ FRXOG LQIHU IURP WKH WHVWLPRQ\ WKDW WKH
VXSHUYLVRU NQHZ RI WKH SURWHFWHG DFWLYLW\ DW LVVXH ,Q WKH
SUHVHQW FDVH 0XOKDOO KDV QRW SUHVHQWHG HYLGHQFH RI
VWDWHPHQWVE\0HWFDOIHRU5D\IURPZKLFKDUHDVRQDEOHMXU\
FRXOGLQIHUWKDWWKH\NQHZRIKLVSURWHFWHGDFWLYLW\
,QDVLPLODUYHLQDWOHDVWRQHGLVWULFWFRXUWKDVFRQFOXGHG
WKDW NQRZOHGJH RI D SODLQWLII¶V SURWHFWHG DFWLYLW\ FDQ EH
LQIHUUHGIURPHYLGHQFHRIWKHSULRULQWHUDFWLRQRILQGLYLGXDOV
ZLWK VXFK NQRZOHGJH DQG WKRVH WDNLQJ WKH DGYHUVH
HPSOR\PHQWDFWLRQ.UDORZHFY3ULQFH*HRUJH¶V&RXQW\
0DU\ODQG)6XSS '0G DII¶G)G
WK&LU FHUWGHQLHG86 KHOGWKDWWKH
SODLQWLIIKDGPHWKHUEXUGHQZKHUHVKHSURGXFHGHYLGHQFH
WKDWRQHFRXQW\RIILFLDONQHZRIWKHSODLQWLII¶VFRPSODLQWDQG
WKDWWKH³SULRULQWHUDFWLRQ´RIWKDWILUVWRIILFLDOZLWKWKHVHFRQG
1R 0XOKDOOY$VKFURIWHWDO
WKDW0XOKDOO¶VQDPHDSSHDUHGRQWKHZLWQHVVOLVWRQWKHODVW
SDJHRIWKHVWDWHPHQW6HH-$DW %H\HU'HS
2Q0DUFK+HQGHUVRQ¶VDWWRUQH\FRQWDFWHG%H\HU
WRLQIRUPKLPWKDWWKHFRS\RI+HQGHUVRQ¶VVWDWHPHQWKDGQRW
DUULYHG%H\HUIROORZHGXSZLWKWKHPDLOURRPHPSOR\HHDQG
GLVFRYHUHGWKDWWKHVWDWHPHQWVWLOOLQLWVVHDOHGHQYHORSHZDV
VWLOOLQWKHPDLOURRPHPSOR\HH¶VPDLOER[6HH-$DW
8SRQPDNLQJWKLVGLVFRYHU\%H\HUFRPSRVHGDPHPRUDQGXP
UHJDUGLQJWKHPLVKDQGOLQJRIWKHSDFNDJHEHFDXVHKHFODLPV
KH ZDV FRQFHUQHG WKDW +HQGHUVRQ ZRXOG VHH WKLV DV DQ
RSSRUWXQLW\IRUDGGLWLRQDOOLWLJDWLRQDJDLQVWWKH)%,6HH-$
DW %H\HU0HPR
0XOKDOO¶V WKHRU\ RI WKH FDVH LV WKDW 0HWFDOIH DQG 5D\
GLVFRYHUHGWKDW0XOKDOOZDVOLVWHGDVDZLWQHVVE\+HQGHUVRQ
VRPHWLPHEHWZHHQWKHDUULYDORIWKH3XOOH\SDFNDJHLQWKH
/RXLVYLOOH)%,RIILFHRQ)HEUXDU\DQGWKHPDLOLQJ
RI WKH OHWWHU WR 0XOKDOO¶V -&3' VXSHULRU RQ )HEUXDU\
'XULQJ WKDW WLPH WKH +HQGHUVRQ VWDWHPHQW ZDV LQ
%H\HU¶VSRVVHVVLRQORFNHGLQKLVSHUVRQDOVDIHDQGEHWZHHQ
)HEUXDU\DQG0DUFKRUWKHFRS\RIWKHVWDWHPHQWPDGH
E\%H\HUZDVLQWKHPDLOURRPHPSOR\HH¶VXQVHFXUHGPDLOER[
LQ WKH PDLOURRP 2SSRVLQJ WKH GHIHQGDQWV¶ PRWLRQ IRU
VXPPDU\MXGJPHQW0XOKDOODUJXHGWKDWWKHIDFWVVXUURXQGLQJ
WKHGHOLYHU\RIWKH+HQGHUVRQVWDWHPHQWWRWKH/RXLVYLOOH)%,
RIILFHDQGLWVPLVKDQGOLQJGXULQJWKHNH\SHULRGRIWLPHJLYH
ULVHWRWKHLQIHUHQFHWKDW0HWFDOIHDQG5D\GLVFRYHUHGWKDW
0XOKDOO ZDV OLVWHG DV D ZLWQHVV E\ +HQGHUVRQ SULRU WR WKH
GUDIWLQJDQGVHQGLQJRIWKHOHWWHUWR0XOKDOO¶V-&3'VXSHULRU
0XOKDOO KDV GHYHORSHG WKUHH GLVWLQFW WKHRULHV WR H[SODLQ
KRZ0HWFDOIHDQG5D\OHDUQHGWKDWKHZDVOLVWHGDVDZLWQHVV
LQ+HQGHUVRQ¶VVWDWHPHQWDQGWKXVZK\WKH\GUDIWHGDQGVHQW
WKHOHWWHU)LUVW0XOKDOODVVHUWVWKDW%H\HUFRXOGKDYHUHDG
WKHVWDWHPHQWHLWKHUDIWHUUHFHLSWRUZKLOHSKRWRFRS\LQJLW
DQGWKHQGLVVHPLQDWHGWKHUHOHYDQWLQIRUPDWLRQWR0HWFDOIH
DQG5D\6HH-$DW6HFRQG0XOKDOOVSHFXODWHVWKDW
HLWKHU0HWFDOIHRU5D\FRXOGKDYHRSHQHGWKHVHDOHGHQYHORSH
LQWKHPDLOURRPHPSOR\HH¶VPDLOER[UHDGWKHVWDWHPHQWDQG

-- 5 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
,Q KLV EULHI 0XOKDOO DUJXHV WKDW ³>V@SHFLDO DJHQWV KDYH WKH DELOLW\ WR
RSHQ XS DQG UHVHDO HQYHORSHV ZLWKRXW EHLQJ GHWHFWHG 5D\ ZDV LQ FRXQWHU
LQWHOOLJHQFH GXULQJ WKH &ROG :DU ZKHUH KH VSLHG RQ VSLHV 0HWFDOIH KDV
UHFHLYHG VSHFLDOL]HG WUDLQLQJ LQ VXUYHLOODQFH WHFKQLTXHV IURP 1HZ
6FRWODQG <DUG DQG WKH &HQWUDO ,QWHOOLJHQFH $JHQF\ ´ $SSHOODQW¶V
%U DW FLWDWLRQV RPLWWHG
WKHQUHVHDOHGWKHHQYHORSH6HH-$DW0XOKDOODVVHUWV
WKDWWKHSUDFWLFHRIRSHQLQJPDLODGGUHVVHGWRRWKHUV FDOOHG
³EDJJLQJ´ ZDVFRPPRQLQWKH/RXLVYLOOH)%,RIILFH6HH
-$ DW +H DOVR FODLPV WKDW 0HWFDOIH DQG 5D\ ZHUH
WUDLQHG WR RSHQ PDLO DQG UHVHDO HQYHORSHV ZLWKRXW EHLQJ
GHWHFWHG6HH-$DW7KLUG0XOKDOOVXJJHVWVWKDWWKH
PDLOURRPDWWKH/RXLVYLOOH)%,RIILFHZRXOGKDYHRSHQHGWKH
SDFNDJHZKLFKZDVDGGUHVVHGWR6$3XOOH\DQ³XQNQRZQ´
DJHQWXSRQGHOLYHU\DQGWKDW0HWFDOIHDQG5D\GLVFRYHUHGLWV
FRQWHQWVDVDUHVXOW6HH-$DW$SSHOODQW¶V%UDW
,Q RIIHULQJ WKHVH WKHRULHV 0XOKDOO SRLQWV WR WKH XQXVXDO
PDLOLQJ RI WKH SDFNDJH IURP :DVKLQJWRQ '& WR WKH
/RXLVYLOOH)%,RIILFH²3XOOH\WKH((2LQYHVWLJDWRUZRUNHG
RXWRIWKH0HPSKLVRIILFHVHH-$DW²DQGDWWHPSWV
WRXQGHUPLQHWKHFUHGLELOLW\RI%H\HU0HWFDOIHDQG5D\+H
DWWDFNV %H\HU¶V FUHGLELOLW\ E\ SRLQWLQJ WR PLQRU
LQFRQVLVWHQFLHVEHWZHHQWKH0DUFKPHPRFRPSRVHG
E\%H\HUDQG%H\HU¶VODWHUGHSRVLWLRQWHVWLPRQ\6HH-$DW
VHH DOVR $SSHOODQW¶V %U DW OLVWLQJ HLJKW
LQFRQVLVWHQFLHV +HDWWDFNVWKHFUHGLELOLW\RI0HWFDOIHDQG
5D\ E\ SRLQWLQJ WR 5D\¶V KLVWRU\ RI O\LQJ DQG IDOVLI\LQJ
GRFXPHQWV VHH -$ DW DQG 0HWFDOIH¶V KLVWRU\ RI
UHWDOLDWLQJLQ7LWOH9,,FDVHVVHH-$DW
0XOKDOOILOHGWKLVDFWLRQDJDLQVWWKH)%,DQGWKHQ$WWRUQH\
*HQHUDO5HQRRQ0DUFKDIWHUKDYLQJH[KDXVWHGKLV
DGPLQLVWUDWLYHUHPHGLHV7KHGHIHQGDQWVPRYHGWRGLVPLVV
WKHFDVHRULQWKHDOWHUQDWLYHIRUVXPPDU\MXGJPHQWSULRUWR
GLVFRYHU\ FODLPLQJ LQWHU DOLD WKDW 0XOKDOO KDG IDLOHG WR
HVWDEOLVK D SULPD IDFLH FDVH RI 7LWOH 9,, UHWDOLDWLRQ 7KH
GLVWULFW FRXUW WUHDWLQJ WKLV PRWLRQ DV RQH IRU VXPPDU\
MXGJPHQWGHQLHGWKHPRWLRQKROGLQJWKDW³WKHFLUFXPVWDQFHV
1R 0XOKDOOY$VKFURIWHWDO
,Q DQ XQSXEOLVKHG FDVH ZH KDYH SUHYLRXVO\ QRWHG ³$OWKRXJK WKH
SDUDGLJP HVWDEOLVKHG E\ 0F'RQQHOO> @'RXJODV &RUS Y *UHHQ ZDV
GHVLJQHG WR DFFRPPRGDWH GLVFULPLQDWLRQ FODLPV EDVHG RQ FLUFXPVWDQWLDO
HYLGHQFH D SODLQWLII UHO\LQJ RQ WKLV SDUDGLJP WR SURYH XQODZIXO UHWDOLDWLRQ
W\SLFDOO\ KDV GLUHFW HYLGHQFH WKDW WKH GHIHQGDQW ZDV DZDUH RI WKH
SODLQWLII>¶@V SURWHFWHG DFWLYLW\´ 3HWHUVRQ Y 'LDO\VLV &OLQLF ,QF 1R
:/ DW WK &LU 6HSW FLWDWLRQV
RPLWWHG
7KHIDFWVLQWKHSUHVHQWFDVHDUHVLPLODU0HWFDOIHDQG5D\
KDYHWHVWLILHGWKDWWKH\GLGQRWNQRZRI0XOKDOO¶VSURWHFWHG
DFWLYLW\ ZKHQ WKH\ WRRN WKH DGYHUVH HPSOR\PHQW DFWLRQ
%H\HU DOVR WHVWLILHG WKDW KH GLG QRW NQRZ RI 0XOKDOO¶V
SURWHFWHG DFWLYLW\ DQG WKXV WKDW KH GLG QRW FRQYH\ WKDW
LQIRUPDWLRQ WR HLWKHU 0HWFDOIH RU 5D\ 0XOKDOO DUJXHV LQ
UHVSRQVHWKDWQRQHRIWKHVHVWDWHPHQWVDUHFUHGLEOHEXWKHKDV
IDLOHGWRSURGXFHDQ\HYLGHQFHGLUHFWRUFLUFXPVWDQWLDOWR
UHEXW WKHVH GHQLDOV 0XOKDOO RIIHUV RQO\ FRQVSLUDWRULDO
WKHRULHVQRWWKHVSHFLILFIDFWVUHTXLUHGXQGHUWKH)HGHUDO5XOH
RI&LYLO3URFHGXUH&I9LVVHUY3DFNHU(QJ¶J$VVRFV
,QF)G WK&LU HQEDQF KROGLQJWKDW
VXPPDU\ MXGJPHQW ZDV DSSURSULDWH ZKHUH WKH LQIHUHQFHV
SODLQWLIIVRXJKWWRGUDZIURPHYLGHQFHZHUHDNLQWR³IOLJKWV
RIIDQF\VSHFXODWLRQVKXQFKHVLQWXLWLRQVRUUXPRUVDERXW
PDWWHUVUHPRWHIURP>SHUVRQDO@H[SHULHQFH´
,QPRVW7LWOH9,,UHWDOLDWLRQFDVHVWKHSODLQWLIIZLOOEHDEOH
WRSURGXFHGLUHFWHYLGHQFHWKDWWKHGHFLVLRQPDNLQJRIILFLDOV
NQHZ RI WKH SODLQWLII¶V SURWHFWHG DFWLYLW\ ,Q PDQ\ VXFK
FDVHVIRUH[DPSOHWKHDGYHUVHDFWLRQZLOOEHWDNHQE\WKH
VDPHVXSHUYLVRUWRZKRPWKHSODLQWLIIKDVPDGHFRPSODLQWV
LQ WKH SDVW %XW GLUHFW HYLGHQFH RI VXFK NQRZOHGJH RU
DZDUHQHVVLVQRWUHTXLUHGDQGDV0XOKDOOFRUUHFWO\DUJXHVD
SODLQWLII PD\ VXUYLYH VXPPDU\ MXGJPHQW E\ SURGXFLQJ
FLUFXPVWDQWLDOHYLGHQFHWRHVWDEOLVKWKLVHOHPHQWRIKHUFODLP
)RU H[DPSOH $OOHQ KHOG WKDW WKH SODLQWLII KDG SXW IRUZDUG
VXIILFLHQW FLUFXPVWDQWLDO HYLGHQFH WKDW KLV VXSHUYLVRU ZDV
DZDUHRIKLVSURWHFWHGDFWLYLW\ WKHILOLQJRIJULHYDQFHVLQWKDW
FDVH WRHVWDEOLVKWKLVHOHPHQWRIKLVFODLP6HH)GDW
,Q$OOHQWKHSODLQWLIIDQGHYHU\RWKHU$IULFDQ$PHULFDQ

-- 6 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
DQGWKHDGYHUVHHPSOR\PHQWDFWLRQWKURXJKFLUFXPVWDQWLDO
HYLGHQFH 7HPSRUDO SUR[LPLW\ ZKHQ FRXSOHG ZLWK RWKHU
IDFWV PD\ EH VXIILFLHQW LQ FHUWDLQ FDVHV WR HVWDEOLVK WKH
FDXVDOFRQQHFWLRQSURQJLQD7LWOH9,,FDVH6HHHJ1JX\HQ
Y &LW\ RI &OHYHODQG )G WK &LU
QRWLQJWKDW³WKHUHPD\EHFLUFXPVWDQFHVZKHUHHYLGHQFHRI
WHPSRUDOSUR[LPLW\DORQHZRXOGEHVXIILFLHQWWRVXSSRUW´WKH
LQIHUHQFHRIDFDXVDOFRQQHFWLRQEXWWKDWWHPSRUDOSUR[LPLW\
ZLWKRXWPRUHZDVLQVXIILFLHQWLQWKHFDVHEHIRUHWKHFRXUW
,Q WKH SUHVHQW FDVH KRZHYHU WKH GLVWULFW FRXUW JUDQWHG
VXPPDU\ MXGJPHQW EHFDXVH 0XOKDOO IDLOHG WR SURGXFH DQ\
GLUHFW RU FLUFXPVWDQWLDO HYLGHQFH IURP ZKLFK D UHDVRQDEOH
MXU\FRXOGLQIHUWKDW0HWFDOIHDQG5D\NQHZRUZHUHDZDUHRI
KLVSURWHFWHGDFWLYLW\
,Q)HQWRQY+L6$1,QF)G WK&LU WKLV
FRXUW DIILUPHG WKH JUDQW RI VXPPDU\ MXGJPHQW ZKHUH WKH
SODLQWLII ZDV XQDEOH WR SURGXFH HYLGHQFH VXIILFLHQW WR
HVWDEOLVKWKDWWKHLQGLYLGXDOVFKDUJHGZLWKWDNLQJWKHDGYHUVH
HPSOR\PHQWDFWLRQNQHZRIWKHSURWHFWHGDFWLYLW\6HHLGDW
7KHDGYHUVHDFWLRQZDVWKHWUDQVIHURIWKHSODLQWLIIWRWKH
³%´VKLIW7KH+L6$1FRXUWKHOG
$OWKRXJK)HQWRQPHWZLWK5LFHDQG'RQ7XUQHU5LFH¶V
VXSHUYLVRUDQGWKHSODQWVXSHULQWHQGHQWVKHLVXQDEOHWR
SURGXFH DQ\ HYLGHQFH WKDW WKH UHOHYDQW PDQDJHPHQW
GHFLVLRQPDNHUV ZKR PRYHG KHU WR WKH ³%´ VKLIW ²
5HEHFFD 6KHQN DQG -RKQ 0LOOHU ² NQHZ RI KHU
FRPSODLQWVZKHQWKH\GHFLGHGWRWUDQVIHUKHU6KHQN
WHVWLILHG WKDW VKH ZDV QRW LQIRUPHG RI SODLQWLII¶V
FRPSODLQWVXQWLO2FWREHU>IRXUGD\VDIWHU
)HQWRQ ZDV LQIRUPHG RI KHU WUDQVIHU@ $FFRUGLQJ WR
0LOOHU¶V WHVWLPRQ\ KH DQG 6KHQN GHFLGHG HLWKHU RQ
6HSWHPEHURU2FWREHUWKDWSODLQWLIIZDV
WR EH WUDQVIHUUHG WR WKH ³%´ VKLIW 7KHUHIRUH
>SODLQWLII@KDVQRWPHWKHUEXUGHQRIVKRZLQJWKDWKHU
SURWHFWHG DFWLYLW\ ZDV NQRZQ WR WKRVH ZKR PDGH WKDW
GHFLVLRQ
,G
1R 0XOKDOOY$VKFURIWHWDO
7KH VHFRQG PRWLRQ IRU VXPPDU\ MXGJPHQW GURSSHG $WWRUQH\
*HQHUDO 5HQR IURP WKH FDSWLRQ 6HH -$ DW EXW VHH -$ DW 'LVW &W
'RFNHW UHIHUULQJ WR PRWLRQ DV WKDW RI GHIHQGDQWV 5HQR DQG WKH )%,
7KH GLVWULFW FRXUW GLG QRW GHWHFW WKLV HUURU DQG JUDQWHG VXPPDU\ MXGJPHQW
WR WKH )%, LQ LWV RUGHU ZLWKRXW PHQWLRQ RI $WWRUQH\ *HQHUDO 5HQR 6HH
-$ DW 2UGHU 7KH GLVWULFW FRXUW GRFNHW UHFRUGHG WKLV RUGHU DV
JUDQWLQJ VXPPDU\ MXGJPHQW ³LQ IDYRU RI WKH )%,´ -$ DW
VXUURXQGLQJWKHLQLWLDWLRQRIWKHLQYHVWLJDWLRQDQG0XOKDOO¶V
UHPRYDO IURP WKH 7DVN )RUFH ZKHQ YLHZHG DV D ZKROH
UDLVH>@ DQ LQIHUHQFH RI UHWDOLDWLRQ E\ WKH )%, VXIILFLHQW WR
HVWDEOLVKDSULPDIDFLHFDVHRIFDXVDOFRQQHFWLRQ´-$DW
7KHGLVWULFWFRXUWQRWHGLQDIRRWQRWHWKDWLWVILQGLQJVLQWKLV
UHVSHFWZHUH³PDGHXQGHUWKHORZHUEXUGHQRISURRIUHTXLUHG
WR VXVWDLQ D SULPD IDFLH FDVH UDWKHU WKDQ WKDW ZKLFK LV
UHTXLUHG WR ZLQ D MXGJPHQW RQ WKH XOWLPDWH LVVXH RI
GLVFULPLQDWLRQ´-$DWQ,QLWVRSLQLRQWKHGLVWULFW
FRXUW GLVFXVVHG 0XOKDOO¶V WKHRU\ WKDW %H\HU KDG
FRPPXQLFDWHGWKHIDFWWKDW0XOKDOOZDVOLVWHGDVDZLWQHVVE\
+HQGHUVRQ WR 0HWFDOIH DQG 5D\ QRWLQJ WKH )%, DJHQWV¶
XQHTXLYRFDOGHQLDOVRQWKLVIURQWEXWFRQFOXGHGWKDW0XOKDOO
KDGSUHVHQWHGVXIILFLHQWFLUFXPVWDQWLDOHYLGHQFHRIDFDXVDO
FRQQHFWLRQ EHWZHHQ WKH SURWHFWHG DFWLYLW\ DQG WKH DGYHUVH
DFWLRQWRVXUYLYHVXPPDU\MXGJPHQW
,QWKLVRSLQLRQLVVXHGRQ$SULOWKHGLVWULFWFRXUW
GLG QRW WUHDW WKH LVVXH RI WKH )%, DJHQWV¶ NQRZOHGJH DV D
VHSDUDWHHOHPHQWRI0XOKDOO¶VSULPDIDFLHFDVH7KH)%,
UHQHZHGLWVPRWLRQIRUVXPPDU\MXGJPHQWDWWKHFRQFOXVLRQ
RIGLVFRYHU\2QHRIWKHPDLQWKUXVWVRIWKH)%,¶VUHQHZHG
PRWLRQIRUVXPPDU\MXGJPHQWZDVWKDW0XOKDOOFRXOGQRW
HVWDEOLVKDSULPDIDFLHFDVHRIUHWDOLDWLRQEHFDXVHKHFRXOGQRW
³GHPRQVWUDWHWKDWWKH)%,NQHZWKDWKLVQDPHZDVOLVWHGDVD
ZLWQHVVRQ+HQGHUVRQ¶VVLJQHGVZRUQVWDWHPHQW´-$DW
7R VXSSRUW LWV DUJXPHQW WKDW VXFK NQRZOHGJH ZDV D
VHSDUDWHHOHPHQWRI0XOKDOO¶VSULPDIDFLHFDVHWKH)%,FLWHG
RXUGHFLVLRQLQ)HQWRQY+L6$1,QF)G WK
&LU 7KH)%,DUJXHG

-- 7 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
0XOKDOO¶V 5HVSRQVH SURSHUO\ OLVWHG $WWRUQH\ *HQHUDO 5HQR DV D
GHIHQGDQW 6HH -$ DW
$IWHU H[WHQVLYH GLVFRYHU\ SODLQWLII FDQ SRLQW WR QR
HYLGHQFH ZKDWVRHYHU WKDW 66$ 0HWFDOIH NQHZ WKDW
SODLQWLII ZDV OLVWHG DV D ZLWQHVV RQ 0V +HQGHUVRQ¶V
VWDWHPHQWDWWKHWLPHKHVHQWKLV)HEUXDU\OHWWHU
WRWKH-&3'
,W DSSHDUV WKDW SODLQWLII¶V RQO\ ³HYLGHQFH´ RQ WKH
HPSOR\HUNQRZOHGJHSURQJRIKLVSULPDIDFLHFDVHLVWKH
FORVHQHVVLQWLPHRIWZRHYHQWVWKHUHFHLSWLQWKH)%,
/RXLVYLOOH RIILFH RI +HQGHUVRQ¶V 6LJQHG 6ZRUQ
VWDWHPHQW RQ )HEUXDU\ RU DQG WKH
WUDQVPLWWDO RI D OHWWHU IURP >0HWFDOIH@ WR SODLQWLII¶V
HPSOR\HURQ)HEUXDU\UHTXHVWLQJDUHYLHZRI
KLVWLPHVKHHWV
+RZHYHUWKLVLVPHUHVSHFXODWLRQDVSODLQWLIIFRQFHGHG
LQ KLV GHSRVLWLRQ RWKHU WKDQ WKH FORVHQHVV LQ WLPH
EHWZHHQWKHWZRHYHQWVKHKDV QR HYLGHQFHWKDW66$
0HWFDOIHNQHZWKDWKHZDVOLVWHGE\0V+HQGHUVRQDVD
ZLWQHVV
-$DW
0XOKDOO UHVSRQGHG WR WKH )%,¶V UHQHZHG PRWLRQ IRU
VXPPDU\MXGJPHQWE\SRLQWLQJWRWKHGLVWULFWFRXUW¶VSULRU
ILQGLQJWKDWKHKDGHVWDEOLVKHGDSULPDIDFLHFDVHRI7LWOH9,,
UHWDOLDWLRQ6HH-$DW 5HVSRQVH 0XOKDOODOVRFODLPHG
WKDW KLV SULPD IDFLH FDVH KDG EHHQ ³VWUHQJWKHQHG WKURXJK
GLVFRYHU\´ -$ DW EHFDXVH RI WKH IDFWV UHJDUGLQJ WKH
PLVKDQGOLQJRIWKH3XOOH\SDFNDJHDQGFUHGLELOLW\LVVXHVWKDW
KDGFRPHWROLJKW,QGLVFXVVLQJWKHDSSOLFDEOHODZKRZHYHU
0XOKDOO¶V UHVSRQVH IDLOHG WR QRWH WKH GLVWLQFWLRQ GUDZQ LQ
)HQWRQ DQG RWKHU FDVHV EHWZHHQ GHPRQVWUDWLQJ WKDW D
UHOHYDQW GHFLVLRQPDNHU NQHZ RI WKH SODLQWLII¶V SURWHFWHG
DFWLYLW\ DQG HVWDEOLVKLQJ D FDXVDO OLQN EHWZHHQ WKH
SURWHFWHG DFWLYLW\ DQG WKH DGYHUVH DFWLRQ WKURXJK
FLUFXPVWDQWLDO HYLGHQFH 7KXV 0XOKDOO DUJXHG WKDW IDFWV
1R 0XOKDOOY$VKFURIWHWDO
LQDFWLYLW\SURWHFWHGE\7LWOH9,, SODLQWLII¶VH[HUFLVHRIKLV
FLYLOULJKWVZDVNQRZQE\WKHGHIHQGDQW WKDWWKHUHDIWHU
WKH GHIHQGDQW WRRN DQ HPSOR\PHQW DFWLRQ DGYHUVH WR WKH
SODLQWLIIDQG WKDWWKHUHZDVDFDXVDOFRQQHFWLRQEHWZHHQ
WKHSURWHFWHGDFWLYLW\DQGWKHDGYHUVHHPSOR\PHQWDFWLRQ´
((2&Y$YHU\'HQQLVRQ&RUS)G WK&LU
6HHDOVR/LWWOHY%3([SORUDWLRQ 2LO&R)G
WK &LU VDPH $OOHQ Y 0LFK 'HS¶W RI
&RUU )G WK &LU VDPH &I
7KDGGHXV;Y%ODWWHU)G Q WK&LU
HQEDQF VWDWLQJJHQHUDOWHVWIRUUHWDOLDWLRQFODLPVDQG
QRWLQJ WKDW WKH WHVW LV RIWHQ VWDWHG DV ³D IRXUSURQJ WHVW´
WUHDWLQJWKHGHIHQGDQW¶VNQRZOHGJHRIWKHSURWHFWHGFRQGXFW
DVWKHIRXUWKHOHPHQW 6XPPDU\MXGJPHQWLVSURSHUZKHUH
WKH SODLQWLII IDLOV WR SUHVHQW HYLGHQFH VXIILFLHQW WR FUHDWH D
GLVSXWH RI PDWHULDO IDFW ZLWK UHVSHFW WR DQ HOHPHQW RI KLV
UHWDOLDWLRQFODLP6HHHJ$OOHQ)GDW
:HDJUHHZLWKWKHGLVWULFWFRXUW¶VFRQFOXVLRQWKDW0XOKDOO
KDV IDLOHG WR SUHVHQW VXIILFLHQW HYLGHQFH IURP ZKLFK D
UHDVRQDEOHMXU\FRXOGLQIHUWKDW0HWFDOIHDQGRU5D\NQHZ
WKDW +HQGHUVRQ KDG OLVWHG KLP DV D ZLWQHVV LQ KHU ((2
FRPSODLQW 2Q DSSHDO 0XOKDOO DUJXHV WKDW ³D ZHDOWK RI
FRPSHOOLQJHYLGHQFHHVWDEOLVKHVWKDW0HWFDOIHDQG5D\KDG
WKH RSSRUWXQLW\ WR OHDUQ 0XOKDOO ZDV DQ ((2 ZLWQHVV´
$SSHOODQW¶V%UDWDQGWKDW³>W@KHWULDOFRXUWKDVLQHIIHFW
UHTXLUHG0XOKDOOWRSURGXFHGLUHFWSURRIRIUHWDOLDWLRQ´LGDW
%XW 0XOKDOO FRQWHQGV ³WKH FDVHV IURP WKLV DQG RWKHU
&LUFXLWV DUH FOHDU WKDW D MXU\ TXHVWLRQ FDQ EH FUHDWHG IRU D
UHWDOLDWLRQFODLPEDVHGVROHO\XSRQFLUFXPVWDQWLDOHYLGHQFH²
LHWHPSRUDOSUR[LPLW\DQGFLUFXPVWDQFHVDVDZKROH²DV
WRWKHμFDXVDOFRQQHFWLRQ¶HOHPHQWRIWKHFODLP´,GDW
$V WKH ODVW VWDWHPHQW LQGLFDWHV 0XOKDOO¶V DUJXPHQW RQ
DSSHDOODUJHO\LJQRUHVWKHNQRZOHGJHSURQJRIKLV7LWOH9,,
FDVHDQGIRFXVHVRQWKHFDXVDOFRQQHFWLRQSURQJ7KHGLVWULFW
FRXUWGLGQRWJUDQWVXPPDU\MXGJPHQWWRWKHGHIHQGDQWVLQWKH
SUHVHQWFDVHEHFDXVHLWGHWHUPLQHGWKDWDSODLQWLIIPD\QRW
PHHWKLVEXUGHQRIFUHDWLQJDQLVVXHRIPDWHULDOIDFWRQWKH
LVVXHRIDFDXVDOFRQQHFWLRQEHWZHHQKLVSURWHFWHGDFWLYLW\

-- 8 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
6LPLODUO\ LQ WKH SUHVHQW FDVH 0XOKDOO DOOHJHV 7LWOH 9,,
UHWDOLDWLRQ E\ WKH )%, WKH )%, LV D VXEXQLW RI WKH -XVWLFH
'HSDUWPHQW7KHUHIRUHWKHSURSHUGHIHQGDQWLVWKH$WWRUQH\
*HQHUDO WKH KHDG RI WKH -XVWLFH 'HSDUWPHQW *LYHQ WKH
FKDQJHLQSUHVLGHQWLDODGPLQLVWUDWLRQ$WWRUQH\*HQHUDO-RKQ
$VKFURIWLVWKHSURSHUGHIHQGDQWLQWKHSUHVHQWFDVH6HH)HG
5 $SS 3 F 7KXV ZH DIILUP WKH GLVWULFW FRXUW¶V
GLVPLVVDO RI 0XOKDOO¶V FODLP DJDLQVW WKH )%, RQ WKLV
DOWHUQDWLYH JURXQG 7KH PHULW RI 0XOKDOO¶V 7LWOH 9,,
UHWDOLDWLRQFODLPDJDLQVWWKHDWWRUQH\JHQHUDOLVGLVFXVVHGLQ
WKHQH[WVHFWLRQ
% 6XPPDU\ -XGJPHQW RQ 0XOKDOO¶V 7LWOH 9,,
5HWDOLDWLRQ&ODLP
:HUHYLHZWKHJUDQWRIVXPPDU\MXGJPHQWGHQRYR$VZH
H[SODLQHGLQ(PSOR\HUV,QVXUDQFHRI:DXVDXY3HWUROHXP
6SHFLDOLWLHV,QF)G WK&LU
7KH PRYLQJ SDUW\ QHHG QRW VXSSRUW LWV PRWLRQ ZLWK
HYLGHQFHGLVSURYLQJWKHQRQPRYLQJSDUW\¶VFODLP EXW
QHHGRQO\³μVKRZ>@¶²WKDWLVSRLQW>@RXWWRWKHGLVWULFW
FRXUW²WKDWWKHUHLVDQDEVHQFHRIHYLGHQFHWRVXSSRUW
WKHQRQPRYLQJSDUW\¶VFDVH´&HORWH[&RUSY&DWUHWW
86 7KH SLYRWDO TXHVWLRQ LV
ZKHWKHU WKH SDUW\ EHDULQJ WKH EXUGHQ RI SURRI KDV
SUHVHQWHGDMXU\TXHVWLRQDVWRHDFKHOHPHQWRILWVFDVH
&HORWH[ 86 DW 7KH SODLQWLII PXVW SUHVHQW
PRUHWKDQDPHUHVFLQWLOODRIHYLGHQFHLQVXSSRUWRIKLV
SRVLWLRQWKHSODLQWLIIPXVWSUHVHQW³HYLGHQFHRQZKLFK
WKH MXU\ FRXOG UHDVRQDEO\ ILQG IRU WKH SODLQWLII´
$QGHUVRQ Y /LEHUW\ /REE\ ,QF 86
³7KHμPHUHSRVVLELOLW\¶RIDIDFWXDOGLVSXWHLVQRW
HQRXJK´0LWFKHOOY7ROHGR+RVS)G
WK&LU TXRWLQJ*UHJJY$OOHQ%UDGOH\&R
)G WK&LU
,GDW SDUDOOHOFLWDWLRQVRPLWWHG
:HKDYHKHOGWKDWWRHVWDEOLVKDSULPDIDFLHFDVHRI7LWOH
9,,UHWDOLDWLRQDSODLQWLIIPXVWVKRZWKDW³ SODLQWLIIHQJDJHG
1R 0XOKDOOY$VKFURIWHWDO
XQFRYHUHG WKURXJK GLVFRYHU\ IXUWKHU VXSSRUWHG WKH
FLUFXPVWDQWLDOHYLGHQFHWKDWKHKDGDOUHDG\SUHVHQWHGZLWK
UHVSHFWWRWKHFDXVDOFRQQHFWLRQVHH-$DWDQGWKDW
WKH)%,KDGIDLOHGWRUHEXWKLVSULPDIDFLHFDVHVHH-$DW

7KHGLVWULFWFRXUWJUDQWHGWKH)%,VXPPDU\MXGJPHQWRQ
1RYHPEHU7KHGLVWULFWFRXUWFRQFOXGHGWKDW
LQWKHILQDODQDO\VLV0XOKDOOKDVDEVROXWHO\QRWKLQJWR
UHIXWH WKH XQHTXLYRFDO VWDWHPHQWV RI WKH LQGLYLGXDOV
LQYROYHGWKDWQHLWKHU0HWFDOIHQRU5D\NQHZWKDW0XOKDOO
ZDVOLVWHGDVDZLWQHVVIRU>+HQGHUVRQ@1RWKLQJZDV
UHYHDOHG LQ GLVFRYHU\ WR VXEVWDQWLDWH RU EROVWHU WKLV
LQIHUHQFHRIUHWDOLDWLRQJOHDQHGVROHO\IURPWKHWLPLQJRI
WKHDUULYDORIWKHFRPSODLQWLQWKHRIILFHDQGWKHGUDIWLQJ
DQGVHQGLQJRIWKHOHWWHU
-$DW
7KLVWLPHO\DSSHDOIROORZHG
,,$1$/<6,6
$$SSHOODWH-XULVGLFWLRQ
$VQRWHGVXSUDWKHGLVWULFWFRXUW¶VRUGHUJUDQWLQJWKH)%,
VXPPDU\MXGJPHQWIDLOHGWRDGGUHVVWKHVWDWXVRI0XOKDOO¶V
FODLP DJDLQVW WKH DWWRUQH\ JHQHUDO 7KLV ZDV PHUHO\ D
WHFKQLFDOHUURUDVWKHGLVWULFWFRXUWFOHDUO\LQWHQGHGWRJUDQW
VXPPDU\MXGJPHQWWRERWKGHIHQGDQWVDQGLVVXHDILQDORUGHU
LQWKHFDVH6HH-$DW 2UGHU ³>7@KLVLVDILQDORUGHU´
6HHDOVR-$DW 'RFNHW ³7KLVLVDILQDORUGHU´
'HVSLWHWKHFOHDULQWHQWRIWKHGLVWULFWFRXUWZHPXVWILUVW
DGGUHVV ZKHWKHU WKH GLVWULFW FRXUW LQ IDFW LVVXHG D ILQDO
DSSHDODEOHRUGHULQWKHSUHVHQWFDVH7KH1LQWK&LUFXLWKDV
KHOGWKDWWKHGLVWULFWFRXUW¶VLQDGYHUWHQWRPLVVLRQRIDSDUW\¶V
QDPHGRHVQRWGHIHDWWKHDSSHOODWHFRXUW¶VMXULVGLFWLRQZKHUH
WKH GLVWULFW FRXUW ³FOHDUO\ LQWHQGHG´ LWV JUDQW RI VXPPDU\
MXGJPHQWWRFRQVWLWXWHDILQDODSSHDODEOHRUGHU-RKQVRQY

-- 9 of 10 --

0XOKDOOY$VKFURIWHWDO 1R
0HOW]HU)G WK&LU FHUWGHQLHG
86 :HDGRSWWKLVDSSURDFKDQGWUHDWWKHGLVWULFW
FRXUW¶V 1RYHPEHU RUGHU DV D ILQDO RUGHU FRPLQJ
ZLWKLQWKLVFRXUW¶VMXULVGLFWLRQSXUVXDQWWR86&†
7KLV DSSURDFK PDNHV VHQVH EHFDXVH WKH GLVWULFW FRXUW¶V
RUGHU WHUPLQDWHG WKH OLWLJDWLRQ RQ WKH PHULWV 6HH 6(& Y
%DVLF(QHUJ\ $IILOLDWHG5HV,QF)G WK
&LU ³$μILQDOGHFLVLRQ¶JHQHUDOO\LVRQHZKLFKHQGV
WKHOLWLJDWLRQRQWKHPHULWVDQGOHDYHVQRWKLQJIRUWKHFRXUWWR
GR EXW H[HFXWH WKH MXGJPHQW´ TXRWLQJ &DWOLQ Y 8QLWHG
6WDWHV86 ,QDGGLWLRQWKLVDSSURDFK
LVZDUUDQWHGJLYHQWKDWQHLWKHUSDUW\ZRXOGEHSUHMXGLFHGE\
WUHDWLQJWKHFRXUW¶VRUGHUDVILQDO,Q%DQNHUV7UXVW&RY
0DOOLV86 WKH6XSUHPH&RXUWFRQVLGHUHG
WKHLVVXH³ZKHWKHUDGHFLVLRQRIDGLVWULFWFRXUWFDQEHDμILQDO
GHFLVLRQ¶ IRU SXUSRVHV RI † LI QRW VHW IRUWK RQ D
GRFXPHQWVHSDUDWHIURPWKHRSLQLRQ´DVUHTXLUHGE\)HGHUDO
5XOHRI&LYLO3URFHGXUH,GDW7KH&RXUWFRQFOXGHG
WKDW WKH VHSDUDWHGRFXPHQW UXOH FRXOG EH ZDLYHG E\ WKH
SDUWLHVDWOHDVWZKHUH³WKH'LVWULFW&RXUWFOHDUO\HYLGHQFHGLWV
LQWHQWWKDWWKHRSLQLRQDQGRUGHUIURPZKLFKDQDSSHDOZDV
WDNHQZRXOGUHSUHVHQWWKHILQDOGHFLVLRQLQWKHFDVH´,GDW
,QUHDFKLQJWKLVFRQFOXVLRQWKH&RXUWUHDVRQHGWKDWWKH
VHSDUDWHGRFXPHQW UXOH ZDV LQWHQGHG ³WR FODULI\ ZKHQ WKH
WLPHIRUDSSHDOEHJLQVWRUXQ´LG DWDQGWKDWLWV
DSSOLFDWLRQZKHUHWKHWLPHOLQHVVRIDQDSSHDOZDVQRWDWLVVXH
ZRXOGPHUHO\FDXVHGHOD\
&HUWDLQW\DVWRWLPHOLQHVVKRZHYHULVQRWDGYDQFHGE\
KROGLQJWKDWDSSHOODWHMXULVGLFWLRQGRHVQRWH[LVWDEVHQW
DVHSDUDWHMXGJPHQW,IE\HUURUDVHSDUDWHMXGJPHQWLV
QRWILOHGEHIRUHDSDUW\DSSHDOVQRWKLQJEXWGHOD\ZRXOG
IORZIURPUHTXLULQJWKHFRXUWRIDSSHDOVWRGLVPLVVWKH
DSSHDO8SRQGLVPLVVDOWKHGLVWULFWFRXUWZRXOGVLPSO\
ILOHDQGHQWHUWKHVHSDUDWHMXGJPHQWIURPZKLFKDWLPHO\
DSSHDOZRXOGWKHQEHWDNHQ:KHHOVZRXOGVSLQIRUQR
SUDFWLFDOSXUSRVH
,GDW
1R 0XOKDOOY$VKFURIWHWDO
7KH OHDGLQJ WUHDWLVH RQ IHGHUDO SURFHGXUH DGYRFDWHV WKLV SUDJPDWLF
DSSURDFK WR VXFK WHFKQLFDO GHIHFWV ³>3@UDJPDWLF DVVHVVPHQWV RI WKH
GLVWULFW FRXUW DFWLRQV PD\ VKRZ WKDW LQ IDFW ILQDOLW\ KDV UHVXOWHG IURP
GLVSRVLWLRQ DV WR DOO SDUWLHV 3DUWLHV ZKR KDYH EHHQ GLVPLVVHG GH IDFWR
ZLOO EH FRXQWHG DV LI DFWXDOO\ GLVPLVVHG 1RQH RI WKHVH SUDFWLFHV
FDXVHV DQ\ GLIILFXOW\´ $ &KDUOHV $ODQ :ULJKW $UWKXU 5 0LOOHU
(GZDUG + &RRSHU )HGHUDO 3UDFWLFH DQG 3URFHGXUH † DW
G HG IRRWQRWHV RPLWWHG
6LPLODUO\UHPDQGLQJWKHSUHVHQWFDVHIRUHQWU\RIDQRUGHU
JUDQWLQJVXPPDU\MXGJPHQWWRWKHDWWRUQH\JHQHUDOEHIRUH
UHYLHZLQJWKDWMXGJPHQWRQWKHPHULWVZRXOGPHUHO\PDNH
³>Z@KHHOVVSLQIRUQRSUDFWLFDOSXUSRVH´7KH$SSHOOHHV
ZKRUDLVHWKLVLVVXHLQWKHLUEULHIUHTXHVWWKDWZHGLVPLVVWKH
SUHVHQWDSSHDOUHPDQGWKHFDVHWRWKHGLVWULFWFRXUWIRUHQWU\
RI D ILQDO RUGHU DQG WKHQ FRQVLGHU WKH FDVH RQ WKH PHULWV
ZLWKRXWIXUWKHUEULHILQJRURUDODUJXPHQW6HH$SSHOOHHV¶%U
DW %XW VXFK DQ DSSURDFK ZRXOG VHUYH QR SUDFWLFDO
SXUSRVH,QVWHDGZHZLOOSXUVXHDPRUHSUDJPDWLFDSSURDFK
WUHDWLQJWKHGLVWULFWFRXUW¶VRUGHUDVDILQDODSSHDODEOHRUGHU
DQGWKXVSURFHHGLQJWRWKHPHULWVRIWKHFDVH
0RUHRYHU WKLV SUDJPDWLF DSSURDFK LV DSSURSULDWH ZKHUH
WKHUHLVUHDOO\RQO\RQHGHIHQGDQWLQDFDVH²LQWKLVFDVHWKH
DWWRUQH\JHQHUDO7KH$SSHOOHHVDUHFRUUHFWLQDUJXLQJRQ
DSSHDOWKDWWKH)%,LVQRWDSURSHUGHIHQGDQWLQD7LWOH9,,
DFWLRQ,Q+DQFRFNY(JJHU)G WK&LU ZH
FRQVWUXHG86&†H F ZKLFK³PDQGDWHVZKR
PD\EHDSURSHUGHIHQGDQWLQFLYLODFWLRQVEURXJKWE\IHGHUDO
HPSOR\HHV WR HQIRUFH ULJKWV XQGHU 7LWOH 9,,´ LG DW DV
UHTXLULQJ WKDW SODLQWLIIV VXLQJ VXEXQLWV RI FDELQHWOHYHO
GHSDUWPHQWVQDPHWKHUHOHYDQWGHSDUWPHQWKHDGDVGHIHQGDQW
VHHLGDW,Q+DQFRFNWKHSODLQWLIIVXHGWKHFRPPLVVLRQHU
RIWKH,56IRUUDFLDOGLVFULPLQDWLRQ7KHGLVWULFWFRXUWJUDQWHG
GHIHQGDQW¶V PRWLRQ WR GLVPLVV FRQFOXGLQJ WKDW WKH ,56
FRPPLVVLRQHU ZDV QRW D SURSHU GHIHQGDQW XQGHU † H
F 7KLVFRXUWDIILUPHGKROGLQJWKDWWKH6HFUHWDU\RIWKH
7UHDVXU\DVKHDGRIWKH7UHDVXU\'HSDUWPHQWZDVWKHSURSHU
GHIHQGDQWLQDVXLWDOOHJLQJUDFLDOGLVFULPLQDWLRQE\WKH,56
6HHLG

-- 10 of 10 --