03a0096p.06

7KH +RQRUDEOH 0\URQ + %ULJKW 6HQLRU &LUFXLW -XGJH RI WKH 8QLWHG
6WDWHV &RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW 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
:$/7(5 68//,9$1 ,,,
3ODLQWLII$SSHOODQW
%5,$1$ 68//,9$1HWDO
3ODLQWLIIV
Y
7('' 6+,03HWDO
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW'D\WRQ
1R²6XVDQ-'ORWW'LVWULFW-XGJH
$UJXHG0DUFK
'HFLGHGDQG)LOHG$SULO
%HIRUH&2/(*,/0$1DQG%5,*+7&LUFXLW-XGJHV
6XOOLYDQHWDOY6KLPSHWDO 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 3DXO : 0LOOV 05 '212)) $1'
$662&,$7(6 'D\WRQ 2KLR IRU $SSHOODQW 6KDXQ $
5REHUWV )5(81' )5((=( $512/' 'D\WRQ 2KLR
*UHJRU\ 3 'XQVN\ $66,67$17 81,7(' 67$7(6
$77251(< 'D\WRQ 2KLR IRU $SSHOOHHV 21 %5,()
3DXO : 0LOOV 0DULO\Q 5 'RQRII 05 '212)) $1'
$662&,$7(6 'D\WRQ 2KLR IRU $SSHOODQW 6WHSKHQ &
)LQGOH\ )5(81' )5((=( $512/' 'D\WRQ 2KLR
3DWULFN ' 4XLQQ $66,67$17 81,7(' 67$7(6
$77251(<'D\WRQ2KLRIRU$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
521$/' /(( *,/0$1 &LUFXLW -XGJH 2Q 6XQGD\
0DUFK7HGG6KLPSDQG:DOWHU6XOOLYDQ,,,ZHUH
LQYROYHGLQDWUDIILFDFFLGHQWWKDWVHYHUHO\LQMXUHG6XOOLYDQ
6KLPSDFLYLODWWRUQH\HPSOR\HGE\WKH8QLWHG6WDWHV$LU
)RUFHZDVUHWXUQLQJKRPHIURPKLVRIILFHDWWKH$LU)RUFH
EDVH ZKHUH KH KDG SLFNHG XS GRFXPHQWV DQG RWKHUZLVH
SUHSDUHGIRUDZRUNUHODWHGWULSWKHIROORZLQJGD\
6XOOLYDQDQGKLVFKLOGUHQEURXJKWDQDFWLRQDJDLQVW6KLPS
LQVWDWHFRXUWIRUGDPDJHVDQGORVVRIFRQVRUWLXP6KLPS
VXEVHTXHQWO\ ILOHG D SHWLWLRQ ZLWK WKH VWDWH FRXUW IRU
³FHUWLILFDWLRQ RI VFRSH RI HPSOR\PHQW´ ZKLFK LI JUDQWHG
ZRXOGKDYHHIIHFWLYHO\VXEVWLWXWHGWKH8QLWHG6WDWHVDVWKH
GHIHQGDQWLQWKHDFWLRQ7KH8QLWHG6WDWHVWKHQUHPRYHGWKH
DFWLRQ WR IHGHUDO FRXUW $GRSWLQJ WKH 5HSRUW DQG
5HFRPPHQGDWLRQRIWKHPDJLVWUDWHMXGJHWKHGLVWULFWFRXUW
GHQLHG 6KLPS¶V SHWLWLRQ )RU WKH IROORZLQJ UHDVRQV ZH
$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW

-- 1 of 4 --

1R 6XOOLYDQHWDOY6KLPSHWDO
,%$&.*5281'
6KLPS LV D FLYLO WULDO DWWRUQH\ ZLWK WKH 'LUHFWRUDWH RI
&RQWUDFW$SSHDOVRIWKH$LU)RUFH0DWHULDO&RPPDQG,QWKLV
FDSDFLW\KHUHSUHVHQWVWKH$LU)RUFHLQOLWLJDWLRQUHODWHGWRLWV
FRQWUDFWXDOGLVSXWHVRQWKH:HVW&RDVWRIWKH8QLWHG6WDWHV
DQGLQ$VLD+HVSHQGVVRPHZKHUHEHWZHHQWZHQW\DQGILIW\
SHUFHQWRIKLVZRUNWLPHLQWKRVHORFDWLRQVDQGWKHUHPDLQLQJ
ZRUNWLPHDWWKH:ULJKW3DWWHUVRQ$LU)RUFH%DVH $)% LQ
'D\WRQ2KLRZKHUHKHLVDVVLJQHGDQRIILFH
6KLPSZDVVFKHGXOHGWRIO\IURPWKH'D\WRQ$LUSRUWWR/RV
$QJHOHV &DOLIRUQLD RQ 0RQGD\ 0DUFK LQ
FRQQHFWLRQ ZLWK KLV MRE +H GURYH WR WKH $)% ZLWK KLV
FKLOGUHQWKHGD\EHIRUH6XQGD\0DUFKEHFDXVHKH
KDGOHIWYDULRXVGRFXPHQWVDWKLVRIILFHWKDWKHQHHGHGIRUWKH
WULS$IWHUVSHQGLQJDSSUR[LPDWHO\IRXUKRXUVDWWKHRIILFH
FRS\LQJGRFXPHQWVDQGRWKHUZLVHSUHSDULQJIRUKLVWUDYHOVKH
OHIWWKH$)%ZLWKKLVFKLOGUHQWRUHWXUQKRPH
2Q WKH ULGH KRPH 6KLPS¶V FDU FROOLGHG ZLWK 6XOOLYDQ¶V
PRWRUF\FOHQHDUWKHH[LWUDPSIRU5RXWHVHYHUHO\LQMXULQJ
6XOOLYDQ6KLPSUHSRUWHGWKHFROOLVLRQWRKLVVXSHUYLVRUVEXW
RQO\ EHFDXVH WKH DFFLGHQW GHOD\HG KLV GHSDUWXUH IRU /RV
$QJHOHVWKHIROORZLQJGD\
2Q-DQXDU\6XOOLYDQDQGKLVFKLOGUHQILOHGVXLW
DJDLQVW6KLPSLQWKH&RPPRQ3OHDV&RXUWRI0RQWJRPHU\
&RXQW\2KLRDVVHUWLQJDFODLPEDVHGXSRQ6KLPS¶VDOOHJHG
QHJOLJHQFHLQFDXVLQJWKHDFFLGHQW$IWHUWKH8QLWHG6WDWHV
UHIXVHGWRFHUWLI\WKDW6KLPSZDVDFWLQJLQWKHVFRSHRIKLV
HPSOR\PHQWDWWKHWLPHRIWKHDFFLGHQW6KLPSILOHGDSHWLWLRQ
IRU FHUWLILFDWLRQ RI VFRSH RI HPSOR\PHQW SXUVXDQW WR WKH
)HGHUDO(PSOR\HHV/LDELOLW\5HIRUPDQG7RUW&RPSHQVDWLRQ
$FWRI WKH³:HVWIDOO$FW´ 86&†7KH
JRYHUQPHQW WKHQ UHPRYHG WKH DFWLRQ WR IHGHUDO FRXUW
$GRSWLQJ WKH PDJLVWUDWH MXGJH¶V 5HSRUW DQG
5HFRPPHQGDWLRQWKHGLVWULFWFRXUWGHQLHG6KLPS¶VSHWLWLRQ
7KLVDSSHDOIROORZHG
6XOOLYDQHWDOY6KLPSHWDO 1R
,,$1$/<6,6
3XUVXDQWWRWKH:HVWIDOO$FWWKH8QLWHG6WDWHVVWDQGVLQWKH
VKRHVRILWVHPSOR\HHVZKRVH³QHJOLJHQWRUZURQJIXODFW>V@´
LQWKHVFRSHDQGFRXUVHRIWKHLUIHGHUDOHPSOR\PHQWFDXVHDQ
LQMXU\86&† E 7KH$FWHIIHFWLYHO\³VKLHOGV
IHGHUDO HPSOR\HHV IURP OLDELOLW\ IRU FRPPRQ ODZ WRUWV
FRPPLWWHGZLWKLQWKHVFRSHRIHPSOR\PHQW´+HQVRQY1DW¶O
$HURQDXWLFV 6SDFH$GPLQ)G WK&LU
³,QWKHHYHQWWKDWWKH$WWRUQH\*HQHUDOKDVUHIXVHGWR
FHUWLI\VFRSHRIRIILFHRUHPSOR\PHQWXQGHUWKLVVHFWLRQWKH
HPSOR\HHPD\DWDQ\WLPHEHIRUHWULDOSHWLWLRQWKHFRXUWWR
ILQGDQGFHUWLI\WKDWWKHHPSOR\HHZDVDFWLQJZLWKLQWKHVFRSH
RIKLVRIILFHRUHPSOR\PHQW´86&† G :H
UHYLHZTXHVWLRQVUHJDUGLQJFHUWLILFDWLRQXQGHUWKH:HVWIDOO
$FWGHQRYR6LQJOHWRQY8QLWHG6WDWHV)G
WK&LU
³>:@KHWKHUDQHPSOR\HHZDVDFWLQJZLWKLQWKHVFRSHRIKLV
HPSOR\PHQWLVDTXHVWLRQRIODZQRWIDFWPDGHLQDFFRUGDQFH
ZLWKWKHODZRIWKHVWDWHZKHUHWKHFRQGXFWRFFXUUHG´,G
8QGHU2KLRODZDQHPSOR\HHDFWVZLWKLQWKHVFRSHRIKLV
HPSOR\PHQW ³ZKHQ WKH DFW FDQ IDLUO\ DQG UHDVRQDEO\ EH
GHHPHGWREHDQRUGLQDU\DQGQDWXUDOLQFLGHQWRUDWWULEXWHRI
WKH VHUYLFHWREHUHQGHUHGRUDQDWXUDOGLUHFWDQGORJLFDO
UHVXOWRILW´3RVLQY$%&0RWRU&RXUW+RWHO,QF
1(G 2KLR 7KH2KLR6XSUHPH&RXUWKDV
GHYLVHGDWKUHHSURQJWHVWWRDVVHVVZKHWKHUHPSOR\HHVDUH
DFWLQJZLWKLQWKHVFRSHRIWKHLUHPSOR\PHQWZKHQWKH\FDXVH
DQLQMXU\ZKLOHRSHUDWLQJWKHLURZQYHKLFOHV
WKH HPSOR\HU KDG H[SUHVVO\ RU LPSOLHGO\
DXWKRUL]HGWKHHPSOR\HHWRXVHKLVRZQDXWRPRELOHLQ
GRLQJ WKH ZRUN KH ZDV HPSOR\HG WR GR WKH
HPSOR\HHZDVDWWKHWLPHRIVXFKQHJOLJHQFHGRLQJZRUN
WKDWKHZDVHPSOR\HGWRGRDQG WKHHPSOR\HH
ZDVVXEMHFWWRWKHGLUHFWLRQDQGFRQWURORIWKHHPSOR\HU
DVWRWKHRSHUDWLRQRIWKHHPSOR\HH¶VDXWRPRELOHZKLOH
XVLQJLWLQGRLQJWKHZRUNKHZDVHPSOR\HGWRGR VRWKDW
WKHUHODWLRQEHWZHHQWKHHPSOR\HUDQGHPSOR\HHLQWKH

-- 2 of 4 --

1R 6XOOLYDQHWDOY6KLPSHWDO
GULYLQJRIWKHDXWRPRELOHZRXOGEHWKHUHODWLRQVKLSRI
SULQFLSDO DQG DJHQW RU RI PDVWHU DQG VHUYDQW DV
GLVWLQJXLVKHG IURP WKH UHODWLRQVKLS RI HPSOR\HU DQG
LQGHSHQGHQWFRQWUDFWRU
%RFKY1</LIH,QV&R1(G 2KLR
LQWHUQDOFLWDWLRQVDQGHPSKDVHVRPLWWHG
%HFDXVH WKH GLVWULFW FRXUW FRUUHFWO\ IRXQG WKDW WKH WKLUG
SURQJRI%RFKZDVFOHDUO\QRWVDWLVILHGZHQHHGQRWUHDFKWKH
LVVXHRIZKHWKHUWKHILUVWWZRSURQJVKDYHEHHQPHW7KH
PDJLVWUDWHMXGJHWKRURXJKO\DQDO\]HGWKHGLUHFWDQGFRQWURO
LVVXHLQKLVVXSSOHPHQWDO5HSRUWDQG5HFRPPHQGDWLRQ
0U6KLPSFKRVHZKLFKGD\DQGZKDWWLPHWRPDNHWKH
WULSDVZHOODVWKHURXWHKHGURYHWRKLVRIILFH$WWKH
WLPHRIWKHFROOLVLRQZLWK0U6XOOLYDQWKH8QLWHG6WDWHV
ZDVH[HUFLVLQJDEVROXWHO\QRFRQVWUDLQWVRQ0U6KLPS¶V
WLPHRUDFWLYLWLHVZLWKUHVSHFWWRKLVHPSOR\PHQW1R
RQHFDOOHG0U6KLPSDWKRPHDQGGLUHFWHGKLPWRJRWR
KLVRIILFHRQ0DUFKWRFROOHFWWKHLWHPVZKLFK
KHZRXOGQHHGWRWDNHWR/RV$QJHOHVWKHQH[WGD\,Q
DGGLWLRQ 0U 6KLPS ZDV DFFRPPRGDWLQJ KLV RZQ
VFKHGXOH ZKHQ KH ZHQW WR KLV RIILFH RQ 0DUFK
6KLPS ZDV QRW UHTXLUHG WR JDWKHU>@ WKH
PDWHULDOVZKHQKHGLG
,Q DUJXLQJ WR WKH FRQWUDU\ 6KLPS UHOLHV XSRQ +LOO Y
*HQHUDO0HWDO+HDW7UHDWLQJ,QF1(G 2KLR&W
$SS ZKLFK KH FLWHV IRU WKH SURSRVLWLRQ WKDW DQ
HPSOR\HHDFWVZLWKLQWKHVFRSHRIKLVHPSOR\PHQWZKHQKH
LV³WUDQVSRUWLQJQHFHVVDU\EXVLQHVVPDWHULDOVUHTXLUHGIRUD
EXVLQHVV WULS´ %XW WKH +LOO FRXUW QHYHU PDGH VXFK D
VWDWHPHQWDQGLWLQIDFWKHOGWKDWWKHHPSOR\HHZDVQRWDFWLQJ
ZLWKLQWKHVFRSHRIKLVHPSOR\PHQWZKHQKHZDVLQYROYHGLQ
DQ DXWRPRELOH DFFLGHQW GXULQJ KLV OXQFK EUHDN 7KH 2KLR
&RXUW RI $SSHDOV VWDWHG WKDW WKH ³>U@HOHYDQW IDFWRUV LQ
GHWHUPLQLQJZKHWKHUWKHLQMXU\KDVDSUR[LPDWHUHODWLRQVKLS
WRWKHZRUNHU¶VHPSOR\PHQWLQFOXGH WKHSUR[LPLW\RIWKH
LQFLGHQWWRWKHZRUNHU¶VSODFHRIHPSOR\PHQW WKHH[WHQW
RIWKHHPSOR\HU¶VFRQWURORUULJKWWRFRQWUROWKDWSODFHDQG
6XOOLYDQHWDOY6KLPSHWDO 1R
WKH HPSOR\HU¶V EHQHILW IURP WKH HPSOR\HH¶V SUHVHQFH
WKHUH´,GDW$OWKRXJKZHDUHSX]]OHGE\WKHIDFWWKDW
+LOOPDNHVQRPHQWLRQRI%RFKRULWVWKUHHSURQJWHVWZH
FRQFOXGHLQDQ\HYHQWWKDW+LOOLVQRWGHWHUPLQDWLYH
7KH DFFLGHQW VFHQH LQ WKH SUHVHQW FDVH ZDV QRW QHDU WKH
$)%DQGWKH$LU)RUFHKDGQRFRQWURORUULJKWWRFRQWUROWKH
ORFDWLRQ RI WKH DFFLGHQW 0RUHRYHU LQ +LOO WKH FRXUW
FRQFOXGHGWKDWDRQHTXDUWHUPLOHGLVWDQFHIDUOHVVWKDQWKH
GLVWDQFHEHWZHHQWKH$)%DQGWKHVFHQHRIWKHDFFLGHQWKHUH
PLOLWDWHG DJDLQVW D ILQGLQJ WKDW WKH HPSOR\HH ZDV DFWLQJ
ZLWKLQ WKH VFRSH RI KLV HPSOR\PHQW 6HH LG QRWLQJ WKDW
SUHYLRXVFRXUWVKDYHIRXQGWKDWRQHTXDUWHUDQGRQHWKLUGRI
D PLOH ZHUH WRR IDU EXW WKDW WZHQW\ WR IRUW\ IHHW ZDV
VXIILFLHQWO\SUR[LPDWH
$QRWKHUNH\FDVHFLWHGE\6KLPSLV)OHWFKHUY1RUWKZHVW
0HFKDQLFDO&RQWUDFWRUV,QF1(G 2KLR&W$SS
+HUHOLHVXSRQ)OHWFKHUWREROVWHUKLVFRQWHQWLRQWKDW
KHZDVDFWLQJZLWKLQWKHVFRSHRIKLVHPSOR\PHQWEHFDXVHKLV
³MRE LQYROYHV ZRUN DW YDULRXV VLWHV´ %XW WKH GLIIHUHQFH
EHWZHHQ 6KLPS¶V MRE DQG WKH MRE DW LVVXH LQ )OHWFKHU LV
PDWHULDO,Q)OHWFKHUWKHHPSOR\HHZDVD³ZRUNLQJIRUHPDQ´
ZKR LQVWDOOHG DQG VXSHUYLVHG WKH LQVWDOODWLRQ RI VSULQNOHU
V\VWHPV ,G DW $OWKRXJK KH KDG DQ RIILFH DW KLV
HPSOR\HU¶VIDFWRU\WKHIRUHPDQIUHTXHQWO\UHFHLYHGWHOHSKRQH
FDOOVIURPKLVHPSOR\HUGLUHFWLQJKLPWRYDULRXVMREVLWHV,G
$FFRUGLQJO\ WKH IRUHPDQ NHSW KLV HPSOR\HU¶V WRROV LQ KLV
SHUVRQDOWUXFNIRUUHDG\DYDLODELOLW\,G2YHUWKHFRXUVHRI
D\HDUKHVSHQWDSSUR[LPDWHO\GD\VDWGLIIHUHQWVLWHV,G
7KHDFFLGHQWLQ)OHWFKHULQIDFWWRRNSODFHDVWKHIRUHPDQ
ZDVKHDGLQJWRDMREVLWHDWWKHGLUHFWLRQRIKLVHPSOR\HU,G
6KLPSRQWKHRWKHUKDQGWUDYHOHGLQFRQQHFWLRQZLWKKLV
MREVXEVWDQWLDOO\OHVVWKDQWKH)OHWFKHUIRUHPDQDQG6KLPS¶V
WUDYHORQWKHGDWHRIWKHDFFLGHQWZDVQRWLQDQ\ZD\VXEMHFW
WRWKHGLUHFWLRQDQGFRQWURORIWKH$LU)RUFH+HUH6KLPS¶V
6XQGD\ GULYH ZDV RQ D GD\ RI WKH ZHHN ZKHQ KH ZDV QRW
UHTXLUHGWRJRWRWKH$)%DWDOO+HKDGWKHRSWLRQRISLFNLQJ
XSWKHGRFXPHQWVDWDQ\WLPHKHFKRVHLQFOXGLQJWKH)ULGD\

-- 3 of 4 --

1R 6XOOLYDQHWDOY6KLPSHWDO
EHIRUHKLVWULSRUWKH0RQGD\PRUQLQJMXVWEHIRUHKHOHIWIRU
/RV$QJHOHV
)XUWKHUPRUH6KLPSQHYHUVRXJKWWREHUHLPEXUVHGIRUWKH
GLVWDQFHKHGURYHEHWZHHQKLVKRPHDQGWKH$)%$OWKRXJK
KHFDOOHGKLVZRUNVXSHUYLVRUVKRUWO\DIWHUWKHDFFLGHQWKHGLG
VRRQO\EHFDXVHWKHDFFLGHQWSUHYHQWHGKLPIURPWUDYHOOLQJWR
/RV $QJHOHV WKH IROORZLQJ GD\ 6KLPS ZDV VLPSO\ QRW
³VXEMHFWWRWKHGLUHFWLRQDQGFRQWURO´RIKLVHPSOR\HUDWWKH
WLPHRIWKHDFFLGHQW7KHGLVWULFWFRXUWWKHUHIRUHGLGQRWHUU
LQILQGLQJWKDW6KLPSZDVQRWDFWLQJZLWKLQWKHVFRSHRIKLV
HPSOR\PHQWZKHQWKHDFFLGHQWWRRNSODFH
,,,&21&/86,21
)RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH$)),50 WKH
MXGJPHQWRIWKHGLVWULFWFRXUW

-- 4 of 4 --