Mason v. Mitchell

Opinion

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$85,&( $ 0$621 ; 3HWLWLRQHU$SSHOODQW    1R Y  !  %(77< 0,7&+(//  5HVSRQGHQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW7ROHGR 1Rn'DYLG$.DW]'LVWULFWsXGJH $UJXHG2FWREHU 'HFLGHGDQG)LOHG)HEUXDU\ %HIRUH%2**60225(DQG&/$<&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('  'DYLG & 6WHEELQV &ROXPEXV 2KLR IRU $SSHOODQW0DWWKHZ&+HOOPDQ$77251(<*(1(5$/j6 2)),&( 2) 2+,2 &$3,7$/ &5,0(6 6(&7,21 &ROXPEXV 2KLR IRU $SSHOOHH  21 %5,()  'DYLG & 6WHEELQV&ROXPEXV2KLR&DURO:ULJKW&ROXPEXV2KLR IRU $SSHOODQW  0DWWKHZ & +HOOPDQ &KDUOHV / :LOOH $77251(<*(1(5$/j62)),&(2)2+,2&$3,7$/ &5,0(66(&7,21&ROXPEXV2KLRIRU$SSHOOHH

  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

0225(sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK OHDVWWREHWKHPRVWHIILFDFLRXVLQDFKLHYLQJGHIHQGDQWjVJRDO &/$< s MRLQHG  %2**6 s SS  GHOLYHUHG D RIFRQWLQXHGOLIH VHSDUDWHGLVVHQWLQJRSLQLRQ 7KHIDFWWKDWDWULDOVWUDWHJ\GLGQRWZRUNGRHVQRWPDNHWKH BBBBBBBBBBBBBBBBB H[ DQWH GHFLVLRQ WR HPSOR\ LW XQGHU FLUFXPVWDQFHV ZKHUH KDUGO\ DQ\ WULDO VWUDWHJLHV ZRXOG VHHP DWWUDFWLYH 23,1,21 FRQVWLWXWLRQDOO\ GHIHFWLYH ODZ\HULQJ  *LYHQ WKH 6XSUHPH BBBBBBBBBBBBBBBBB &RXUWjVDGPRQLVKPHQWVDJDLQVWXVLQJWKHSHQDOW\SKDVHDQG WKH6L[WK$PHQGPHQWDVDOHYHULQGHDWKSHQDOW\FDVHVDQG .$5(1 1(/621 0225( &LUFXLW sXGJH  3HWLWLRQHU WKH VRXQG VWUDWHJLF UHDVRQV IRU WKH RPLVVLRQ RI 0DVRQjV $SSHOODQW0DXULFH$OOHQ0DVRQm0DVRQlZDVFRQYLFWHGE\ EDFNJURXQGE\KLVFRXQVHO,UHVSHFWIXOO\GLVVHQW DQ2KLRMXU\RIDJJUDYDWHGIHORQ\PXUGHUUDSHDQGKDYLQJD ZHDSRQZKLOHXQGHUGLVDELOLW\KHZDVDOVRIRXQGJXLOW\RIWKH GHDWKSHQDOW\ VSHFLILFDWLRQ RI FRPPLWWLQJ PXUGHU LQ WKH FRXUVH RI D UDSH DQG IXUWKHU VSHFLILFDWLRQV WKDW LQYROYHG ILUHDUPVSULRUIHORQ\DQGSULRURIIHQVHRIYLROHQFH0DVRQ ZDV VHQWHQFHG WR GHDWK  0DVRQ QRZ DSSHDOV WKH GLVWULFW FRXUWjVGHQLDORIKLVSHWLWLRQIRUDZULWRIKDEHDVFRUSXVDQG KLV UHTXHVW IRU DQ HYLGHQWLDU\ KHDULQJ  :H KDYH FDUHIXOO\ FRQVLGHUHG DOO RI WKH HLJKW FODLPV WKDW 0DVRQ UDLVHV DQG $)),50WKHGLVWULFWFRXUWjVGHFLVLRQWRGHQ\KDEHDVFRUSXV UHOLHIEXWZLWKRQHLPSRUWDQWH[FHSWLRQ0DVRQFRQWHQGVWKDW KH ZDV GHQLHG WKH HIIHFWLYH DVVLVWDQFH RI FRXQVHO DW WKH VHQWHQFLQJ SKDVH  %HFDXVH WKH UHFRUG DV LW QRZ VWDQGV LV LQVXIILFLHQWIRUXVWRGHWHUPLQHZKHWKHUWKLVFODLPKDVPHULW ZH5(0$1'WKLVFDVHWRWKHGLVWULFWFRXUWIRUDQHYLGHQWLDU\ KHDULQJRQWKLVRQHLVVXH ,%$&.*5281' 2Q )HEUXDU\   5RELQ 'HQQLV m5RELQl WKH QLQHWHHQ\HDUROG ZLIH RI &KULV 'HQQLV m&KULVl GLVDSSHDUHG(DUOLHUWKDWGD\5RELQDQG&KULVKDGVRFLDOL]HG ZLWK 0DVRQ DQG RWKHU IULHQGV DQG &KULV DQG 0DVRQ KDG GLVFXVVHG WUDGLQJ &KULVjV  FDOLEHU &ROW )URQWLHU 6FRXW UHYROYHUIRU0DVRQjVWHOHYLVLRQ7KHQH[WGD\5RELQZDV UHSRUWHG DV PLVVLQJ WR WKH 8QLRQ &RXQW\ 6KHULIIjV 'HSDUWPHQWWKHUHSRUWVWDWHGWKDW0DVRQZDVWKHODVWSHUVRQ VHHQZLWK5RELQ  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

$QWL7HUURULVP DQG (IIHFWLYH 'HDWK 3HQDOW\ $FW RI  2Q)HEUXDU\'HSXW\6KHULIIsDFN/DXWHQVODJHU m$('3$lH[SOLFLWO\OLPLWVWKHFLUFXPVWDQFHVXQGHUZKLFK m/DXWHQVODJHUlUHFHLYHGDUHSRUWDERXWDQDEDQGRQHGFDULQ DQHYLGHQWLDU\KHDULQJPD\EHJUDQWHGLQKDEHDVSURFHHGLQJV D UXUDO DUHD RI 0DULRQ &RXQW\  7ZR GD\V HDUOLHU 6HH  86& † H   ,I 0DVRQ IDLOHG WR GHYHORS D /DXWHQVODJHUKDGGULYHQWKURXJKWKDWDUHDDQGVHHQDEODFN VXIILFLHQW mIDFWXDO EDVLV RI D FODLP LQ 6WDWH FRXUW PDQZDONLQJZKRPKHODWHULGHQWLILHGDV0DVRQ&KHYURQ SURFHHGLQJVlWKLVFRXUWPXVWGLVPLVVWKHFODLPDQGFDQQRW VW\OHVKRHLPSUHVVLRQVVLPLODUWRWKRVHPDGHE\VKRHVWKDW RUGHUDQHYLGHQWLDU\KHDULQJXQOHVVWKHFODLPUHOLHVRQDmQHZ 0DVRQDQG5RELQRZQHGZHUHIRXQGRQWKHRXWVLGHRIWKH UXOH RI FRQVWLWXWLRQDO ODZ PDGH UHWURDFWLYHO\ DSSOLFDEOH WR SDVVHQJHUGRRUDQGRQWKHSDVVHQJHUjVVLGHRIWKHGDVK7\SH FDVHV RQ FROODWHUDO UHYLHZ E\ WKH 6XSUHPH &RXUW WKDW ZDV %EORRG5RELQjVEORRGW\SHZDVIRXQGRQWKHLQVLGHRIWKH SUHYLRXVO\XQDYDLODEOHRUDIDFWXDOSUHGLFDWHWKDWFRXOGQRW SDVVHQJHUGRRU$VHWRINH\VLQFOXGLQJFDUNH\VWKDWILWD KDYHEHHQSUHYLRXVO\GLVFRYHUHGWKURXJKWKHH[HUFLVHRIGXH &KU\VOHURZQHGE\0DVRQjVZLIHZDVRQWKHFDUjVIURQW GLOLJHQFHl   86& † H   1HLWKHU RI WKHVH SDVVHQJHUVHDW FRQGLWLRQVREWDLQLQWKLVFDVH7KLVFRXUWPDNHVFOHDUWKDW 0DVRQUDLVHGWKHVHDUJXPHQWVLQ2KLRVWDWHFRXUWV0DVRQ $IHZKRXUVDIWHUWKLVGLVFRYHU\'HQQLV3RWWVm3RWWVlRI DOVRKDGDQRSSRUWXQLW\WRLQWURGXFHH[WHQVLYHHYLGHQFHRI WKH0DULRQ&RXQW\6KHULIIjV'HSDUWPHQWTXHVWLRQHG0DVRQ ZKLFKKHVRPHZKDWDYDLOHGKLPVHOIUHJDUGLQJZKDWGHIHQVH DERXW5RELQjVGLVDSSHDUDQFH7KLVLQWHUYLHZWRRNSODFHDWWKH FRXQVHOFRXOGKDYHGRQH$Q\IDFWXDOGHILFLHQF\LQ0DVRQjV GHWHFWLYHjVRIILFHRIWKH6KHULIIjV'HSDUWPHQWDQGODVWHGIRU FODLPWKDWSUHYHQWVXVIURPDFFHSWLQJLWPD\QRWEHFXUHGE\ HLJKWHHQPLQXWHV2Q)HEUXDU\IROORZLQJXSRQ D IHGHUDO FRXUW LQ KDEHDV SURFHHGLQJV ZKHQ WKHUH LV QR LQIRUPDWLRQIURPRWKHULQWHUYLHZV3RWWVTXHVWLRQHG0DVRQ HYLGHQFHLQWKHUHFRUGWKDW2KLRFRXUWVSUHYHQWHG0DVRQIURP DJDLQ  7KH VHFRQG LQWHUYLHZ WRRN SODFH LQ D EDVHPHQW PDNLQJ D VXIILFLHQW IDFWXDO UHFRUG  7KLV FRXUWjV FXUUHQW LQWHUURJDWLRQURRPDQGODVWHGZLWKSDXVHVLQWKHTXHVWLRQLQJ UHPHG\RI RUGHULQJDQHYLGHQWLDU\KHDULQJLVLQYDOLGXQGHU IRUIRXUKRXUV0DVRQDSSHDUVWRKDYHXQGHUVWRRGWKDWKHZDV 6HFWLRQH RI$('3$ QRW XQGHU DUUHVW DW WKLV WLPH  $IWHU WKH VHFRQG LQWHUYLHZ 0DVRQjV SDUROH RIILFHU WRRN KLP LQWR FXVWRG\ IRU D SDUROH ,URQLFDOO\LIFRXQVHOjVWUXHDLPLVWRVHHWKDWKLVFOLHQWjVOLIH YLRODWLRQ LVVSDUHGWKHPRVWHIIHFWLYHWDFWLFXQGHUFDVHVVXFKDVWKHRQH WRGD\LVWRRPLWVRPHVWHSVRWKDWRXUFRXUWZLOOODWHUILQG 2Q)HEUXDU\5RELQjVERG\ZDVIRXQGLQVLGHDQ FRXQVHO ZDV QRW mHIIHFWLYHl  &UHDWLYH KDEHDV FRXQVHO FDQ DEDQGRQHG EXLOGLQJ WKDW ZDV ZLWKLQ HLJKWHHQ PLQXWHVj FRQMXUHXSP\ULDGSRVVLEOHVFHQDULRVLQZKLFKDFODLPFDQ ZDONLQJGLVWDQFHIURPZKHUHKHUFDUKDGEHHQIRXQG6KH QRZ EH PDGH WKDW VRPH LQIRUPDWLRQ ZRXOG VXUHO\ KDYH ZDV O\LQJ IDFH GRZQ ZHDULQJ RQO\ D EUD KHU MHDQV DQG FRQYLQFHG D MXU\ WR VSDUH WKH OLIH RI D KHLQRXV PXUGHUHU XQGHUZHDUZHUHSXOOHGGRZQWRKHUDQNOHV5RELQjV7VKLUW ZLWKRXW KDYLQJ WR IDFH WKH DFWXDO FRQVHTXHQFH WKDW VXFK DQGFDUNH\VZHUHXQGHUKHUMDFNHWZKLFKZDVIRXQGHLJKW LQIRUPDWLRQFRXOGHDVLO\KDYHEHHQLQHIIHFWLYHRUZRUVH,Q IHHWIURPKHUERG\ZLWKEXUUVDQGGHEULVRQLW7KHDSSDUHQW IDFWLIWULDOFRXQVHOZHUHWRXVHWKHmNLWFKHQVLQNlDSSURDFK PXUGHUZHDSRQDEORRGVWDLQHGERDUGZLWKSURWUXGLQJQDLOV VHHPLQJO\DGYDQFHGE\UHVSRQGHQWjVFRXQVHODQGLQWURGXFH HYHU\ VFUDS RI LQIRUPDWLRQ QRZ FODLPHG WR EH KHOSIXO LQFOXGLQJ KLV EHFRPLQJ mFHUWLILHG LQ +HDWLQJ DQG $LU  $QRWKHU ZLWQHVV WHVWLILHG WR VHHLQJ D SHUVRQ ZKR ILW 0DVRQjV

&RQGLWLRQLQJl VHH 0DVRQjV %U DW  Q RQH FRXOG GHVFULSWLRQ ZDONLQJ LQ WKH JHQHUDO DUHD DW WKDW WLPH

SUREDEO\ILQGWKDWDSSURDFKmLQHIIHFWLYHlIRUGHSULYLQJWKH  GHIHQGDQWRIWKHDUJXPHQWWKDWKDVSURYHQLQWKLVFLUFXLWDW 7\SH% EORRG ZDV ODWHU IRXQG RQ WKH VLGH RI D WHQQLV VKRH WKDW 0DVRQ ZDV ZHDULQJ RQ )HEUXDU\    0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

ZDVIRXQGWZHQW\IHHWIURPKHUERG\$QRWKHUSLHFHRIZRRG PRUHWKDQDQDVVHUWLRQm7HVWLPRQ\WKDWVLPSO\SXW0DVRQjV IRXQGDWWKHVFHQHKDGVWUDQGVRIKDLUWKDWPDWFKHG5RELQjV FKLOGKRRGLQWRFRQWH[WZLWKRXWPLVLQWHUSUHWLQJLWZRXOGQRW KDLU2Q)HEUXDU\GHWHFWLYHVIRXQGDVPDOOEORRG KDYHEHHQWKHVXEMHFWWRWKHSURVHFXWRUjVUHEXWWDOHYLGHQFH VWDLQHGSLHFHRIPHWDODWWKHFULPHVFHQHZKLFKDILUHDUPV ZKLFKPRVWO\FRQFHUQHG0DVRQjVFKDUDFWHUl6OLSRSDW H[DPLQHUODWHUFRQFOXGHGZDVLGHQWLFDOWRDJULSIUDPHIURP 7KHFRXUWjVFXUVRU\RSLQLRQRI2KLRHYLGHQFHODZQDUURZO\ DFDOLEHU&ROW)URQWLHU6FRXWUHYROYHUDQGZDVFRQVLVWHQW FRQVWUXHVWKHWULDOFRXUWjVH[SOLFLWUXOLQJRQWKLVPDWWHU6HH ZLWKKDYLQJFRPHIURPWKHKDQGOHRIVXFKDUHYROYHU 7UDW7KHWULDOFRXUWLQGLFDWHGWKDWH[WUHPHO\GDPDJLQJ HYLGHQFH FRXOG KDYH EHHQ LQWURGXFHG mKDG WKH 'HIHQVH 2Q )HEUXDU\   SDWKRORJLVW 'U .HLWK 1RUWRQ HOHFWHG WR SURFHHG ZLWK D PRUH H[SDQVLYH PLWLJDWLRQ m1RUWRQlFRQGXFWHGDQDXWRSV\DQGFRQFOXGHGWKDW5RELQ VWUDWHJ\ls$DW0DVRQFRQFHGHVWKDWm>W@KHWULDOFRXUW KDGGLHGDVDUHVXOWRIEOXQWIRUFHWUDXPDFDXVLQJPXOWLSOH UXOHGWKDWVXFKHYLGHQFHlUHIHUULQJWRHYLGHQFHRI0DVRQjV VNXOOIUDFWXUHV'U1RUWRQGHWHUPLQHGWKDWWKHEORRGVWDLQHG SDVWFULPLQDOEHKDYLRUmZRXOGEHDGPLVVLEOHl0DVRQjV%U ERDUGIRXQGDWWKHVFHQHDQGWKHEXWWRIDUHYROYHUFRXOGKDYH DW'HIHQVHFRXQVHOXQGRXEWHGO\FRXOGKDYHSUHVHQWHGWKH FDXVHG 5RELQjV LQMXULHV  'U 1RUWRQ DOVR IRXQG VSHUP LQ HYLGHQFH QRWZLWKVWDQGLQJ WKH WULDO FRXUWjV GHWHUPLQDWLRQ 5RELQjVYDJLQDWKDW'1$H[SHUWVODWHUPDWFKHGWR0DVRQjV LQYLWLQJWKHLQWURGXFWLRQRI0DVRQjVSULRUFULPLQDOUHFRUGE\ '1$'1$PDWHULDOIURP5RELQjVXQGHUZHDUDOVRPDWFKHG WKH SURVHFXWLRQ DQG DSSHDOHG D GLVWULFW FRXUW GHFLVLRQ WR 0DVRQjV'1$7KHH[SHUWVGLGQRWILQG'1$IURPDQ\RQH DGPLW0DVRQjVQHJDWLYHKLVWRU\DVUHEXWWDOHYLGHQFH

,EHOLHYHWKDWFRXQVHOjVGHFLVLRQQRWWRSUHVHQWHYLGHQFHRI JUDQWDFRQWLQXDQFHDQGWKUHDWHQHGWRUHPRYHGHIHQVHFRXQVHO 0DVRQjVFKLOGKRRGZDVUHDVRQDEOHRUWKDWDWWKHYHU\OHDVW ZLWKRXWSD\LQJDQ\IHHV2Q0D\0DVRQSURFHHGHG WKH2KLR6XSUHPH&RXUWjVGHQLDORI0DVRQjVFODLPZDVQRW WR D WKUHHZHHNORQJ MXU\ WULDO KH ZDV IRXQG JXLOW\ RQ DOO DQXQUHDVRQDEOHDSSOLFDWLRQRI6WULFNODQGY:DVKLQJWRQ WKUHHFRXQWV 86DVLWPXVWEHIRUWKLVFRXUWWRRYHUWXUQLWV GHFLVLRQ6HH86&†G 7KHFRXUWDVVXPHVWKDW 2QsXQHWKHWULDOHQWHUHGWKHVHQWHQFLQJSKDVH DQ\GHIHQVHFRXQVHOZKRZRXOGQRWKDYHSUHVHQWHGWKHGHWDLOV 0DVRQjVPLWLJDWLRQFDVHFRQVLVWHGRIWKHWHVWLPRQ\RIVHYHQ RI0DVRQjVSDVWWRWKHMXU\ZRXOGKDYHEHHQHLWKHULQGLIIHUHQW ZLWQHVVHV DQG 0DVRQjV XQVZRUQ VWDWHPHQW  2Q sXQH  WRKLVFOLHQWjVIDWHRULQFRPSHWHQW$VWKHFRXUWVWDWHVm+DG  WKH MXU\ UHFRPPHQGHG WKDW 0DVRQ EH VHQWHQFHG WR WULDO FRXQVHO FRQGXFWHG DQ DGHTXDWH LQYHVWLJDWLRQ WKH MXU\ GHDWK ZKLFK UHFRPPHQGDWLRQ WKH WULDO FRXUW DGRSWHG  2Q ZRXOGKDYHKHDUGVXEVWDQWLDOHYLGHQFHDERXWKRZGUXJXVH $XJXVWWKHWULDOFRXUWKHDUGRUDODUJXPHQWRQDQG DQGYLROHQFHSHUYDGHG0DVRQjVEDFNJURXQGDQGOLIHKLVWRU\l WKHQGHQLHG0DVRQjVPRWLRQIRUDQHZWULDO 6OLSRSDW 0DVRQWKHQILOHGDWLPHO\DSSHDOWRWKH&RXUWRI$SSHDOV 7RPHWKHUHFRUGLVFOHDUWKDWGHIHQVHFRXQVHOQRWRQO\ZDV IRU WKH 7KLUG $SSHOODWH 'LVWULFW DVVHUWLQJ WZHQW\IRXU DZDUHRI0DVRQjVEDFNJURXQGEXWDOVRPDGHDUHDVRQDEOH DVVLJQPHQWVRIHUURU  2Q'HFHPEHUWKH&RXUWRI VWUDWHJLF GHFLVLRQ QRW WR SUHVHQW HYLGHQFH RI 0DVRQjV $SSHDOVDIILUPHGWKHWULDOFRXUWjVMXGJPHQW6WDWHY0DVRQ EDFNJURXQGWRWKHMXU\'HIHQVHFRXQVHOjVGHFLVLRQDGGUHVVHV  :/  DW  2KLR &W $SS 'HF   WKHIXQGDPHQWDOGLOHPPDIRUSHQDOW\SKDVHSUHVHQWDWLRQV7R 0DVRQWKHUHDIWHUILOHGDQRWLFHRIDSSHDODQGDEULHILQWKH VRPHUHFRXQWLQJDFKLOGKRRGILOOHGZLWKGUXJXVHDQGFULPH 2KLR6XSUHPH&RXUW2QsXQHWKH2KLR6XSUHPH ZRXOG DURXVH V\PSDWK\ DQG SURYLGH DQ H[SODQDWLRQ IRU &RXUW DIILUPHG 0DVRQjV FRQYLFWLRQ DQG GHDWK VHQWHQFH RQ RWKHUZLVHKHLQRXVO\YLROHQWFULPHVEXWWRRWKHUVLWZRXOGWHOO GLUHFWDSSHDO6WDWHY0DVRQ1(G2KLR DVWRU\RIZDVWHOLIHORQJPRUDOWXUSLWXGHDQGLQFRUULJLELOLW\  7KH RPLWWHG HYLGHQFH KHUH LV IDU OHVV PLWLJDWLQJ WKDQ WKH UHOHYDQWHYLGHQFHLQ%HOOY&RQHWKDWWKHGHIHQGDQWKDGEHHQ :KLOHKLVGLUHFWDSSHDOZDVSHQGLQJ0DVRQILOHGDVWDWH WUDXPDWL]HGGXULQJKRQRUDEOHPLOLWDU\VHUYLFHWRKLVFRXQWU\ FROODWHUDO DWWDFN LQ WKH &RXUW RI &RPPRQ 3OHDV RI 0DULRQ WKHRPLVVLRQRIZKLFKWKH6XSUHPH&RXUWGHWHUPLQHGQRWWR &RXQW\DVVHUWLQJVHYHQDVVLJQPHQWVRIHUURU6WDWHY0DVRQ EH XQFRQVWLWXWLRQDOO\ LQHIIHFWLYH DVVLVWDQFH  7KH HYLGHQFH :/DW 2KLR&W$SSsXQH2Q RPLWWHGKHUHLVSRWHQWLDOO\DJJUDYDWLQJLQWKHPLQGVRIVRPH 1RYHPEHUWKHFRXUWGHQLHGUHOLHIZLWKRXWKROGLQJ MXURUVDQGLWVSUREDEOHHIIHFWLVDMXGJPHQWFDOOIRUFRXQVHOLQ DQHYLGHQWLDU\KHDULQJ,G0DVRQDSSHDOHGWKHGLVPLVVDORI WKHFRQWH[WRIKLVXQGHUVWDQGLQJRIWKHMXU\jVFRPSRVLWLRQ KLVSRVWFRQYLFWLRQSHWLWLRQWRWKH&RXUWRI$SSHDOVIRUWKH 'HIHQVHFRXQVHOjVFKRLFHWRRPLW0DVRQjVEDFNJURXQGDQG 7KLUG$SSHOODWH'LVWULFWZKLFKDIILUPHGWKHMXGJPHQWRIWKH LW ZDV D FKRLFH LV D TXLQWHVVHQWLDO VWUDWHJLF GHFLVLRQ WKDW &RXUWRI&RPPRQ3OHDVRQsXQH,GDW 0DVRQ FDQQRWIRUPWKHEDVLVRID6WULFNODQGFKDOOHQJH WKHQILOHGDWLPHO\DSSHDOWRWKH2KLR6XSUHPH&RXUWZKLFK GLVPLVVHGWKHDSSHDORQ2FWREHUDVQRWLQYROYLQJ 7KLVFRXUWDOVRIODWO\VXJJHVWVWKDWWKLVSDUWLFXODUHYLGHQFH DQ\VXEVWDQWLDOFRQVWLWXWLRQDOTXHVWLRQ RI0DVRQjVWURXEOHGFKLOGKRRGDQGHDUO\GUXJXVHZRXOGQRW KDYHSHUPLWWHGWKHSURVHFXWLRQWRLQWURGXFHUHEXWWDOHYLGHQFH 2Q sXO\   0DVRQ ILOHG D SHWLWLRQ IRU D ZULW RI UHJDUGLQJ0DVRQjVH[WHQVLYHYLROHQWDQGFRQWHPSRUDQHRXV KDEHDVFRUSXVSXUVXDQWWR86&†UDLVLQJWZHQW\ KLVWRU\RIFULPLQDODFWLYLW\7KHFRXUWjVFODLPKHUHLVQRWKLQJ ILYHFKDOOHQJHVWRKLVFRQYLFWLRQDQGVHQWHQFH2Q0D\ WKHGLVWULFWFRXUWGHQLHG0DVRQjVKDEHDVSHWLWLRQDQG  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

KLV PRWLRQ IRU DQ HYLGHQWLDU\ KHDULQJ RQ YDULRXV FODLPV 9LGHRWDSH'HSRVLWLRQRI'U5REHUW76SDUHDW30 0DVRQ Y 0LWFKHOO  ) 6XSS G   1' 2KLR $FFRUGLQJWR6SDUH0DVRQEHJDQH[WHQVLYHLQYROYHPHQWLQ 7KHGLVWULFWFRXUWVXEVHTXHQWO\JUDQWHGDFHUWLILFDWHRI KLVSDUHQWVjGUXJEXVLQHVVLQmWKHPLGGOHHOHPHQWDU\JUDGHVl DSSHDODELOLW\DVWRDOOFODLPV7KLVWLPHO\DSSHDOIROORZHG DQGVWDUWHGXVLQJGUXJVUHJXODUO\mDERXWWKHVDPHWLPHl,G DW306SDUHDOVRWHVWLILHGWKDW0DVRQVDLGWKDWKHKDG ,,$1$/<6,6 EHHQUHJXODUO\EHDWHQE\KLVIDWKHU,ELG :HUHYLHZGHQRYRWKHOHJDOFRQFOXVLRQVRIDGLVWULFWFRXUW 6SDUH IXUWKHU WHVWLILHG DV WR VHYHUDO mH[KLELWV RIIHUHG IRU LQDKDEHDVSURFHHGLQJ0LW]HOY7DWH)G PLWLJDWLRQSXUSRVHVlWKDWKHKDGUHYLHZHGLQWKHFRXUVHRIKLV WK&LU%HFDXVH0DVRQILOHGKLVKDEHDVSHWLWLRQRQ WUHDWPHQWRI0DVRQ7KHVHH[KLELWVZHUHLQWKHUHFRUGRIWKH sXO\   DIWHU WKH $QWLWHUURULVP DQG (IIHFWLYH 'HDWK GHSRVLWLRQDQGLQFOXGHGVHYHUDOUHSRUWVIURPVRFLDOVHUYLFHV 3HQDOW\$FWRIm$('3$lEHFDPHHIIHFWLYHWKLVFDVH DJHQFLHV WKDW LQFOXGHG H[WHQVLYH UHFRUGV RI GRPHVWLF DQG LVJRYHUQHGE\$('3$,G8QGHU$('3$jVSURYLVLRQVZH FKLOGDEXVHLQ0DVRQjVKRPHDQGWKHGUXJVHHNLQJDFWLYLWLHV PD\QRWJUDQWDZULWRIKDEHDVFRUSXVIRUDQ\FODLPWKDWZDV RI0DVRQjVSDUHQWV7KHGHIHQGDQWZDVSUHVHQWGXULQJWKH DGMXGLFDWHG RQ WKH PHULWV LQ VWDWH FRXUW XQOHVV WKH GHSRVLWLRQLGDW30DQGWKXVZRXOGKDYHEHHQDEOHWR DGMXGLFDWLRQ DGYLVHKLVDWWRUQH\RIDQ\DGGLWLRQDOPDWHULDOWKDWPLJKWKDYH EHHQUHOHYDQW,QDQ\HYHQWWKHGHSRVLWLRQVKRZVWKDW'U  UHVXOWHG LQ D GHFLVLRQ WKDW ZDV FRQWUDU\ WR RU 6SDUHZDVDZDUHRIDQGIXOO\UHODWHGWRFRXQVHOWKHJLVWRI LQYROYHG DQ XQUHDVRQDEOH DSSOLFDWLRQ RI FOHDUO\ WKHPDWHULDORQ0DVRQjVEDFNJURXQGDVWRZKLFKWKHFRXUW HVWDEOLVKHG )HGHUDO ODZ DV GHWHUPLQHG E\ WKH QRZDSSHDUVWREHXQFHUWDLQ 6XSUHPH&RXUWRIWKH8QLWHG6WDWHVRU ,Q VKRUW 6SDUHjV GHSRVLWLRQ H[SOLFLWO\ FRYHUV DOO RI WKH  UHVXOWHG LQ D GHFLVLRQ WKDW ZDV EDVHG RQ DQ LQIRUPDWLRQ WR ZKLFK GHIHQVH FRXQVHO ZDV DOOHJHGO\ QRW XQUHDVRQDEOHGHWHUPLQDWLRQRIWKHIDFWVLQOLJKWRI H[SRVHGGXHWRVKRGG\LQYHVWLJDWLRQLQWRPLWLJDWLQJHYLGHQFH WKHHYLGHQFHSUHVHQWHGLQWKH6WDWHFRXUWSURFHHGLQJ $FFRUGLQJO\ WKLV FDVH VHHPV LQGLVWLQJXLVKDEOH IURP SULRU FDVHV LQ ZKLFK ZH KDYH GHQLHG FODLPV RI LQHIIHFWLYH 86&†G ,QDGGLWLRQWKHILQGLQJVRIIDFW DVVLVWDQFHEDVHGRQDOOHJHGIDLOXUHWRLQYHVWLJDWHPLWLJDWLQJ PDGHE\DVWDWHFRXUWDUHSUHVXPHGWREHFRUUHFWDQGFDQEH HYLGHQFH  6SHFLILFDOO\ WKH GHIHQGDQW KDV LGHQWLILHG QR FRQWUDYHQHGRQO\LIWKHKDEHDVSHWLWLRQHUFDQVKRZE\FOHDU HYLGHQFHRIZKLFKGHIHQVHFRXQVHOZDVQRWDOUHDG\DZDUHDW DQGFRQYLQFLQJHYLGHQFHWKDWWKHVWDWHFRXUWjVIDFWXDOILQGLQJV WKH WLPH RI WKH SHQDOW\ SKDVH SURFHHGLQJV  6HH %XHOO Y ZHUH HUURQHRXV  ,G † H   7KLV SUHVXPSWLRQ RI 0LWFKHOO)GWK&LU FRUUHFWQHVVDOVRDSSOLHVWRWKHIDFWXDOILQGLQJVPDGHE\DVWDWH DSSHOODWH FRXUW EDVHG RQ WKH VWDWH WULDO UHFRUG  6XPQHU Y 7KH UHOHYDQW TXHVWLRQ LV WKH RQH WKDW WKLV FRXUW GHFOLQHV 0DWD86 WRGD\WRDQVZHUZKHWKHUGHIHQVHFRXQVHOjVGHFLVLRQQRWWR SUHVHQW FHUWDLQ HYLGHQFH RI WKH GUXJUHODWHG DFWLYLWLHV RI $('3$SURYLGHVWKHIROORZLQJVWDQGDUGIRUGHWHUPLQLQJ 0DVRQjVSDUHQWVRI0DVRQjVORQJKLVWRU\RIGUXJXVHDQGRI ZKHWKHUDSHWLWLRQHULVHQWLWOHGWRDQHYLGHQWLDU\KHDULQJ WKH SK\VLFDO DEXVH WR ZKLFK 0DVRQ ZDV VXEMHFWHG ZDV D UHDVRQDEOHVWUDWHJLFFKRLFHRIFRXQVHORUZDVZLWKLQWKHZLGH H  ,IWKHDSSOLFDQWKDVIDLOHGWRGHYHORSWKHIDFWXDO UDQJH RI GHFLVLRQV WKDW FRQVWLWXWH FRQVWLWXWLRQDOO\ HIIHFWLYH EDVLV RI D FODLP LQ 6WDWH FRXUW SURFHHGLQJV WKH UHSUHVHQWDWLRQ  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

DGHTXDF\ RI 0DVRQjV UHSUHVHQWDWLRQ  ,QVWHDG WKH FRXUW FRXUWVKDOOQRWKROGDQHYLGHQWLDU\KHDULQJRQWKH FRQWHQGVWKDWGHIHQVHFRXQVHOGLGQRWVXIILFLHQWO\LQYHVWLJDWH FODLPXQOHVVWKHDSSOLFDQWVKRZVWKDWn 0DVRQjVmKLVWRU\FKDUDFWHURUEDFNJURXQGl$FFRUGLQJWR WKH FRXUW DQ\ LQYHVWLJDWLRQ ZRXOG KDYH UHYHDOHG 0DVRQjV $ WKHFODLPUHOLHVRQn WUDXPDWLFFKLOGKRRGKLVOLYLQJZLWKSDUHQWVZKRZHUHGUXJ GHDOHUVDQGXVHUVWKHUHJXODUEHDWLQJVWKDWKHUHFHLYHGIURP L D QHZ UXOH RI FRQVWLWXWLRQDO ODZ KLVIDWKHUDQGWKHUHVXOWLQJGUXJDGGLFWLRQWKDW0DVRQKLPVHOI PDGH UHWURDFWLYH WR FDVHV RQ GHYHORSHGIURPWKHDJHRIHOHYHQ7KHFRXUWVXJJHVWVWKDW FROODWHUDO UHYLHZ E\ WKH 6XSUHPH FRXQVHOjVIDLOXUHWRSUHVHQWWKLVWDOHRIZRHWRWKHMXU\ZDVQRW &RXUW WKDW ZDV SUHYLRXVO\ WKHUHVXOWRIDVWUDWHJLFFKRLFHLQWKHKHDWRIOLWLJDWLRQEXWD XQDYDLODEOHRU ODFNRINQRZOHGJHUHJDUGLQJ0DVRQjVEDFNJURXQG7KHFRXUW DUJXHV WKDW m>K@DG WULDO FRXQVHO FRQGXFWHG DQ DGHTXDWH LL D IDFWXDO SUHGLFDWH WKDW FRXOG QRW LQYHVWLJDWLRQWKHMXU\ZRXOGKDYHKHDUGVXEVWDQWLDOHYLGHQFH KDYH EHHQ SUHYLRXVO\ GLVFRYHUHG DERXW KRZ GUXJ XVH DQG YLROHQFH SHUYDGHG 0DVRQjV WKURXJK WKH H[HUFLVH RI GXH EDFNJURXQG DQG OLIH KLVWRU\l  6OLS RS DW   HPSKDVLV GLOLJHQFHDQG DGGHG  ,QGHHG WKH FRXUW QRWHV 0DVRQjV SRVWFRQYLFWLRQ WHVWLPRQ\ WKDW KH GLG QRW UHFDOO GHIHQVH FRXQVHO HYHU % WKH IDFWV XQGHUO\LQJ WKH FODLP ZRXOG EH LQWHUYLHZLQJKLPUHJDUGLQJKLVEDFNJURXQGPXFKOHVVWKDWRI VXIILFLHQWWRHVWDEOLVKE\FOHDUDQGFRQYLQFLQJ DQ\RIKLVIDPLO\PHPEHUV6OLSRSDW HYLGHQFHWKDWEXWIRUFRQVWLWXWLRQDOHUURUQR UHDVRQDEOHIDFWILQGHUZRXOGKDYHIRXQGWKH 7KH H[LVWLQJ UHFRUG LQ WKLV FDVH FRQWUDGLFWV WKH FRXUWjV DSSOLFDQWJXLOW\RIWKHXQGHUO\LQJRIIHQVH ILQGLQJ WKDW GHIHQVH FRXQVHO KDG QR NQRZOHGJH RI WKHVH SDUWLFXODUO\WUDJLFIHDWXUHVRI0DVRQjVEDFNJURXQG$VWKH 86&†H  FRXUW LQGLFDWHG GHIHQVH FRXQVHO ZDV SURYLGHG ZLWK WKH ,Q:LOOLDPVY7D\ORU86WKH6XSUHPH VHUYLFHVRI'U5REHUW76SDUHDSV\FKRORJLVWZKRH[DPLQHG &RXUW LQWHUSUHWHG † G  DV UHTXLULQJ D GLVWLQFWLRQ WKH GHIHQGDQW WR GHWHUPLQH DPRQJ RWKHU WKLQJV KLV IXWXUH EHWZHHQ GHFLVLRQV WKDW DUH mFRQWUDU\ WRl DQG WKRVH WKDW GDQJHURXVQHVV6SDUHDOVRWRRNDQUHODWLYHO\H[WHQVLYHRUDO LQYROYHDQmXQUHDVRQDEOHDSSOLFDWLRQRIlFOHDUO\HVWDEOLVKHG KLVWRU\ IURP 0DVRQ  8QGHU GHSRVLWLRQ TXHVWLRQLQJ E\ 6XSUHPH&RXUWSUHFHGHQW,GDW$VWDWHFRXUWGHFLVLRQ GHIHQVHFRXQVHO6SDUHUHFRXQWHGHVVHQWLDOO\DOORIWKHIDFWV LVmFRQWUDU\WRl6XSUHPH&RXUWSUHFHGHQWmLIWKHVWDWHFRXUW WKDWDFFRUGLQJWRWKLVFRXUWZHUHQRWGLVFRYHUHGE\GHIHQVH DUULYHV DW D FRQFOXVLRQ RSSRVLWH WR WKDW UHDFKHG E\ >WKH FRXQVHO6SDUHWHVWLILHGWKDW0DVRQWROGKLPWKDWKLVIDPLO\ 6XSUHPH@&RXUWRQDTXHVWLRQRIODZlRUmLIWKHVWDWHFRXUW OLIHZDVmUDWKHUXQXVXDOlZLWKKLVSDUHQWVLQYROYHGLQmGUXJ FRQIURQWVIDFWVWKDWDUHPDWHULDOO\LQGLVWLQJXLVKDEOHIURPD UHODWHG DFWLYLWLHV DV ORQJ DV KH FRXOG UHPHPEHUl  6HH UHOHYDQW6XSUHPH&RXUWSUHFHGHQWlDQGDUULYHVDWDGLIIHUHQW UHVXOW  ,G  $ VWDWH FRXUW GHFLVLRQ LV DOVR mFRQWUDU\ WRl 6XSUHPH&RXUWSUHFHGHQWLIWKHVWDWHFRXUWmDSSOLHVDUXOHWKDW  FRQWUDGLFWVWKHJRYHUQLQJODZVHWIRUWKlLQWKDWSUHFHGHQW,G 7KH GHSRVLWLRQ ZDV FRQGXFWHG GXULQJ WKH JXLOW SKDVH RI WKH WULDO LQ DQWLFLSDWLRQ RI 'U 6SDUHjV SRWHQWLDO DEVHQFH IRU D SRVVLEOH SHQDOW\ SKDVH 7KH DFWXDO YLGHR WDSH RI WKH GHSRVLWLRQ RI 'U 6SDUH LV LQ RXU UHFRUG DV $ VWDWH FRXUW GHFLVLRQ LQYROYHV DQ mXQUHDVRQDEOH UHFRUG HQWU\  LQ WKH GLVWULFW FRXUW UHIHUHQFHG DV $SSHQGL[ 9RO  WR WKH DSSOLFDWLRQRIlFOHDUO\HVWDEOLVKHG6XSUHPH&RXUWSUHFHGHQW UHWXUQ RI ZULW E\ WKH UHVSRQGHQW UHFRUG HQWU\  DSSHDUV WR EH WKDW DVVLJQHG LQ WKH VWDWH WULDO FRXUW 7KH YROXPH QXPEHU mLIWKHVWDWHFRXUWLGHQWLILHVWKHFRUUHFWJRYHUQLQJOHJDOUXOH  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

IURP>WKH6XSUHPH@&RXUWjVFDVHVEXWXQUHDVRQDEO\DSSOLHVLW WKDW&RQHjVWULDODWWRUQH\SUHVHQWHGQRPLWLJDWLQJHYLGHQFHDW WRWKHIDFWVRIWKHSDUWLFXODUFDVHl,GDW DOODQGPDGHQRILQDODUJXPHQWKHGLGQRWHYHQDVNWKHMXU\ :H PD\ QRW RYHUWXUQ D VWDWH GHFLVLRQ VLPSO\ EHFDXVH ZH WRVSDUHKLVFOLHQWjVOLIHl&RQHY%HOO)G FRQFOXGH WKDW WKH VWDWH FRXUW LQFRUUHFWO\ DSSOLHG 6XSUHPH WK&LU5\DQs,Q&RQHGHIHQVHFRXQVHOIDLOHGWR &RXUW SUHFHGHQW  7KH VWDWH FRXUW PXVW KDYH DSSOLHG WKH FDOO D VLQJOH ZLWQHVV WR SUHVHQW PLWLJDWRU\ HYLGHQFH DQG UHOHYDQW 6XSUHPH &RXUW SUHFHGHQW LQ DQ REMHFWLYHO\ RIIHUHGQRFORVLQJVWDWHPHQWDOWKRXJKGHIHQVHFRXQVHOGLG XQUHDVRQDEOHPDQQHU,GDW EULHIO\FURVVH[DPLQHVRPHRIWKHVWDWHjVZLWQHVVHV&RQH 6&WDW1HYHUWKHOHVVWKH6XSUHPH&RXUWZLWK ,QUHYLHZLQJDVWDWHFRXUWGHFLVLRQXQGHU$('3$ZHPXVW RQO\RQHGLVVHQWKHOGWKDWGHIHQVHFRXQVHOjVUHSUHVHQWDWLRQ ORRNRQO\WRWKH6XSUHPH&RXUWKROGLQJVWKDWH[LVWHGDWWKH GXULQJ WKH SHQDOW\ SKDVH ZDV QRW XQFRQVWLWXWLRQDOO\ WLPHRIWKHVWDWHFRXUWjVGHFLVLRQ,GDW:HPD\QRW LQDGHTXDWH XQGHU LWV VWDQGDUG LQ6WULFNODQG Y :DVKLQJWRQ EDVHRXUGHFLVLRQRQ6XSUHPH&RXUWGLFWDRUWKHGHFLVLRQVRI 86 WKHFRXUWVRIDSSHDOV6HHLG0LW]HO)GDW 'HWHUPLQLQJWKHEHVWWDFWLFIRUDSHQDOW\SKDVHSUHVHQWDWLRQ $'HQLDORI([SHUW$VVLVWDQFH LV H[WUHPHO\ GLIILFXOW LQ WKH ZDNH RI D MXU\jV ILQGLQJ WKH GHIHQGDQW JXLOW\ RI D KRUULEO\ EUXWDO DFW DFFRUGLQJ WR WKH 7ULDO3KDVH &RXUW&RQH6&WDW7KLVFRXUWjVGHWHUPLQDWLRQ WKDWDGHIHQVHFRXQVHOjVIDLOXUHWRSUHVHQWDQ\DIILUPDWLYHFDVH 0DVRQ ILUVW DUJXHV WKDW WKH 2KLR 6XSUHPH &RXUW IRU PLWLJDWLRQ LQ WKH SHQDOW\ SKDVH ZDV XQFRQVWLWXWLRQDO XQUHDVRQDEO\ DSSOLHG FOHDUO\ HVWDEOLVKHG 6XSUHPH &RXUW LQHIIHFWLYH UHSUHVHQWDWLRQ IDLOHG WR LQGXOJH WKH mµVWURQJ SUHFHGHQW LQ m>S@UHPLVLQJ >DQ LQGLJHQW GHIHQGDQW@jV SUHVXPSWLRQj WKDW FRXQVHOjV FRQGXFW IDOOV ZLWKLQ WKH ZLGH FRQVWLWXWLRQDO ULJKW WR H[SHUW DQG LQYHVWLJDWLYH DVVLVWDQFH UDQJHRIUHDVRQDEOHSURIHVVLRQDODVVLVWDQFHEHFDXVHLWLVDOO VROHO\ RQ WKH GLVFUHWLRQ RI WKH WULDO FRXUW ZLWKRXW IXUWKHU WRR HDV\ WR FRQFOXGH WKDW WKH SDUWLFXODU DFW RU RPLVVLRQ RI UHYLHZl  3HWLWLRQHUjV %U DW   ,QGLJHQW SULVRQHUV DUH FRXQVHOZDVXQUHDVRQDEOHLQWKHKDUVKOLJKWRIKLQGVLJKWl,G FRQVWLWXWLRQDOO\ HQWLWOHG WR mWKH EDVLF WRROV RI DQ DGHTXDWH DW6HHDOVR6WULFNODQG86DW GHIHQVHRUDSSHDOZKHQWKRVHWRROVDUHDYDLODEOHIRUDSULFH WRRWKHUSULVRQHUVl%ULWWY1RUWK&DUROLQD86 ,QWKLVFDVHGHIHQVHFRXQVHOSUHVHQWHGDVLJQLILFDQWO\PRUH   FLWLQJ*ULIILQ Y ,OOLQRLV  86    UREXVW PLWLJDWRU\ FDVH WKDQ WKH FRXQVHO LQ &RQH  'HIHQVH %RWK%ULWWDQG*ULIILQLQYROYHGUHTXHVWVIRUIUHHWUDQVFULSWVRI FRXQVHOFDOOHGWZRPHPEHUVRIWKHVKHULIIjVGHSDUWPHQWWR WULDOSURFHHGLQJV6HH%ULWW86DW*ULIILQ86 FRPPHQWRQ0DVRQjVJRRGEHKDYLRUDVDSULVRQHU&RXQVHO DW   7KH 6XSUHPH &RXUW KDV DOVR KHOG WKDW SV\FKLDWULF DOVRFDOOHG0DVRQjVPRWKHUKLVWZREURWKHUVKLVFRXVLQDQG DVVLVWDQFH LV D EDVLF WRRO RI DQ DGHTXDWH GHIHQVH LQ WZR ILQDOO\KLVZLIHWRWHVWLI\UHJDUGLQJKRZPHDQLQJIXO0DVRQ JHQHUDOFLUFXPVWDQFHVmZKHQD GHIHQGDQWKDVPDGHD KDG EHHQ LQ WKHLU OLYHV DQG WR DVN WKH MXU\ WR VSDUH WKH SUHOLPLQDU\VKRZLQJWKDWKLVVDQLW\DWWKHWLPHRIWKHRIIHQVH GHIHQGDQWjVOLIH)LQDOO\0DVRQKLPVHOIWHVWLILHGDERXWWKH LV OLNHO\ WR EH D VLJQLILFDQW IDFWRU DW WULDOl DQG  mLQ WKH DUWZRUN DQG SRHWU\ KH KDG FRPSRVHG LQ SULVRQ  8QOLNH FRQWH[W RI D FDSLWDO VHQWHQFLQJ SURFHHGLQJ ZKHQ WKH 6WDWH GHIHQVH FRXQVHO LQ &RQH 0DVRQjV FRXQVHO GHOLYHUHG DQ SUHVHQWV SV\FKLDWULF HYLGHQFH RI WKH GHIHQGDQWjV IXWXUH H[WHQVLYHFORVLQJVWDWHPHQW GDQJHURXVQHVVl  $NH Y 2NODKRPD  86    2QDSSHDO0DVRQFODLPVWKDW$NHUHTXLUHG2KLRWR 'HIHQVHFRXQVHOjVSUHVHQWDWLRQLQWKHSHQDOW\SKDVHLVQRW SURYLGH KLP ZLWK WKH IROORZLQJ W\SHV RI H[SHUW DVVLVWDQFH WKH SULQFLSDO WKUXVW RI WKH FRXUWjV FRQFHUQ UHJDUGLQJ WKH DVRLODQGGHEULVH[SHUWWRH[DPLQHWKHVRLOIRXQGRQWKH  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

BBBBBBBBBBBBBBB FORWKLQJDQGVKRHVRI5RELQ0DVRQDQG&KULVDVKRH SULQW H[SHUW WR LGHQWLI\ DQG FRPSDUH WKH SULQWV IRXQG LQ ',66(17 5RELQjVFDUZLWKWKRVHPDGHE\WKHVKRHVRI0DVRQ5RELQ BBBBBBBBBBBBBBB DQG&KULVDPLWLJDWLRQLQYHVWLJDWLRQH[SHUWWRH[DPLQH 0DVRQjVEDFNJURXQGIRUSRWHQWLDOPLWLJDWLRQHYLGHQFHDQG %2**6&LUFXLWsXGJHGLVVHQWLQJLQSDUW,ODUJHO\DJUHH mDQLQGHSHQGHQWFRPSHWHQWIRUHQVLFPHQWDOKHDOWKH[SHUWl ZLWKWKHFRXUWjVDQDO\VLVRI0DVRQjVDUJXPHQWVLQWKLVFDVH WRKHOSGHIHQVHFRXQVHODWWKHVHQWHQFLQJSKDVH3HWLWLRQHUjV ,FDQQRWDJUHHKRZHYHUZLWKWKHFRXUWjVGHFLVLRQWRUHPDQG %UDW WKLVDFWLRQWRWKHGLVWULFWFRXUWIRUDQHYLGHQWLDU\KHDULQJRQ WKH DGHTXDF\ RI 0DVRQjV FRXQVHOjV LQYHVWLJDWLRQ DQG ,QWKLVFDVHWKH2KLR6XSUHPH&RXUW XQGHUVWRRG$NHWR SUHVHQWDWLRQRIHYLGHQFHLQPLWLJDWLRQGXULQJWKHVHQWHQFLQJ mUHTXLUH WKDW D FULPLQDO GHIHQGDQW EH SURYLGHG SKDVHRI0DVRQjVWULDO7KHFRXUWjVDFWLRQERWKLJQRUHVWKH >QRQSV\FKLDWULF@H[SHUWDVVLVWDQFHZKHQQHFHVVDU\WRSUHVHQW FOHDU6XSUHPH&RXUWSUHFHGHQWHVWDEOLVKLQJWKHVWDQGDUGVIRU DQDGHTXDWHGHIHQVHl0DVRQ1(GDW7KLVLV HYDOXDWLQJ WKH FRQVWLWXWLRQDOO\ UHTXLUHG HIIHFWLYHQHVV RI FRQVLVWHQWZLWKWKHSULQFLSOHVXPPDUL]HGLQ$NHWKDW GHIHQVHFRXQVHODQGFRQWUDYHQHVWKHVWDWXWRU\OLPLWDWLRQVRQ RXU UHYLHZ RI VWDWH FRQYLFWLRQV WKURXJK KDEHDV FRUSXV 0HDQLQJIXO DFFHVV WR MXVWLFH KDV EHHQ WKH FRQVLVWHQW SURFHHGLQJV  $FFRUGLQJO\ , UHVSHFWIXOO\ GLVVHQW IURP WKH WKHPHRIWKHVHFDVHV:HUHFRJQL]HGORQJDJRWKDWPHUH FRXUWjV GHFLVLRQ WR UHYHUVH WKH GLVWULFW FRXUWjV GHQLDO RI DFFHVVWRWKHFRXUWKRXVHGRRUVGRHVQRWE\LWVHOIDVVXUH 0DVRQj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*UHHUY0LWFKHOO)GWK FRXQWHUSDUW PLJKW EX\ LW KDV RIWHQ UHDIILUPHG WKDW &LU&RQHY%HOO)GWK&LUUHYjG IXQGDPHQWDOIDLUQHVVHQWLWOHVLQGLJHQWGHIHQGDQWVWRmDQ 6&W6NDJJVY3DUNHU)GWK DGHTXDWHRSSRUWXQLW\WRSUHVHQWWKHLUFODLPVIDLUO\ZLWKLQ &LU5LFNPDQY%HOO)GWK&LU WKHDGYHUVDU\V\VWHPl7RLPSOHPHQWWKLVSULQFLSOHZH $XVWLQY%HOO)GWK&LU*OHQQY7DWH KDYH IRFXVHG RQ LGHQWLI\LQJ WKH mEDVLF WRROV RI DQ  )G  WK &LU   7KH 6XSUHPH &RXUW LQ WKH DGHTXDWHGHIHQVHRUDSSHDOlDQGZHKDYHUHTXLUHGWKDW FRXUVHRIUHYHUVLQJRQHVXFKGHFLVLRQRIWKLVFRXUWKDVPDGH VXFKWRROVEHSURYLGHGWRWKRVHGHIHQGDQWVZKRFDQQRW DEXQGDQWO\FOHDUWKHH[WUHPHO\KLJKVWDQGDUGWKDWPXVWEHPHW DIIRUGWRSD\IRUWKHP IRU FRXQVHOjV UHSUHVHQWDWLRQ LQ WKH SHQDOW\ SKDVH WR EH FRQVLGHUHGFRQVWLWXWLRQDOO\LQDGHTXDWH7KH6XSUHPH&RXUW $NH86DWLQWHUQDOFLWDWLRQVRPLWWHG7KH2KLR LQ%HOOY&RQH6&WUHYHUVHGRQHLWHUDWLRQ 6XSUHPH&RXUWWKHQKHOGWKDWQRQSV\FKLDWULFH[SHUWDVVLVWDQFH RIWKLVFRXUWjVILQGLQJRILQDGHTXDF\RIFRXQVHOGXULQJWKH VKRXOGEHSURYLGHGmRQO\ZKHUHWKHWULDOFRXUWILQGVLQWKH SHQDOW\SKDVH,QRXU&RQHGHFLVLRQWKLVFRXUWREVHUYHGWKDW H[HUFLVHRIDVRXQGGLVFUHWLRQWKDWWKHGHIHQGDQWKDVPDGHD FRXQVHOjV SUHVHQWDWLRQ ZDV QRW RQO\ SRRU EXW D FRPSOHWH SDUWLFXODUL]HGVKRZLQJRIDUHDVRQDEOHSUREDELOLW\WKDWWKH DEGLFDWLRQRIWKHGHIHQVHDWWRUQH\jVUROHm,WLVLQGLVSXWDEOH UHTXHVWHGH[SHUWZRXOGDLGLQKLVGHIHQVHDQGWKDWGHQLDO  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

RIWKHUHTXHVWHGH[SHUWDVVLVWDQFHZRXOGUHVXOWLQDQXQIDLU WULDO FRXUW WKHQ JDYH WKH $OOHQ FKDUJH  $OWKRXJK WKH WULDOl,GDW IRUHSHUVRQLQLWLDOO\GLVPLVVHGWKHSRVVLELOLW\RIDXQDQLPRXV DJUHHPHQW ZH QRWH WKDW KLV VXEVHTXHQW GLVFXVVLRQ RI WKH :HDUHQRWSHUVXDGHGWKDWWKH2KLR6XSUHPH&RXUWDSSOLHG VXSSOHPHQWDOLQVWUXFWLRQZLWKWKHMXU\ZDVIROORZHGE\DOPRVW $NH LQ DQ REMHFWLYHO\ XQUHDVRQDEOH PDQQHU  ,Q $NH WKH IRXUPRUHKRXUVRIMXU\GHOLEHUDWLRQLQVWHDGRIKLVUHWXUQWR 6XSUHPH&RXUWZHLJKHGWKUHHIDFWRUVLQGHWHUPLQLQJZKHWKHU WKHWULDOFRXUWZLWKDFRQILUPDWLRQRIWKHMXU\jVLQDELOLW\WR DFFHVV WR FRPSHWHQW SV\FKLDWULF DVVLVWDQFH ZDV UHTXLUHG UHDFKDXQDQLPRXVGHFLVLRQ7KLVIDFWSHUVXDGHVXVWKDWWKH mWKHSULYDWHLQWHUHVWWKDWZLOOEHDIIHFWHGE\WKHDFWLRQRI WULDOFRXUWGLGQRWHUULQJLYLQJDQ$OOHQFKDUJH WKH6WDWHlmWKHJRYHUQPHQWDOLQWHUHVWWKDWZLOOEHDIIHFWHG LI WKH VDIHJXDUG LV WR EH SURYLGHGl DQG  mWKH SUREDEOH :HDOVREHOLHYHWKDWWKHMXU\ZDVQRWFRHUFHGLQWRUHWXUQLQJ YDOXHRIWKHDGGLWLRQDORUVXEVWLWXWHSURFHGXUDOVDIHJXDUGVWKDW D XQDQLPRXV GHDWK VHQWHQFH  )LUVW WKH WULDO FRXUWjV DUHVRXJKWDQGWKHULVNRIDQ HUURQHRXVGHSULYDWLRQRIWKH LQVWUXFWLRQVGLGQRWUHTXLUHWKHMXU\WRUHMHFWWKHGHDWKSHQDOW\ DIIHFWHGLQWHUHVWLIWKRVHVDIHJXDUGVDUHQRWSURYLGHGl$NH XQDQLPRXVO\EHIRUHFRQVLGHULQJWKHOLIHVHQWHQFHV,QGHHG 86DW,QWKLVFDVHWKH2KLR6XSUHPH&RXUWVLPSO\ WKH FRQWHQW RI WKH MXU\jV QRWH n ZKLFK LQGLFDWHG ODFN RI VWDWHGWKDWWULDOFRXUWVKDYHGLVFUHWLRQLQHYDOXDWLQJWKHWKLUG XQDQLPLW\ mRQ DQ\ RQH RI WKH VHQWHQFLQJ RSWLRQVl s$ DW IDFWRU:HGRQRWEHOLHYHWKDWWKLVDSSOLFDWLRQRI$NHZDV n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jVVXSSOHPHQWDOLQVWUXFWLRQZDVQRWLPSHUPLVVLEO\ WULDODQLQGLJHQWGHIHQGDQWRQWULDOIRUKLVOLIHKDVWKHULJKWWR FRHUFLYH:HWKHUHIRUHGHQ\KDEHDVUHOLHIZLWKUHVSHFWWRWKLV SV\FKLDWULFRUSV\FKRORJLFDODVVLVWDQFHGXULQJWKHVHQWHQFLQJ FODLP SKDVHmZKHQWKH6WDWHSUHVHQWVSV\FKLDWULFHYLGHQFHRIWKH GHIHQGDQWjV IXWXUH GDQJHURXVQHVVl  $NH  86 DW  ,,,&21&/86,21 6NDJJVY3DUNHU)GWK&LUFHUW GHQLHG  6 &W    7KH 6WDWH RI 2KLR GLG QRW )RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUWjV SUHVHQWVXFKHYLGHQFHLQWKLVFDVH7KHUHIRUH0DVRQGLGQRW GHQLDORI0DVRQj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mDFFHVVWRDFRPSHWHQWSV\FKLDWULVW LQSUHSDUDWLRQRIKLVGHIHQVHl6NDJJV)GDWQ LQWHUQDOTXRWDWLRQPDUNVRPLWWHGDQGQRWZKHWKHUWKHH[SHUW ZDVLQIDFWFRPSHWHQW,GDW:HGLGQRWHLQ6NDJJVWKDW WKH IDLOXUH RI GHIHQVH FRXQVHO WR HQJDJH D FRPSHWHQW  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

0DVRQ1(GDW7KH2KLR6XSUHPH&RXUWWKHQ SV\FKLDWULVW ZRXOG EH UHOHYDQW LQ GHWHUPLQLQJ ZKHWKHU D UHLWHUDWHG LWV DSSURYDO RI mXVLQJ VXSSOHPHQWDO LQVWUXFWLRQV GHIHQGDQWUHFHLYHGLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO,GDW XUJLQJ MXURUV WR FRQWLQXH GHOLEHUDWLRQV WR WU\ WR UHDFK D Q:LWKUHVSHFWWR0DVRQjV$NHFODLPKRZHYHUZH XQDQLPRXVSHQDOW\YHUGLFWlDQGVSHFLILFDOO\VWDWHGWKDWVXFK FRQFOXGH WKDW 6XSUHPH &RXUW SUHFHGHQW KDV QRW FOHDUO\ LQVWUXFWLRQV LQ D GHDWK SHQDOW\ FDVH ZRXOG QRW YLRODWH GXH HVWDEOLVKHGDGHIHQGDQWjVULJKWWRPRUHWKDQPHUHDFFHVVWR SURFHVV  ,G FLWLQJ /RZHQILHOG  1RWLQJ WKDW /RZHQILHOG FRPSHWHQWSV\FKLDWULFDVVLVWDQFH mH[SUHVVO\DSSURYHGWKHXVHRI$OOHQFKDUJHVLQFDSLWDOFDVHVl WKHGLVWULFWFRXUWFRQFOXGHGWKDWWKHWULDOFRXUWGLGQRWHUULQ %,QHIIHFWLYH$VVLVWDQFHRI&RXQVHO JLYLQJmDVLQJOH$OOHQFKDUJHl0DVRQ)6XSSGDW 0DVRQDUJXHVWKDWWKH2KLR6XSUHPH&RXUWXQUHDVRQDEO\ 8QGHU $('3$ WKH VFRSH RI RXU UHYLHZ LV OLPLWHG WR DSSOLHGFOHDUO\HVWDEOLVKHGIHGHUDOODZLQFRQFOXGLQJWKDWKH GHWHUPLQLQJZKHWKHUDVWDWHFRXUWjVGHFLVLRQVDUHmFRQWUDU\WR ZDV QRW GHSULYHG RIKLV FRQVWLWXWLRQDO ULJKW WR HIIHFWLYH RULQYROYHGDQXQUHDVRQDEOHDSSOLFDWLRQRIFOHDUO\HVWDEOLVKHG DVVLVWDQFH RI FRXQVHO   7R HVWDEOLVK WKDW FRXQVHO DIIRUGHG )HGHUDOODZl86&†G %HFDXVHYLRODWLRQVRI LQHIIHFWLYH DVVLVWDQFH D SHWLWLRQHU PXVW VKRZ WKDW KLV VWDWHODZDUHQRWZLWKLQRXUSXUYLHZZHZLOOUHYLHZ0DVRQjV DWWRUQH\jV SHUIRUPDQFH ZDV GHILFLHQW IDOOLQJ EHORZ DQ $OOHQ FODLP RQO\ WR GHWHUPLQH ZKHWKHU WKH WULDO FRXUWjV REMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVDQGWKDWVXFKGHILFLHQF\ VXSSOHPHQWDO LQVWUXFWLRQ ZDV FRHUFLYH mLQ LWV FRQWH[W DQG SUHMXGLFHGKLVGHIHQVH6WULFNODQGY:DVKLQJWRQ86 XQGHUDOOWKHFLUFXPVWDQFHVlsHQNLQV86DW:H 7KHREMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVLV KROG WKDW WKH $OOHQ FKDUJH ZDV QRW VR FRHUFLYH DV WR GHQ\ DKLJKO\GHIHUHQWLDORQHDQGLQFOXGHVmDVWURQJSUHVXPSWLRQ 0DVRQKLVGXHSURFHVVULJKWV WKDW FRXQVHOjV FRQGXFW IDOOV ZLWKLQ WKH ZLGH UDQJH RI UHDVRQDEOHSURIHVVLRQDODVVLVWDQFHl,GDW8QLWHG6WDWHV $VDSUHOLPLQDU\PDWWHUZHDJUHHZLWKWKH2KLR6XSUHPH Y 3LHUFH  )G   WK &LU  SODFLQJ WKH &RXUW WKDW WKH MXU\ ZDV QRW mLUUHFRQFLODEO\ GHDGORFNHGl EXUGHQ RQ WKH GHIHQGDQW WR GHPRQVWUDWH D FRQVWLWXWLRQDO 0DVRQ1(GDW7KHMXURUVLQWKLVFDVHVLPSO\ YLRODWLRQFHUWGHQLHG867RVDWLVI\WKH VWDWHGWKDWWKH\ZHUHmXQDEOHWRUHDFKDXQDQLPRXVGHFLVLRQ SUHMXGLFHUHTXLUHPHQWDGHIHQGDQWmPXVWVKRZWKDWWKHUHLV RQDQ\RQHRIWKHVHQWHQFLQJRSWLRQVls$DWDQGWKH DUHDVRQDEOHSUREDELOLW\WKDWEXWIRUFRXQVHOjVXQSURIHVVLRQDO

  ,Q 6WDWH Y +RZDUG  1(G  2KLR  WKH 2KLR 7KH 6WDWH RI 2KLR FRQWHQGV WKDW YDULRXV VXESDUWV RI 0DVRQjV 6XSUHPH &RXUW VWURQJO\ FULWLFL]HG WKH mWUDGLWLRQDOl $OOHQ FKDUJH IRU LQHIIHFWLYH DVVLVWDQFH FODLP ZHUH QRW UDLVHG RQ GLUHFW DSSHDO DQG WKXV ZHUH SODFLQJ VXFK HPSKDVLV RQ WKH MXU\jV UHDFKLQJ D GHFLVLRQ ,G DW  SURFHGXUDOO\ GHIDXOWHG 5HVSRQGHQWjV %U DW  0DVRQ UHSOLHV WKDW KH $FFRUGLQJ WR WKH +RZDUG FRXUW D WUDGLWLRQDO $OOHQ FKDUJH HVVHQWLDOO\ UDLVHG WKHVH LVVXHV WR WKH 2KLR 6XSUHPH &RXUW LQ KLV EULHI )LQDO 5HSO\ SUHVVXUHV GLVVHQWLQJ MXURUV WR FKDQJH WKHLU PLQGV DQG WKXV mVXEWO\ FKDQJHV %U DW  VHH DOVR s$ DW  FRQWLQXDQFH  H[SHUW WKH UHTXLUHPHQW WKDW WKH MXU\ YHUGLFW EH XQDQLPRXV WR RQH PRUH FORVHO\ DVVLVWDQFH  VXSSUHVVLRQ PRWLRQ  MXU\ VHOHFWLRQ 7KH UHVHPEOLQJ PDMRULW\ UXOHl ,G 7KH 2KLR 6XSUHPH &RXUW WKXV SURSRVHG SUREOHP DULVHV EHFDXVH 0DVRQ ILOHG KLV SHWLWLRQ IRU SRVWFRQYLFWLRQ UHOLHI D VXSSOHPHQWDO LQVWUXFWLRQ WKDW LW EHOLHYHG ZRXOG UHVXOW LQ WKH mHYHQ ZKLOH KLV GLUHFW DSSHDO ZDV SHQGLQJ %HFDXVH WKH WULDO FRXUW IRXQG KDQGHG WUHDWPHQW RI DOO MXURUVl ,G DW  0XFK RI WKH VXSSOHPHQWDO 0DVRQjV LQHIIHFWLYH DVVLVWDQFH FODLPV WR EH EDUUHG E\ UHV MXGLFDWD EHIRUH LQVWUXFWLRQ LQ WKLV FDVH IROORZV WKH SURSRVHG +RZDUG FKDUJH YHUEDWLP WKH 2KLR FRXUWV KDG GHFLGHG KLV GLUHFW DSSHDO DQG EHFDXVH WKH 2KLR ,QGHHG WKH WULDO FRXUW VFUXSXORXVO\ PDLQWDLQHG LWV QHXWUDOLW\ E\ DGGUHVVLQJ 6XSUHPH &RXUW HYHQWXDOO\ DGGUHVVHG WKH PHULWV RI 0DVRQjV LQHIIHFWLYH WKH MXURUV DV mMXURUVl s$ DW  UDWKHU WKDQ GLVWLQJXLVKLQJ EHWZHHQ DVVLVWDQFH FODLPV ZH GR QRW ILQG SURFHGXUDO GHIDXOW DQG ZLOO UHYLHZ m>M@XURUV IRU DFTXLWWDOl DQG mMXURUV IRU FRQYLFWLRQl DV WKH +RZDUG FRXUW ZKHWKHU WKH VWDWH FRXUWVj DGMXGLFDWLRQ ZDV FRQWUDU\ WR RU LQYROYHG DQ KDG GRQH +RZDUG  1(G DW  XQUHDVRQDEOH DSSOLFDWLRQ RI 6WULFNODQG DQG LWV SURJHQ\  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

HUURUVWKHUHVXOWRIWKHSURFHHGLQJZRXOGKDYHEHHQGLIIHUHQW 0U0F*XLUH HG@WR ,Q HYDOXDWLQJ WKH $OOHQ FKDUJH WKH 2KLR 6XSUHPH &RXUW SURYLGHDQ\JXLGDQFHRUGLUHFWLRQWRWKHMXU\LQ>KLV@RSHQLQJ ILUVWWXUQHGWR6WDWHY6SULQJHU1(G2KLR VWDWHPHQWlDQGmIDLO>HG@WRREMHFWWRLQIODPPDWRU\SRUWLRQVRI ZKLFK UHTXLUHV D WULDO FRXUW WR LPSRVH DQ DSSURSULDWH OLIH WKH VWDWHjV RSHQLQJ VWDWHPHQWl  mIDLOHG WR GHYHORS DQG VHQWHQFHLQWKHHYHQWRIDQmLUUHFRQFLODEO\GHDGORFNHGlMXU\ FRPPXQLFDWH D WKHRU\ RI GHIHQVH DQG KRZ VXFK D WKHRU\ ,GDW7KHVWDWHVXSUHPHFRXUWH[SODLQHG UHODWHG WR PLWLJDWLRQl  mIDLOHG WR HIIHFWLYHO\ OLWLJDWH WKH VWDWHjVIDLOXUHWRUHYHDOH[FXOSDWRU\HYLGHQFHlEHKDYHGLQ 1RH[DFWOLQHFDQEHGUDZQDVWRKRZORQJDMXU\PXVW DQRYHUO\DJJUHVVLYHPDQQHUDQGIDLOHGWRREMHFWWRWKH GHOLEHUDWHLQWKHSHQDOW\SKDVHEHIRUHDWULDOFRXUWVKRXOG SURVHFXWRUjVEODWDQWPLVFRQGXFW3HWLWLRQHUjV%UDW LQVWUXFWWKHMXU\WROLPLWLWVHOIWRWKHOLIHVHQWHQFHRSWLRQV RUWDNHWKHFDVHDZD\IURPWKHMXU\DVGRQHLQ6SULQJHU :HILUVWREVHUYHWKDW0DVRQjVDWWRUQH\VKDGFORVHWRHLJKW (DFK FDVH PXVW EH GHFLGHG EDVHG XSRQ WKH SDUWLFXODU PRQWKVWRSUHSDUHIRUWKHWULDOGXULQJZKLFKWLPHWKH\ILOHG FLUFXPVWDQFHV+HUHDIWHURQO\IRXUDQGRQHKDOIKRXUV PRUHWKDQILIW\SUHWULDOPRWLRQVDQGDUJXHGDWVHYHUDOSUHWULDO RI GHOLEHUDWLRQV WKH WULDO FRXUW DFWHG DSSURSULDWHO\ E\ KHDULQJV0DVRQ1(GDW0DVRQjVLQHIIHFWLYH JLYLQJDPRGLILHG+RZDUGFKDUJH>LWVHOIDPRGLILHG$OOHQ DVVLVWDQFHFODLPWKHUHIRUHUHODWHVWRGHIHQVHFRXQVHOjVIDLOXUH FKDUJH@7KHFLUFXPVWDQFHVVKRZWKDWWKHMXU\ZDVQRW WR DFKLHYH VXEVWDQWLYH UHVXOWV UDWKHU WKDQ D IDLOXUH WR ILOH LUUHFRQFLODEO\ GHDGORFNHG DQG WKH PRGLILHG +RZDUG SURFHGXUDO PRWLRQV&IHJ2OGHQY8QLWHG6WDWHV FKDUJHGLGQRWFRHUFHDGHDWKYHUGLFW )G   WK &LU   +RZHYHU 6WULFNODQGjV REMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVGRHVQRWUHTXLUHODZ\HUV  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

KLP@WRFRQWLQXHls$DWEHFDXVHKHZDVQRWSUHSDUHG SPRQ0RQGD\sXQHDQGEURNHIRUWKHHYHQLQJDW WRJRIRUZDUGDQGm>FRXOGQRW@GRVRLQJRRGFRQVFLHQFHDQG SP7KHMXU\UHWXUQHGWRWKHFRXUWKRXVHWRFRQWLQXH XQGHUWKHSURIHVVLRQDOVWDQGDUGVRIWKHFRGHRIUHVSRQVLELOLW\ GHOLEHUDWLRQVDWDPRQ7XHVGD\sXQH$IWHU WR>KLV@FOLHQWls$DW&RFRXQVHOVWDWHGWKDWKHKDG DOXQFKEUHDNIURPQRRQWRSPWKHMXU\LQIRUPHG SUHSDUHGKLVSDUWRIWKHFDVHEXWWKDWKHFRXOGQRWJRIRUZDUG WKH WULDO FRXUW WKDW LW ZDV mXQDEOH WR UHDFK D XQDQLPRXV ZLWKRXW:LQNILHOG$WWKLVSRLQWWKHWULDOFRXUWGLVWUXVWLQJ GHFLVLRQRQDQ\RQHRIWKHVHQWHQFLQJRSWLRQVls$DW GHIHQVH FRXQVHOjV PRWLYHV DVNHG :LQNILHOG ZKHWKHU KH $IWHUJLYLQJWKHMXU\DVWDQGDUG$OOHQFKDUJHWKHWULDOFRXUW ZDQWHG WR ZLWKGUDZ  :KHQ :LQNILHOG DQVZHUHG WKDW KH HQJDJHGLQWKHIROORZLQJFROORTX\ZLWKWKHMXU\IRUHPDQ mG>LG@QjW FDUH WR ZLWKGUDZl WKH WULDO FRXUW VWDWHG LWV ZLOOLQJQHVVWRUHPRYH:LQNILHOGDQGLPSRVHVDQFWLRQVE\QRW 7KH&RXUW ,VWKHUHDSRVVLELOLW\0U0F*XLUHWKDW SD\LQJDQ\IHHVs$DW$IWHUDWKLUW\PLQXWHFRQIHUHQFH DIWHU DQ DGGLWLRQDO SHULRG RI WLPH \RX ZLWK 0DVRQ DQG FRFRXQVHO :LQNILHOG LQIRUPHG WKH WULDO PD\ UHDFK DQ DJUHHPHQW"  $QG WKLV FRXUWWKDWKHZRXOGVWD\RQWKHFDVH7UDW LQVWUXFWLRQ WKDW , KDYH JLYHQ \RX DQG FRQVLGHULQJ WKDW ZLWK WKH UHVW RI WKH $OWKRXJKZHDFNQRZOHGJHWKDWDWWRUQH\VjFRQFHUQVDERXW LQVWUXFWLRQV" FRPSHQVDWLRQ PD\ DGYHUVHO\ DIIHFW WKHLU UHSUHVHQWDWLRQ RI FOLHQWVZHDUHQRWSHUVXDGHGWKDW:LQNILHOGjVSHUIRUPDQFHLQ 0U0F*XLUH 1R WKLVFDVHZDVVRGHILFLHQWDVWREHREMHFWLYHO\XQUHDVRQDEOH &I 5LFNPDQ Y %HOO  )G   WK &LU  7KH&RXUW :RXOG \RX ZLVK WR UHWXUQ WR WKHMXU\ KROGLQJ WKDW GHIHQVH FRXQVHO ZKRVH SUHSDUDWLRQ IRU WULDO URRPDQGGLVFXVVLWWKLVLQVWUXFWLRQZLWK FRQVLVWHG VROHO\ RI VL[WHHQ KRXUV RI LQWHUYLHZV ZLWK WKH WKHMXURUVDQGWKHQUHWXUQDQGUHVSRQGWR GHIHQGDQWmWRWDO>O\@IDLO>HG@WRDFWLYHO\DGYRFDWHKLVFOLHQWjV WKDWTXHVWLRQ"  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

FDXVHl*URVHFORVHY%HOO)GWK&LU FRQVLGHUDWLRQRIUHVLGXDOGRXEWGXULQJWKHVHQWHQFLQJSKDVH  GHVFULELQJ GHIHQVH FRXQVHOjV mIDLOXUH WR KDYH DQ\ ,GDW QSOXUDOLW\RSLQLRQLGDW2j&RQQRU GHIHQVH WKHRU\ ZKDWVRHYHUl DQG mIDLOXUH WR FRQGXFW DQ\ sFRQFXUULQJLQWKHMXGJPHQWVHHDOVR3HQU\Y/\QDXJK PHDQLQJIXODGYHUVDULDOFKDOOHQJHlDVmHVSHFLDOO\DSSDOOLQJl 86%HFDXVH6XSUHPH&RXUWSUHFHGHQW FHUWGHQLHG86)LUVWGHVSLWH:LQNILHOGjV FOHDUO\ HVWDEOLVKHV WKDW 0DVRQ FDQQRW VXSSRUW KLV UHVLGXDO SURWHVWDWLRQV WKH WRWDOLW\ RI WKH FLUFXPVWDQFHV GRHV QRW GRXEWDUJXPHQWZHGHQ\KDEHDVUHOLHIZLWKUHVSHFWWRWKLV VXJJHVW WKDW GHIHQVH FRXQVHO ZDV XQSUHSDUHG IRU WKH WULDO FODLP SKDVH8QOLNHWKHmFRPSOHWHODFNRISUHWULDOSUHSDUDWLRQlWKDW WKH.LPPHOPDQ&RXUWGHFULHG86DW:LQNILHOG )DLOXUHWR5HPRYHWKH'HDWK6HQWHQFHIURPWKHsXU\ DQGFRFRXQVHOILOHGQXPHURXVSUHWULDOPRWLRQVDQGDUJXHG VHYHUDOSUHWULDOKHDULQJV$OWKRXJKDWWRUQH\VFDQDOZD\VGR ,Q$OOHQY8QLWHG6WDWHV86WKH6XSUHPH PRUH LQ SUHSDUDWLRQ IRU D WULDO ZH FDQQRW FRQFOXGH WKDW &RXUW KHOG WKDW WKH WULDO FRXUW GLG QRW HUU LQ JLYLQJ D 0DVRQjVDWWRUQH\VGLGQRWSUHSDUHHQRXJK VXSSOHPHQWDO LQVWUXFWLRQ WR D GHDGORFNHG MXU\  ,G DW  7KHFRQVWLWXWLRQDOLW\RIDQ$OOHQFKDUJHVRPHWLPHVUHIHUUHG 6HFRQGZHDUHQRWSHUVXDGHGWKDWWKHDFWVDQGRPLVVLRQVRI WR DV D mG\QDPLWHl FKDUJH WXUQV RQ ZKHWKHU WKH FKDUJH LQ GHIHQVHFRXQVHOWKDW0DVRQLGHQWLILHVDVHYLQFLQJDODFNRI TXHVWLRQZDVmFRHUFLYHl/RZHQILHOGY3KHOSV86 UHDVRQDEOHSURIHVVLRQDOMXGJPHQWLQIDFWYLRODWHGSUHYDLOLQJ     $Q $OOHQ FKDUJH PXVW EH UHYLHZHG mLQ LWV SURIHVVLRQDOQRUPV:HKDYHUHDGWKHRSHQLQJVWDWHPHQWVRI FRQWH[WDQGXQGHUDOOWKHFLUFXPVWDQFHVl,GDWTXRWLQJ ERWK WKH SURVHFXWLRQ DQG WKH GHIHQVH DQG GLVDJUHH ZLWK sHQNLQV Y 8QLWHG 6WDWHV  86    SHU 0DVRQjVFKDUDFWHUL]DWLRQVRIWKHP:HFDQQRWLGHQWLI\DQ\ FXULDP 0DVRQDUJXHVWKDWWKHWULDOFRXUWjVVXSSOHPHQWDO mLQIODPPDWRU\ SRUWLRQVl RI WKH SURVHFXWRUjV VWDWHPHQW LQVWUXFWLRQWRWKHMXU\GXULQJLWVGHOLEHUDWLRQVDWWKHSHQDOW\ 3HWLWLRQHUjV%UDWFRQYHUVHO\ZHFRQFOXGHWKDWGHIHQVH SKDVHRIWKHWULDOZDVDQLPSURSHU$OOHQFKDUJH FRXQVHO SURYLGHG DGHTXDWH JXLGDQFH WR WKH MXU\ E\ FOHDUO\ DUWLFXODWLQJWKHWKHRU\WKDW&KULVUDWKHUWKDQ0DVRQVKRXOGEH 7KHWULDOFRXUWJDYHWKHIROORZLQJSUHOLPLQDU\LQVWUXFWLRQWR RQWULDOIRU5RELQjVPXUGHU0DVRQjV%UDG\GHULYHGFODLPRI WKHMXU\ LQHIIHFWLYHDVVLVWDQFHLVVLPSO\WRRVXPPDU\IRUXVWRUHYLHZ $V IRU WKH GHSLFWLRQ RI GHIHQVH FRXQVHO DV DEXVLYH DQG DUJXPHQWDWLYH ZH UHFRJQL]H WKDW WKH UHFRUG UHYHDOV  ,Q /RZHQILHOG WKH MXU\ UHTXHVWHG DGGLWLRQDO LQVWUXFWLRQV DIWHU LW FRQVLGHUDEOHDQLPRVLW\EHWZHHQWKHSURVHFXWRUDQGGHIHQVH EHFDPH XQDEOH WR UHDFK D GHFLVLRQ RQ WKH VHFRQG GD\ RI GHOLEHUDWLRQV

FRXQVHOEXWIDLOWRVHHKRZWKHODWWHUjVDGYRFDF\SUHMXGLFHG  86 DW  7KH WULDO FRXUW WKHQ DVNHG WKH LQGLYLGXDO MXURUV WR DQVZHU

0DVRQjV GHIHQVH  )LQDOO\ DQ\ IDLOXUH WR REMHFW WR LQ ZULWLQJ ZKHWKHU mIXUWKHU GHOLEHUDWLRQV ZRXOG EH KHOSIXO LQ REWDLQLQJ D

SURVHFXWRULDO PLVFRQGXFW GLG QRW FRQVWLWXWH LQHIIHFWLYH YHUGLFWl ,G (LJKW MXURUV UHVSRQGHG LQ WKH DIILUPDWLYH ,G $IWHU GHQ\LQJ D GHIHQVH PRWLRQ IRU D PLVWULDO WKH WULDO FRXUW GLUHFWHG WKH MXU\ WR UHWXUQ DVVLVWDQFHRIFRXQVHOEHFDXVHDVGLVFXVVHGEHORZZHGRQRW WR WKH FRXUWURRP IRU IXUWKHU LQVWUXFWLRQV ,G $W WKLV WLPH WKH MXU\ JDYH EHOLHYHWKDWWKHSURVHFXWRUDFWHGLPSURSHUO\:HWKHUHIRUH WKH WULDO FRXUW D QHZ QRWH WKDW VWDWHG WKDW VRPH RI WKH MXURUV KDG

GHQ\KDEHDVUHOLHIZLWKUHVSHFWWRWKLVFODLP PLVXQGHUVWRRG KLV RULJLQDO TXHVWLRQ ,G 7KH WULDO FRXUW SROOHG WKH LQGLYLGXDO MXURUV DJDLQ EXW DVNHG ZKHWKHU WKH\ IHOW WKDW mDQ\ IXUWKHU

6HQWHQFLQJ3KDVH GHOLEHUDWLRQV ZLOO HQDEOH \RX WR DUULYH DW D YHUGLFW"l ,G (OHYHQ MXURUV UHVSRQGHG LQ WKH DIILUPDWLYH ,G DW  7KH WULDO FRXUW WKHQ JDYH WKH MXU\

8QGHU WKH (LJKWK $PHQGPHQW WKH MXU\ LQ D FDSLWDO FDVH DQ $OOHQ FKDUJH ,G 7KLUW\ PLQXWHV ODWHU WKH MXU\ UHWXUQHG D VHQWHQFH RI GHDWK ,G 7KH 6XSUHPH &RXUW KHOG WKDW WKH SROOLQJ RI WKH MXU\ DQG WKH PD\ mQRW EH SUHFOXGHG IURP FRQVLGHULQJ DV D PLWLJDWLQJ VXSSOHPHQWDO LQVWUXFWLRQ ZHUH QRW FRHUFLYH DV WR YLRODWH WKH SHWLWLRQHUjV FRQVWLWXWLRQDO ULJKWV ,G DW   0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

mPLWLJDWLQJFLUFXPVWDQFHVlDVmFLUFXPVWDQFHVQRWFRQVWLWXWLQJ IDFWRUDQ\DVSHFWRIDGHIHQGDQWjVFKDUDFWHURUUHFRUGDQGDQ\ MXVWLILFDWLRQRUH[FXVHIRUWKHRIIHQVHLQTXHVWLRQEXWZKLFK RIWKHFLUFXPVWDQFHVRIWKHRIIHQVHWKDWWKHGHIHQGDQWSURIIHUV LQIDLUQHVVDQGPHUF\PD\EHFRQVLGHUHGDVH[WHQXDWLQJRU DVDEDVLVIRUDVHQWHQFHOHVVWKDQGHDWKl/RFNHWWY2KLR UHGXFLQJWKHGHJUHHRIPRUDOFXOSDELOLW\RUSXQLVKPHQWlLG 862KLRODZWKXVSURYLGHVWKDWRQFH DW  LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG WKH TXHVWLRQ WKHSURVHFXWLRQKDVSURYHQRQHRUPRUHVWDWXWRU\DJJUDYDWLQJ EHIRUHWKH6XSUHPH&RXUWZDVZKHWKHUDVHQWHQFHRIGHDWKIRU FLUFXPVWDQFHV EH\RQG D UHDVRQDEOH GRXEW WKH MXU\ PXVW WKH FULPH RI UDSH ZDV FUXHO DQG XQXVXDO SXQLVKPHQW ZHLJKWKHDJJUDYDWLQJFLUFXPVWDQFHVDJDLQVWWKHHYLGHQFHLQ SURKLELWHGE\WKH(LJKWK$PHQGPHQW,GDW,QGHHGWKH PLWLJDWLRQ EHIRUH LPSRVLQJ D GHDWK VHQWHQFH  2+,2 5(9 WULDOFRXUWJDYHWKHLQVWUXFWLRQSXUVXDQWWRVWDWHVWDWXWH,GDW &2'( $11†%sXULHVPD\FRQVLGHUDVPLWLJDWLQJ &RNHUWKHUHIRUHSURYLGHVQRVXSSRUWIRUWKHGXHSURFHVV HYLGHQFH mWKH KLVWRU\ FKDUDFWHU DQG EDFNJURXQG RI WKH FODLPWKDW0DVRQPXVWVXFFHVVIXOO\PDNHIRUXVWRUHYLHZD RIIHQGHUlFHUWDLQVSHFLILHGIDFWRUVDQGm>D@Q\RWKHUIDFWRUV FKDOOHQJHGMXU\LQVWUXFWLRQ WKDWDUHUHOHYDQWWRWKHLVVXHRIZKHWKHUWKHRIIHQGHUVKRXOGEH VHQWHQFHGWRGHDWKl,G0RUHRYHUDGHIHQGDQWLVHQWLWOHGWR 0DVRQ DOVR FRQWHQGV WKDW mWKH MXU\jV GLVFUHWLRQ ZDV QRW mJUHDW ODWLWXGHl LQ SUHVHQWLQJ HYLGHQFH RI DQ\ DQG DOO VXIILFLHQWO\ JXLGHG XQGHU *UHJJ Y *HRUJLD  86  PLWLJDWLQJIDFWRUV,G†& l  3HWLWLRQHUjV %U DW  *UHJJ KRZHYHU VLPSO\ UHFRPPHQGHGWKDWMXULHVLQGHDWKSHQDOW\FDVHVEHmDSSULVHG 7KHVROHDJJUDYDWLQJFLUFXPVWDQFHLQWKLVFDVHZDVWKHUDSH RIWKHLQIRUPDWLRQUHOHYDQWWRWKHLPSRVLWLRQRI>WKHGHDWK@ 6HH2+,2 5(9 &2'( $11†$ :KHQWKHWULDO VHQWHQFHDQGSURYLGHGZLWKVWDQGDUGVWRJXLGHLWVXVHRIWKH FRXUWFRQYHQHGWKHSHQDOW\SKDVHRI0DVRQjVWULDORQsXQH LQIRUPDWLRQl  *UHJJ  86 DW   7KH WULDO FRXUW  GHIHQVH FRXQVHO RIIHUHG WKH WHVWLPRQ\ RI VHYHQ SURYLGHGVXFKJXLGDQFHLQWKLVFDVHLWLQVWUXFWHGWKHMXU\RI ZLWQHVVHVDVZHOODV0DVRQjVXQVZRUQWHVWLPRQ\EXWGLGQRW LWVGXW\WRZHLJKDJJUDYDWLQJFLUFXPVWDQFHVDJDLQVWPLWLJDWLQJ LQTXLUH LQWR PLWLJDWLQJ HYLGHQFH  7KH ILUVW WZR ZLWQHVVHV IDFWRUVWKHODWWHUmLQFOXGLQJEXWQRWOLPLWHGWRWKHQDWXUHDQG ZHUHGHSXW\VKHULIIVIURPWKH0DULRQ&RXQW\sDLOZKRVWDWHG FLUFXPVWDQFHVRIWKHRIIHQVHDQGWKHKLVWRU\FKDUDFWHUDQG WKDW 0DVRQ KDG QRW EHHQ D SUREOHP SULVRQHU  'HIHQVH EDFNJURXQGRIWKH'HIHQGDQWDQGDQ\RWKHUIDFWRUVWKDWDUH FRXQVHOWKHQFDOOHGIRXUPHPEHUVRI0DVRQjVIDPLO\*LYHQ UHOHYDQW WR WKH LVVXH RI ZKHWKHU WKH 'HIHQGDQW VKRXOG EH QRPRUHGLUHFWLRQWKDQWRVSHDNRQ0DVRQjVEHKDOI0DVRQjV VHQWHQFHGWRGHDWKls$DW:HDJUHHZLWKWKH2KLR PRWKHUEURWKHUVLVWHUDQGFRXVLQVLPSO\DVNHGWKHMXU\QRW 6XSUHPH&RXUWWKDWmWKHLQVWUXFWLRQVFRQVLGHUHGDVDZKROH WRUHFRPPHQGWKHGHDWKSHQDOW\ DGHTXDWHO\ JXLGHG WKH MXU\ DQG GLG QRW UHVWULFW LWV FRQVLGHUDWLRQRIPLWLJDWLQJHYLGHQFHl0DVRQ1(GDW 'HIHQVHFRXQVHOjVGLUHFWH[DPLQDWLRQRI0DVRQjVZLIH7HUUL   :H WKHUHIRUH GHQ\ KDEHDV UHOLHI ZLWK UHVSHFW WR WKLV m7HUULlZDVDOPRVWDVSHUIXQFWRU\$VNHGZKHWKHUVKHKDG FODLP DQ\WKLQJ WR WHOO WKH MXU\ 7HUUL PDGH DQ HPRWLRQDO SOHD IRU PHUF\&RXQVHOWKHQDVNHG7HUULWRLGHQWLI\DIHZSLFWXUHV )DLOXUHWR,QVWUXFWRQ5HVLGXDO'RXEW WKDW 0DVRQ KDG GUDZQ IRU KHU  2Q FURVVH[DPLQDWLRQ WKH SURVHFXWRU TXHVWLRQHG 7HUUL DERXW 0DVRQjV DUW DQG KLV 0DVRQDUJXHVWKDWKHZDVGHQLHGGXHSURFHVVE\WKHWULDO DFWLYLWLHV RQ WKH GD\ WKDW 5RELQ GLVDSSHDUHG  5HGLUHFW FRXUWjV UHIXVDO WR JLYH D SURSRVHG LQVWUXFWLRQ RQ UHVLGXDO GRXEW  ,Q )UDQNOLQ Y /\QDXJK  86   D PDMRULW\RIWKH6XSUHPH&RXUWDJUHHGWKDWFDSLWDOGHIHQGDQWV GR QRW KDYH D FRQVWLWXWLRQDO ULJKW WR GHPDQG MXU\  $V 0DVRQ QRWHV GHIHQVH FRXQVHO GLG QRW LQTXLUH DERXW 0DVRQjV LQYROYHPHQW LQ VDYLQJ D IHOORZ LQPDWH IURP DWWHPSWHG VXLFLGH  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

UHFURVVDQGIXUWKHUUHGLUHFWH[DPLQDWLRQFRQFHUQHG7HUULjV UHYLHZHUURUVRQLQVWUXFWLRQVDUHQRWUHYLHZDEOHXQOHVVWKH\ LQWHUYLHZZLWKWKHSROLFH'HIHQVHFRXQVHOGLGQRWTXHVWLRQ GHSULYHDGHIHQGDQWRIFRQVWLWXWLRQDOGXHSURFHVVl*DOOY 7HUULDJDLQDERXWPLWLJDWLQJHYLGHQFH 3DUNHU)GWK&LUFHUWGHQLHG 86   7KH TXHVWLRQ EHIRUH XV LV mZKHWKHU WKH DLOLQJ 0DVRQKLPVHOIVSRNHDVWKHODVWPLWLJDWLQJZLWQHVV,QKLV LQVWUXFWLRQ E\ LWVHOI VR LQIHFWHG WKH HQWLUH WULDO WKDW WKH XQVZRUQVWDWHPHQWKHGHFODUHGKLVLQQRFHQFHDQGUHTXHVWHG UHVXOWLQJ FRQYLFWLRQ YLRODWHV GXH SURFHVVl  (VWHOOH Y WKDW WKH MXU\ mJLYH PH WKH FKDQFH WR WDNH LW WKURXJK WKH 0F*XLUH86TXRWLQJ&XSSY1DXJKWHQ $SSHDOV&RXUWVls$DW'HIHQVHFRXQVHOTXHVWLRQHG 86  0DVRQDERXWKLVGUDZLQJVDQGWKHQUHVWHG7KHSURVHFXWRU RIIHUHGQRHYLGHQFHLQUHEXWWDOEXWHPSKDVL]HG GXULQJKLV )DLOXUHWR'HILQH0LWLJDWLRQ FORVLQJDUJXPHQWWKDWGHIHQVHFRXQVHOKDGQRWSUHVHQWHGDQ\ PLWLJDWLQJ HYLGHQFH DERXW 0DVRQjV KLVWRU\ FKDUDFWHU RU 0DVRQFRPSODLQVWKDWWKHWULDOFRXUWIDLOHGWRH[SODLQWKH EDFNJURXQG PHDQLQJRImPLWLJDWLRQlRUmPLWLJDWLQJIDFWRUlOHDYLQJWKH MXU\mWRVSHFXODWHWKURXJKRXWWKHWULDODVWRZKDWLWZDVWKH\ D)DLOXUHWR,QYHVWLJDWHRUWR3UHSDUH:LWQHVVHV ZHUHVXSSRVHGWREHFRQVLGHULQJl3HWLWLRQHUjV%UDW :HQRWHDVDQLQLWLDOPDWWHUWKDWFRQWUDU\WR0DVRQjVFODLPV 0DVRQ DUJXHV WKDW GHIHQVH FRXQVHO UHQGHUHG LQHIIHFWLYH WKH6XSUHPH&RXUWSUHFHGHQWWKDWH[LVWHGSULRUWR0DVRQjV DVVLVWDQFHE\IDLOLQJWRFRQGXFWDQLQGHSHQGHQWDQGWKRURXJK FRQYLFWLRQGLGQRWFOHDUO\HVWDEOLVKDGHIHQGDQWjVGXHSURFHVV LQYHVWLJDWLRQRIKLVOLIHKLVWRU\DQGSV\FKRORJLFDOEDFNJURXQG ULJKWWRDMXU\LQVWUXFWLRQRQWKHGHILQLWLRQRIPLWLJDWLRQ ZKHQ KLV IDPLO\ PHPEHUV ZHUH DYDLODEOH IRU LQWHUYLHZV 0DVRQjVUHOLDQFHRQ&RNHUY*HRUJLD86 WKHUHE\ IRUHFORVLQJ WKH GLVFRYHU\ RI SRWHQWLDO PLWLJDWLQJ LVXQDYDLOLQJ$OWKRXJKWKHWULDOFRXUWLQWKDWFDVHGLGGHILQH HYLGHQFH  +H DOVR FRQWHQGV WKDW GHIHQVH FRXQVHOjV SHUIRUPDQFH LQ SUHSDULQJ 0DVRQjV IDPLO\ PHPEHUV EHIRUH FDOOLQJ WKHP DV PLWLJDWLRQ ZLWQHVVHV ZDV FRQVWLWXWLRQDOO\  8QGHU %XFKDQDQ Y $QJHORQH  86   WKH VWDQGDUG GHILFLHQW IRU UHYLHZLQJ MXU\ LQVWUXFWLRQV IURP WKH VHOHFWLRQ SKDVH RI D FDSLWDO VHQWHQFLQJ SURFHVV LV mZKHWKHU WKHUH LV D UHDVRQDEOH OLNHOLKRRG WKDW WKH ,QH[DPLQLQJ0DVRQjVFODLPRILQHIIHFWLYHDVVLVWDQFHDWWKH MXU\ KDV DSSOLHG WKH FKDOOHQJHG LQVWUXFWLRQ LQ D ZD\ WKDW SUHYHQWV WKH

VHQWHQFLQJVWDJHWKH2KLR6XSUHPH&RXUWLQIHUUHGIURPWKH FRQVLGHUDWLRQ RI FRQVWLWXWLRQDOO\ UHOHYDQW HYLGHQFHl ,G DW  TXRWLQJ %R\GH Y &DOLIRUQLD  86     7KH 6XSUHPH &RXUW KDV UHFRUGmWKDWGHIHQVHFRXQVHOKDGYROXPLQRXVUHFRUGVDERXW WKXV KHOG WKDW WKH (LJKWK DQG )RXUWHHQWK $PHQGPHQWV GR QRW UHTXLUH D >0DVRQjV@KLVWRU\DQGEDFNJURXQGlDQGQRWHGWKDWm>F@RXQVHO WULDO FRXUW WR JLYH D VSHFLILF LQVWUXFWLRQ RQ PLWLJDWLQJ HYLGHQFH PXFK OHVV SUHSDUHG WZHOYH H[KLELWV GRFXPHQWLQJ DVSHFWV RI 0DVRQjV GHILQH ZKDW LW PHDQV ,G DW  KROGLQJ WKDW D MXU\ LQVWUXFWLRQ WR EDVH FKLOGKRRGVXFKDVUHSRUWVWKDWKHZDVEHDWHQE\KLVIDWKHUDQG WKH GHFLVLRQ RQ mDOO WKH HYLGHQFHl ZDV FRQVWLWXWLRQDOO\ VXIILFLHQW EHFDXVH UHOHDVHGE\KLVSDUHQWVWRMXYHQLOHDXWKRULWLHVDVZHOODVHDUO\ LW mDIIRUGHG MXURUV DQ RSSRUWXQLW\ WR FRQVLGHU PLWLJDWLQJ HYLGHQFHl 7KH RQO\ FRQVWLWXWLRQDO UHTXLUHPHQW LV WKDW WKH LQVWUXFWLRQV GR QRW SUHFOXGH D SV\FKRORJLFDO HYDOXDWLRQV EXW GLG QRW SUHVHQW WKHP WR WKH FDSLWDO MXU\ IURP FRQVLGHULQJ PLWLJDWLQJ HYLGHQFH ,G DW  VHH DOVR MXU\l0DVRQ1(GDW7KHGLVWULFWFRXUWVLPLODUO\ :HHNV Y $QJHORQH  86    GHHPHG PHULWOHVV 0DVRQjV FODLP mWKDW KLV WULDO FRXQVHO :H QRWH WKDW WKH LQVWUXFWLRQ FKDOOHQJHG LQ WKLV FDVH FRPSOLHG ZLWK WKH LPSURSHUO\ IDLOHG WR LQYHVWLJDWH SRVVLEOH SV\FKRVRFLDO %XFKDQDQ PDQGDWH WKDW D WULDO FRXUW VKRXOG QRW UHVWULFW D MXU\jV

PLWLJDWLQJ IDFWRUV WKDW FRXOG KDYH VSDUHG KLP WKH GHDWK FRQVLGHUDWLRQ RI PLWLJDWLQJ HYLGHQFH +RZHYHU %XFKDQDQ LV QRW

SHQDOW\l0DVRQ)6XSSGDW FRQWUROOLQJ EHFDXVH LW ZDV GHFLGHG WKUHH DQG D KDOI \HDUV DIWHU 0DVRQjV FRQYLFWLRQ DQG XQGHU $('3$ 6XSUHPH &RXUW SUHFHGHQW PXVW EH LQ H[LVWHQFH SULRU WR D FRQYLFWLRQ WR FRQWURO D KDEHDV FRXUWjV DQDO\VLV 6HH :LOOLDPV  )G DW   0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

([WULQVLF(YLGHQFH 0XFKKDVEHHQPDGHLQWKLVFDVHRIWKHWZHOYHH[KLELWVWKDW GHIHQVHFRXQVHOSUHSDUHGLQFRQMXQFWLRQZLWKWKHYLGHRWDSHG 7KLVFDVHLQYROYHVDQRXWRIFRXUWLQYHVWLJDWLRQVLPLODUWR GHSRVLWLRQRI'UsRVHSK76SDUHm6SDUHlWKHSV\FKLDWULVW WKHRQHLQ'RDQLQZKLFKDMXURUSXWOLSVWLFNRQKHUDUPWR DSSRLQWHG E\ WKH WULDO FRXUW WR DVVLVW WKH GHIHQVH ZLWK WKH VLPXODWHDEUXLVHDQGWKHQGHWHUPLQHGWKDWVXFKDEUXLVHFRXOG PLWLJDWLRQSKDVH7KHPHUHH[LVWHQFHRIPLWLJDWLRQH[KLELWV EHVHHQLQDGDUNHQHGURRP'RDQ)GDW,QWKLV KRZHYHU LV QRW FRQFOXVLYH EHFDXVH WKH TXHVWLRQ XQGHU FDVH MXURU 0DU\ 'RZQV m'RZQVl GLVDVVHPEOHG KHU 6WULFNODQG LV ZKHWKHU GHIHQVH FRXQVHOjV LQYHVWLJDWLRQ LQWR KXVEDQGjVUHYROYHUWRVHHZKHWKHUWKHJULSORRNHGOLNHWKHRQH SRWHQWLDOPLWLJDWLRQHYLGHQFHZDVFRQVWLWXWLRQDOO\DGHTXDWH VKRZQ LQ FRXUW 7KH MXURU VWDWHG WKDW VKH FRQGXFWHG WKLV H[SHULPHQW DQG LQIRUPHG RWKHU MXURUV DIWHU WKH MXU\ KDG >6@WUDWHJLFFKRLFHVPDGHDIWHUWKRURXJKLQYHVWLJDWLRQRI UHWXUQHGDJXLOW\YHUGLFW+RZHYHU%HFNKROWZKRGLGQRW ODZDQGIDFWVUHOHYDQWWRSODXVLEOHRSWLRQVDUHYLUWXDOO\ SDUWLFLSDWH LQ WKH MXU\jV GHOLEHUDWLRQV WHVWLILHG WKDW 'RZQV XQFKDOOHQJHDEOH DQG VWUDWHJLF FKRLFHV PDGH DIWHU OHVV UHSRUWHGKHUUHVXOWVGXULQJWKHWULDO7KHWULDOFRXUWIRXQGWKDW WKDQFRPSOHWHLQYHVWLJDWLRQDUHUHDVRQDEOHSUHFLVHO\WR 'RZQVjVDFWLRQVmGLGQRWLQIOXHQFHWKHYHUGLFWLQWKLVFDVH WKHH[WHQWWKDWUHDVRQDEOHSURIHVVLRQDOMXGJPHQWVVXSSRUW DQGDVVXFK>0DVRQ@ZDVQRWSUHMXGLFHGE\WKLVFRQGXFWl WKHOLPLWDWLRQVRQLQYHVWLJDWLRQ,QRWKHUZRUGVFRXQVHO s$DW KDVDGXW\WRPDNHUHDVRQDEOHLQYHVWLJDWLRQVRUWRPDNH DUHDVRQDEOHGHFLVLRQWKDWPDNHVSDUWLFXODULQYHVWLJDWLRQV :H UHYLHZ FRQVWLWXWLRQDO HUURUV DW WULDO VXFK DV 6L[WK XQQHFHVVDU\  ,Q DQ\ LQHIIHFWLYHQHVV FDVH D SDUWLFXODU $PHQGPHQW YLRODWLRQV XQGHU D KDUPOHVV HUURU VWDQGDUG GHFLVLRQQRWWRLQYHVWLJDWHPXVWEHGLUHFWO\DVVHVVHGIRU %UHFKWY$EUDKDPVRQ86'RDQ UHDVRQDEOHQHVVLQDOOWKHFLUFXPVWDQFHVDSSO\LQJDKHDY\ )GDW7KHKDEHDVSHWLWLRQHUPXVWVKRZWKDWWKHWULDO PHDVXUHRIGHIHUHQFHWRFRXQVHOjVMXGJPHQWV HUURU mKDG VXEVWDQWLDO DQG LQMXULRXV HIIHFW RU LQIOXHQFH LQ  GHWHUPLQLQJ WKH MXU\jV YHUGLFWl  'RDQ  )G DW  >:@KDWLQYHVWLJDWLRQ GHFLVLRQVDUHUHDVRQDEOHGHSHQGV TXRWLQJ %UHFKW  86 DW   $OWKRXJK 'RZQVjV FULWLFDOO\ RQ >WKH LQIRUPDWLRQ WKDW WKH GHIHQGDQW SUHVHQWDWLRQ RI KHU RXWRIFRXUW ILQGLQJV PD\ KDYH EHHQ VXSSOLHV@)RUH[DPSOHZKHQWKHIDFWVWKDWVXSSRUWD FRQVWLWXWLRQDO HUURU 0DVRQ FDQQRW GHPRQVWUDWH WKDW LW FHUWDLQSRWHQWLDOOLQHRIGHIHQVHDUHJHQHUDOO\NQRZQWR VXEVWDQWLDOO\DIIHFWHGRULQIOXHQFHGWKHMXU\jVYHUGLFW7KH FRXQVHOEHFDXVHRIZKDWWKHGHIHQGDQWKDVVDLGWKHQHHG HYLGHQFHDWWULDOZDVPRUHH[WHQVLYHWKDQWKHJXQJULSWKDW IRUIXUWKHULQYHVWLJDWLRQPD\EHFRQVLGHUDEO\GLPLQLVKHG ZDVWKHVXEMHFWRI'RZQVjVH[SHULPHQWLQIDFWWKHDOOHJHG RU HOLPLQDWHG DOWRJHWKHU  $QG ZKHQ D GHIHQGDQW KDV PXUGHUZHDSRQZDVWKHZRRGHQERDUGZLWKQDLOVDWWDFKHGWR JLYHQ FRXQVHO UHDVRQ WR EHOLHYH WKDW SXUVXLQJ FHUWDLQ LW:HWKHUHIRUHGHQ\KDEHDVUHOLHIZLWKUHVSHFWWRWKLVFODLP LQYHVWLJDWLRQV ZRXOG EH IUXLWOHVV RU HYHQ KDUPIXO FRXQVHOjVIDLOXUHWRSXUVXHWKRVHLQYHVWLJDWLRQVPD\QRW +6HQWHQFLQJ3KDVH,QVWUXFWLRQV ODWHU EH FKDOOHQJHG DV XQUHDVRQDEOH  ,Q VKRUW LQTXLU\ LQWRFRXQVHOjVFRQYHUVDWLRQVZLWKWKHGHIHQGDQWPD\EH 0DVRQFODLPVWKDWWKHWULDOFRXUWjVLQVWUXFWLRQVWRWKHMXU\ FULWLFDOWRDSURSHUDVVHVVPHQWRIFRXQVHOjVLQYHVWLJDWLRQ OHGWRmDQXQUHOLDEOHVHQWHQFLQJGHWHUPLQDWLRQl3HWLWLRQHUjV GHFLVLRQV %U DW   6SHFLILFDOO\ KH DUJXHV WKDW WKH WULDO FRXUW FRPPLWWHG FRQVWLWXWLRQDO HUURU E\  IDLOLQJ WR GHILQH 6WULFNODQG86DW:HKDYHSUHYLRXVO\KHOGWKDW mPLWLJDWLRQlRUmPLWLJDWLQJIDFWRUlUHIXVLQJWRLQVWUXFWWKH WKH FRPSOHWH IDLOXUH WR LQYHVWLJDWH PLWLJDWLQJ HYLGHQFH MXU\RQUHVLGXDOGRXEWDQGIDLOLQJWRUHPRYHWKHGHDWK FRQVWLWXWHVLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO6HH$XVWLQY VHQWHQFH IURP DQ DOOHJHGO\ GHDGORFNHG MXU\  m2Q KDEHDV  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

%HOO)GWK&LUFHUWGHQLHG86 DQG,IHOWWKDWSHRSOHZHUHPDNLQJnLIWKH\ZHUHMXGJLQJn  DQG  86   FI 6FRWW Y 0LWFKHOO  PDNLQJMXGJPHQWDOFRPPHQWVRIWKDWVRUWKRZFRXOGWKH\ )GWK&LUm:LWKRXWHIIHFWLYHUHVHDUFKLQWRWKH IDLUO\MXGJHWKHFDVH"ls$DW%HFNKROWKRZHYHUGLG DYDLODEOH PLWLJDWLQJ WHVWLPRQ\ RI FRXUVH LW ZRXOG EH QRWSDUWLFLSDWHLQWKHMXU\jVGHOLEHUDWLRQV%HFDXVH0DVRQ LPSRVVLEOHIRUWKHODZ\HUVWRKDYHPDGHDQLQIRUPHGGHFLVLRQ GRHV QRW RIIHUDQ\HYLGHQFHRWKHUWKDQWKDWZKLFKWKHWULDO HLWKHUZD\lFHUWGHQLHG86:HKDYH FRXUW KDG DW WKH WLPH LW PDGH LWV IDFWXDO ILQGLQJ ZH GHQ\ DOVR HPSKDVL]HG WKH LPSRUWDQFH RI DQ LQGHSHQGHQW KDEHDVUHOLHIZLWKUHVSHFWWRWKLVFODLP LQYHVWLJDWLRQm7KHVROHVRXUFHRIPLWLJDWLQJIDFWRUVFDQQRW SURSHUO\ EH WKDW LQIRUPDWLRQ ZKLFK >D@ GHIHQGDQW PD\ 3UHVXPSWLRQRI*XLOW YROXQWHHU FRXQVHO PXVW PDNH VRPH HIIRUW DW LQGHSHQGHQW LQYHVWLJDWLRQLQRUGHUWRPDNHDUHDVRQHGLQIRUPHGGHFLVLRQ 0DVRQDOOHJHVWKDWMXURU5XVVHOO/'HQQLVH[SUHVVHGEHOLHI DVWRWKHLUXWLOLW\l&DUWHUY%HOO)GWK&LU LQ0DVRQjVJXLOWEHIRUHIRUPDOGHOLEHUDWLRQVEHJDQ:KHQ  TXHVWLRQHGDERXWVXFKDVWDWHPHQWWKHMXURUDFNQRZOHGJHG VD\LQJ m0D\EH KHjV SOHDGLQJ JXLOW\l s$ DW  EXW 7KHUHFRUGEHIRUHXVLVLQDGHTXDWHIRUDPHDQLQJIXOUHYLHZ WHVWLILHGWKDWKHmUHDOO\KDGQjWIRUPHGDQRSLQLRQ,WZDV RI0DVRQjVFODLPRILQHIIHFWLYHDVVLVWDQFHRIFRXQVHO:H MXVW ZLVKIXO WKLQNLQJ EHFDXVH LW ZDV ODWH LQ WKH GD\ DQG UHFRJQL]HWKDWWKH6WULFNODQG&RXUWGLUHFWHGVWDWHFRXUWVmWR HYHU\ERG\ZDVWLUHGls$DW7KHWULDOFRXUWIRXQGmQR DQDO\]HHIIHFWLYHQHVVEDVHGRQWKHWKHQSUHYDLOLQJQRUPVDQG VXEVWDQWLDOHYLGHQFHWKDWDQ\MXURUPDGHDQ\FRPPHQWGXULQJ FRXQVHOjV SHUVSHFWLYH DW WKH WLPHl :LOOLDPV Y &R\OH  WKHWULDOZKLFKGHPRQVWUDWHGWKDWKHRUVKHKDGIDLOHGWRNHHS )G   WK &LU  ZKLFK HQWDLOV D mKLJKO\ DQRSHQPLQGVRDVWREHDEOHWRIDLUO\GHFLGHWKHHYLGHQFHLQ GHIHUHQWLDOlVWDQGDUG6WULFNODQG86DW+RZHYHU WKLV FDVHl  s$ DW   $EVHQW FOHDU DQG FRQYLQFLQJ LQRUGHUIRUXVWRHYDOXDWHZKHWKHUGHIHQVHFRXQVHOUHQGHUHG HYLGHQFHWRWKHFRQWUDU\ZHPXVWGHIHUWRWKHVWDWHFRXUWjV FRQVWLWXWLRQDOO\LQHIIHFWLYHDVVLVWDQFHDWVHQWHQFLQJZHPXVW IDFWXDOILQGLQJDQGWKHUHIRUHGHQ\KDEHDVUHOLHIZLWKUHVSHFW NQRZPRUHDERXWWKHH[WHQWRIFRXQVHOjVLQYHVWLJDWLRQDQG WRWKLVFODLP SUHSDUDWLRQ RI PLWLJDWLQJ HYLGHQFH  7KHUH LV D VLJQLILFDQW OLNHOLKRRGWKDWGHIHQVHFRXQVHODFWHGXQUHDVRQDEO\LQIDLOLQJ 6OHHSLQJ'XULQJ7ULDO WR FRQGXFW DQ LQGHSHQGHQW DQG WKRURXJK LQYHVWLJDWLRQ RI 0DVRQjVEDFNJURXQG%HFDXVHWKHUHFRUGDVLWQRZVWDQGV 0DVRQ DOOHJHV WKDW MXURU :DQGD 6WUDXE m6WUDXEl IHOO UHIOHFWVGLVSXWHVDERXWGHIHQVHFRXQVHOjVSHUIRUPDQFHZLWK DVOHHSGXULQJWKHWULDO7KHUHFRUGLVXQFOHDUDVWRZKHWKHUWKH UHVSHFWWRWKHVHQWHQFLQJSKDVHRI0DVRQjVWULDOZHUHPDQG MXURU VOHSW GXULQJ SURFHHGLQJV LQ WKH FRXUWURRP RU GXULQJ WKHFDVHWRWKHGLVWULFWFRXUWIRUDQHYLGHQWLDU\KHDULQJRQWKLV EUHDNVLQWKHMXU\URRP+RZHYHU6WUDXEDYHUUHGWKDWVKH LVVXH mZDVDZDNHDQGDWWHQWLYHGXULQJDOOSURFHHGLQJVRIWKHWULDOl s$DW6WUDXE$IIDWˆ7KHWULDOFRXUWPDGHWKH VDPHILQGLQJZLWKUHVSHFWWRDOOWZHOYHMXURUV$EVHQWFOHDU DQGFRQYLQFLQJHYLGHQFHWRWKHFRQWUDU\ZHPXVWGHIHUWRWKH  sXGJH %RJJV VXJJHVWV WKDW 0DVRQ GRHV QRW PHHW WKH UHTXLUHPHQWV VWDWHFRXUWjVIDFWXDOILQGLQJDQGWKHUHIRUHGHQ\KDEHDVUHOLHI IRU DQ HYLGHQWLDU\ KHDULQJ DV ODLG RXW LQ  86& † H  $OWKRXJK ZLWKUHVSHFWWRWKLVFODLP VXEVHFWLRQ H jV FRQGLWLRQV DUH LQGHHG RQHURXV mRQO\ D SULVRQHU ZKR KDV QHJOHFWHG KLV ULJKWV LQ VWDWH FRXUW QHHG VDWLVI\ WKHVH FRQGLWLRQVl 0LFKDHO :LOOLDPV Y 7D\ORU  86    ,Q GHWHUPLQLQJ ZKHWKHU † H  DSSOLHV WKH TXHVWLRQ LV QRW ZKHWKHU WKH SHWLWLRQHU KDV VXFFHHGHG LQ GHYHORSLQJ WKH UHFRUG EXW ZKHWKHU WKH SHWLWLRQHU KDV  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

LPSDLU 0DVRQjV DELOLW\ WR UHFHLYH D IDLU WULDO  :H PXVW :H EHJLQ RXU DQDO\VLV RI 0DVRQjV LQHIIHFWLYH DVVLVWDQFH SUHVXPH WKDW WKH WULDO FRXUWjV IDFWXDO GHWHUPLQDWLRQV DUH FODLPE\UHYLHZLQJWKHLQYHVWLJDWLRQWKDWDSSDUHQWO\GLGWDNH FRUUHFWXQOHVV0DVRQUHEXWVWKDWSUHVXPSWLRQZLWKFOHDUDQG SODFH,QWKHIDOORIVRRQDIWHU0DVRQZDVFKDUJHGZLWK FRQYLQFLQJHYLGHQFH WKH UDSH DQG DJJUDYDWHG PXUGHU RI 5RELQ WKH WULDO FRXUW LVVXHGDQRUGHUDSSRLQWLQJDQLQYHVWLJDWRUIRUWKHGHIHQVHDQG 5DFLDO6OXUV DXWKRUL]LQJ LQGHSHQGHQW '1$ WHVWLQJ  s$ DW  $FFRUGLQJWRWKH2KLR6XSUHPH&RXUW 0DVRQDUJXHVWKDWKHZDVGHQLHGDIDLUWULDOEHFDXVHRIWKH UDFLDOSUHMXGLFHRIDQDOOZKLWHMXU\ZKLFKPDQLIHVWHGLWVHOI 7KH GHIHQVH WHDP RI WZR ODZ\HUV DQG DQ LQYHVWLJDWRU WKURXJK  JHQHUDOL]DWLRQV DERXW UDFH DQG WKH XVH RI EODFN ORRNHGIXOO\LQWR0DVRQjVEDFNJURXQG0RUHRYHUWKH VODQJ   ,QGLYLGXDO MXURUV ZHUH GLVWXUEHG E\ WKH UDFLVW VWDWHKDGFROOHFWHGDQGUHOHDVHGWRWKHGHIHQVHLQsDQXDU\ FRPPHQWVEXWDSSDUHQWO\GLGQRWXQGHUVWDQGWKDWWKH\FRXOG YROXPLQRXVUHFRUGVFRQFHUQLQJ0DVRQLQFOXGLQJ GR DQ\WKLQJ DERXW LW  $IWHU UHYLHZLQJ WKH DIILGDYLWV RI DOO UHFRUGVDERXWKLVODVWQLQH\HDUVLQDQGRXWRISULVRQDV WZHOYHMXURUVDQGKHDULQJWHVWLPRQ\IURPWKHFRXUWEDLOLII ZHOODVVFKRROUHFRUGVDQGMXYHQLOHLQFDUFHUDWLRQV WKUHHMXURUVDQGDQDOWHUQDWHMXURUWKHWULDOFRXUWIRXQGWKDW m>D@WQRWLPHGXULQJWKHWULDOGLGDQ\RIWKHMXURUVSDUWLFLSDWH 0DVRQ1(GDW7KHUHFRUGKRZHYHUVXJJHVWV LQDQ\DFWVRIUDFLVPZKLFKFRXOGKDYHLPSDLUHG>0DVRQjV@ WKDWWKHLQYHVWLJDWRUjVDVVLJQPHQWZDVOLPLWHGWRLQWHUYLHZLQJ DELOLW\WRUHFHLYHDIDLUWULDOls$DW ZLWQHVVHVDQGWDNLQJPHDVXUHPHQWVDWWKHFULPHVFHQH7UDW   %HFDXVH WKH FDVH DJDLQVW 0DVRQ ZDV EDVHG RQ 7KH TXHVWLRQ RQ KDEHDV LV ZKHWKHU 0DVRQ FDQ UHEXW WKH FLUFXPVWDQWLDO HYLGHQFH ZH LQIHU IURP WKH UHFRUG WKDW WKH SUHVXPSWLRQWKDWWKHVWDWHFRXUWjVIDFWXDOILQGLQJVDUHFRUUHFW ZLWQHVVLQWHUYLHZVZHUHSULPDULO\DERXWWKHIDFWVVXUURXQGLQJ $OWHUQDWHMXURU0DU\%HFNKROWm%HFNKROWlWHVWLILHGWKDWWKH 5RELQjV GLVDSSHDUDQFH DQG PXUGHU  'HIHQVH FRXQVHO UDFLVWFRPPHQWVLQKHURSLQLRQFRXOGKDYHYLRODWHG0DVRQjV LQGLFDWHGDVPXFKZKHQWKHWULDOFRXUWDVNHGZK\DPLWLJDWLRQ ULJKWWRDIDLUWULDOm,IHOWLWZDVXQIDLU,IHOWLWZDVZURQJ H[SHUW ZDV QHFHVVDU\ JLYHQ WKH DSSRLQWPHQW RI DQ LQYHVWLJDWRU7UDW)XUWKHUPRUH0DVRQDYHUUHGWKDWKLV FRQYHUVDWLRQVZLWKGHIHQVHFRXQVHODQGWKHLQYHVWLJDWRUmZHUH  $OWHUQDWH MXURU 0DU\ %HFNKROW WHVWLILHG WR MXURUVj FRPPHQWV GXULQJ WKH WULDO WKDW mDOO EODFN SHRSOH GLG ZDV GULQN DQG SDUW\ DQG GR EHHU UXQVl s$ DW  GLOLJHQWO\ DWWHPSWHG WR GR VR 6HH 0 :LOOLDPV  86 DW  m>$@ IDLOXUH WR GHYHORS WKH IDFWXDO EDVLV RI D FODLP LV QRW HVWDEOLVKHG XQOHVV  0DVRQ DSSDUHQWO\ ZHDUV D mGHZ UDJl RU EDQGDQD RQ D GDLO\ EDVLV WKHUH LV ODFN RI GLOLJHQFH RU VRPH JUHDWHU IDXOW DWWULEXWDEOH WR WKH SULVRQHU s$ DW  sXURU .DWK\ +DQH\ WHVWLILHG WKDW D MXURU PDGH mUDFLVW UHPDUNV RU WKH SULVRQHUjV FRXQVHOl 0DVRQ KHUH KDV EHHQ VXIILFLHQWO\ GLOLJHQW DQG >WDONHG@ LQ D MLYH PDQQHUl DERXW mGHZ UDJVl DV ZHOO DV ULGLFXOHG DV WKH 6XSUHPH &RXUW H[SODLQHG m'LOLJHQFH ZLOO UHTXLUH LQ WKH XVXDO FDVH 0DVRQjV VSHHFK s$ DW  sXURU sDVRQ 0DKDIIH\ m0DKDIIH\l WKDW WKH SULVRQHU DW D PLQLPXP VHHN DQ HYLGHQWLDU\ KHDULQJ LQ VWDWH FRXUW WHVWLILHG WKDW WKH VDPH MXURU KDG mVDLG KH KDG WR JR JHW KLV GHZ UDJ FDXVH LQ WKH PDQQHU SUHVFULEHG E\ VWDWH ODZl ,G DW  0DVRQ UHTXHVWHG DQG KH GRHVQjW KDYH D KDW KH MXVW KDV D GHZ UDJl s$ DW  +RZHYHU ZDV GHQLHG D KHDULQJ LQ VWDWH FRXUW DQG KDV DFWLYHO\ VRXJKW WR H[SDQG WKH 0DKDIIH\ GLG QRW FKDUDFWHUL]H WKH FRPPHQW DV mUDFLDOl s$ DW  UHFRUG :H VHH QR ODFN RI GLOLJHQFH VR ZH GR QRW DSSO\ † H 

  7KH SURVHFXWRU DQG GHIHQVH FRXQVHO REWDLQHG WKHVH DIILGDYLWV 7KH WULDO FRXUW ODWHU DXWKRUL]HG LQGHSHQGHQW ODERUDWRU\ WHVWLQJ RQ D ZLWKRXW FRQVXOWLQJ WKH WULDO FRXUW 7KH MRLQW DSSHQGL[ FRQWDLQV WKH VDPSOH RI WKH IHWXV WKDW 5RELQ ZDV FDUU\LQJ DW WKH WLPH RI KHU PXUGHU DQG DIILGDYLWV RI WHQ MXURUV ZKR GHQLHG SDUWLFLSDWLQJ LQ RU REVHUYLQJ DQ\ LQGHSHQGHQW EORRG WHVWLQJ RI WKH EORRG IRXQG RQ 0DVRQjV VKRH s$ DW UDFLVP   0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

DOPRVW H[FOXVLYHO\ DERXW WULDO SKDVH LVVXHV n FRQFHUQLQJ *sXURU%LDV0LVFRQGXFW ZLWQHVVHVP\ZKHUHDERXWV&KULV'HQQLVDQGRWKHUWKHRULHV RIZKRKDGNLOOHG5RELQ'HQQLVl0DXULFH$0DVRQ$IIDW 7KH6L[WKDQG)RXUWHHQWK$PHQGPHQWVWRWKH&RQVWLWXWLRQ ˆ   0DVRQjV IDPLO\ PHPEHUV ZHUH DOVR QRW LQWHUYLHZHG JXDUDQWHHDFULPLQDOGHIHQGDQWWKHULJKWWRDQLPSDUWLDOMXU\ DERXW0DVRQjVEDFNJURXQGs$DW7HUUL$0DVRQ 0RUJDQY,OOLQRLV868QGHUFOHDUO\ $IIDWˆs$DWsDPHV0LFKDHO0DVRQ$IIDWˆ HVWDEOLVKHG 6XSUHPH &RXUW SUHFHGHQW D GHIHQGDQW ZKR s$DW0LRVKL0DVRQ$IIDWˆˆ DOOHJHVLPSOLHGMXURUELDVLVHQWLWOHGWRDKHDULQJLQZKLFKKH KDVmWKHRSSRUWXQLW\WRSURYHDFWXDOELDVl6PLWKY3KLOOLSV $VIRUWKHGRFXPHQWVREWDLQHGGXULQJGLVFRYHU\WKHWULDO 86'HQQLVY8QLWHG6WDWHV86 FRXUWIRXQGWKDWGHIHQVHFRXQVHOmKDGLQWKHLUSRVVHVVLRQDQG     +RZHYHU SXUVXDQW WR 2KLR 5XOH RI KDG UHYLHZHG SULRU WR WULDO RYHU  SDJHV RI (YLGHQFH % HYLGHQFH RI VWDWHPHQWV PDGH GXULQJ WKH FRPSUHKHQVLYHUHFRUGVDQGGRFXPHQWVUHJDUGLQJ>0DVRQ@jV FRXUVH RI MXU\ GHOLEHUDWLRQV LV QRW DGPLVVLEOH D UXOH LQ VRFLDO KLVWRU\ LQFOXGLQJ UHFRUGV IURP WKH 0DULRQ &LW\ NHHSLQJZLWKWKHJHQHUDOWKHRU\WKDWMXURUVDUHLQFRPSHWHQW 6FKRROV 0DULRQ $UHD &RXQVHOLQJ &HQWHU 0DULRQ &RXQW\ ZLWQHVVHVRIWKHLURZQPLVFRQGXFW$MXURUPD\WHVWLI\DERXW &KLOGUHQjV 6HUYLFHV 0DULRQ &RXQW\ $GXOW 3UREDWLRQ mH[WUDQHRXVSUHMXGLFLDOLQIRUPDWLRQlRUmRXWVLGHLQIOXHQFHl 'HSDUWPHQW $GXOW 3DUROH $XWKRULW\ DQG 2KLR 'HSW RI ,G:HUHFHQWO\KHOGWKDWWKH2KLRFRXUWVjDSSOLFDWLRQRIWKLV 5HKDELOLWDWLRQDQG&RUUHFWLRQVl6WDWHY0DVRQ1R&5 VWDWXWH WR GLVSRVH RI ELDVHG MXU\ FODLPV YLRODWHG FOHDUO\  VOLS RS DW  2KLR &W &RP 3O 1RY   HVWDEOLVKHG 6XSUHPH &RXUW SUHFHGHQW WKDW UHFRJQL]HV WKH 1RQHRIWKHVHGRFXPHQWVLVLQWKHUHFRUGEHIRUHXV IXQGDPHQWDOLPSRUWDQFHRIDGHIHQGDQWjVFRQVWLWXWLRQDOULJKW WRDIDLUWULDO'RDQY%ULJDQR)GWK&LU ,Q0D\EHIRUHWKLVFDVHZHQWWRWULDOWKHWULDOFRXUW ,Q'RDQZHFRQFOXGHGWKDWDMXURUjVSUHVHQWDWLRQRI DSSRLQWHG'U6SDUHDQGDIRUHQVLFSDWKRORJLVWWRDVVLVWWKH DQRXWRIFRXUWH[SHULPHQWWRRWKHUMXURUVZDVFRQVWLWXWLRQDO GHIHQVHs$DW'U6SDUHWKHQH[DPLQHG0DVRQDQG HUURUEXWWKDWWKLVHUURUZDVKDUPOHVV,GDW SUHSDUHG D ILYHSDJH SV\FKLDWULF UHSRUW  s$ DW   2Q sXQHGXULQJWKHWULDOGHIHQVHFRXQVHOGHSRVHG'U ,QWKLVFDVH0DVRQDOOHJHVWKDWMXURUELDVRUPLVFRQGXFW 6SDUHRQYLGHRWDSHXVLQJWZHOYHPLWLJDWLRQH[KLELWV7KHVH UHVXOWHG ZKHQ YDULRXV MXURUV  PDGH UDFLDO VOXUV H[KLELWVDFFRUGLQJWRWKHUHFRUGDVLWVWDQGVDSSHDUWRKDYH  SUHVXPHG 0DVRQjV JXLOW  VOHSW GXULQJ WULDO DQG EHHQ EDVHG ODUJHO\ RQ WKH GLVFRYHU\ SURYLGHG E\ WKH  FRQGXFWHG DQG WKHQ SUHVHQWHG DQ RXWRIFRXUW SURVHFXWLRQ WR GHIHQVH FRXQVHO  $V QRWHG DERYH GHIHQVH LQYHVWLJDWLRQ7KHILUVWWKUHHLQYROYHLQWHUQDOLQIOXHQFHVDQG XQGHU 7DQQHU Y 8QLWHG 6WDWHV  86   WHVWLPRQ\RQWKRVHVXEMHFWVVKRXOGKDYHEHHQEDUUHGE\WKH HYLGHQWLDU\ UXOH SURKLELWLQJ MXURU LPSHDFKPHQW RI D MXU\  /HDG FRXQVHO DFNQRZOHGJHG OHVV WKDQ D ZHHN EHIRUH WKH WULDO EHJDQ YHUGLFW,GDWFI8QLWHG6WDWHVY/RJDQ)G mWKDW KH KDG QRW SHUVRQDOO\ LQWHUYLHZHG DQ\ RI WKH ZLWQHVVHV IRU HLWKHU  Q WK &LU UHFRJQL]LQJ WKH GLIIHUHQFH LQ KRZ WKH SKDVH RI WKH WULDOl s$ DW   +HDG $II DW ˆˆ   0RUHRYHU 'RDQDQG/RJDQSDQHOVIUDPHGWKHLVVXHFHUWGHQLHG FRXQVHO DSSDUHQWO\ QHYHU VWXGLHG 0DVRQjV mSV\FKRORJLFDO RU HQYLURQPHQWDO KLVWRU\l DQG IDLOHG WR SUHSDUH WKH mVRFLDO KLVWRU\l WKDW 86    +RZHYHU XQGHU 'RDQ WKH TXHVWLRQ LV ZRXOG KDYH KXPDQL]HG 0DVRQ EHIRUH WKH MXU\ s$ DW  6FKXPDFKHU ZKHWKHU 0DVRQ UHFHLYHG D IDLU WULDO  0DVRQ GLG KDYH DQ $II DW ˆˆ & ( RSSRUWXQLW\WR SURYHDFWXDOELDVZKHQWKHWULDOFRXUWKHDUG RUDODUJXPHQWVRQKLVPRWLRQIRUDQHZWULDO7KHWULDOFRXUW  $OWKRXJK WKH WULDO FRXUW RUGHUHG WKH UHWHQWLRQ RI WKHVH H[KLELWV DV GHQLHGWKHPRWLRQILQGLQJWKDWWKHMXURUVjFRQGXFWGLGQRW SDUW RI WKH UHFRUG WKH H[KLELWV DUH QRW LQ WKH UHFRUG EHIRUH XV  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

LPSURSHUO\  0DVRQ  1(G DW   0DVRQ KDV WKXV FRXQVHO DSSDUHQWO\ QHYHU LQWHUYLHZHG DQ\RQH LQFOXGLQJ ZDLYHGWKHULJKWWRIHGHUDOKDEHDVUHYLHZRQDOOEXWRQHRIKLV 0DVRQKLPVHOIDERXWSRVVLEOHPLWLJDWLQJDVSHFWVRI0DVRQjV SURVHFXWRULDOPLVFRQGXFWFODLPVXQOHVVKHFDQGHPRQVWUDWH EDFNJURXQGHYHQWKRXJKYDULRXVIDPLO\PHPEHUVZHUHUHDG\ FDXVHDQGSUHMXGLFH RU PDNHmDVKRZLQJRIDIXQGDPHQWDO DQGZLOOLQJWRGLVFXVVKLVOLIHKLVWRU\ PLVFDUULDJH RI MXVWLFHl  +LQNOH  )G DW  TXRWLQJ 6LPSVRQ)GDW $OWKRXJKWKH2KLR6XSUHPH&RXUWGLGQRWPDNHDQH[SOLFLW ILQGLQJ DERXW WKH H[WHQW RI GHIHQVH FRXQVHOjV LQGHSHQGHQW 0DVRQ DUJXHV WKDW mWKH SURVHFXWRU HQJDJHG LQ RQJRLQJ LQYHVWLJDWLRQ RI PLWLJDWLQJ HYLGHQFH LW GLG FRQFOXGH WKDW PLVFRQGXFWl GXULQJ FURVVH[DPLQDWLRQ E\ mDWWDFNLQJ GHIHQVH FRXQVHO LQ FKRRVLQJ QRW WR SUHVHQW ZKDWHYHU FRXQVHOjV GHIHQVH VWUDWHJLHV>@ RYHU ZKLFK 0DVRQ KDG QR PLWLJDWLQJHYLGHQFHZDVNQRZQPDGHDVWUDWHJLFGHFLVLRQWR FRQWUROl  3HWLWLRQHUjV %U DW   2QH RI WKH SURVHFXWRUjV IRUHFORVH WKH VWDWH IURP LQWURGXFLQJ QHJDWLYH HYLGHQFH LQ TXHVWLRQVFRQFHUQHG0DVRQjVH[WUDPDULWDOUHODWLRQVKLSZLWK UHEXWWDO  0DVRQ  1(G DW   8QGHU 6WULFNODQG 5RELQm,VWKDWWKHVDPHUHDVRQWKDWZKHQWKLVFDVHVWDUWHGLQ KRZHYHU FRXUWV PXVW ILUVW GHWHUPLQH ZKHWKHU GHIHQVH RUGHUWRFRQWHVWWKH'1$UHVXOWV\RXKDG\RXUDWWRUQH\VGR FRXQVHOjVLQYHVWLJDWLRQGHFLVLRQVZHUHUHDVRQDEOH2QO\WKHQ LQGHSHQGHQWWHVWLQJWRVHHLIRXU'1$UHVXOWVZHUHULJKW"l PD\ WKH\ UHMHFW D GHIHQGDQWjV FKDOOHQJH WR DQ\ GHFLVLRQ s$DW'HIHQVHFRXQVHOUDLVHGDQREMHFWLRQZKLFKWKH FKDUDFWHUL]HGDVVWUDWHJLFE\GHIHQVHFRXQVHO WULDOFRXUWRYHUUXOHG:HDJUHHZLWKWKHGLVWULFWFRXUWWKDWWKLV TXHVWLRQ ZDV QRW LPSURSHU  7KH FUHGLELOLW\ RI D FULPLQDO +DGWULDOFRXQVHOFRQGXFWHGDQDGHTXDWHLQYHVWLJDWLRQWKH GHIHQGDQWZKRWHVWLILHVPD\EHLPSHDFKHGOLNHWKDWRIDQ\ MXU\ZRXOGKDYHKHDUGVXEVWDQWLDOHYLGHQFHDERXWKRZGUXJ RWKHUZLWQHVV*UHHU)GDW7KHTXHVWLRQDERXW XVH DQG YLROHQFH SHUYDGHG 0DVRQjV EDFNJURXQG DQG OLIH 0DVRQjV UHDVRQ IRU FRQGXFWLQJ LQGHSHQGHQW '1$ WHVWLQJ KLVWRU\)URPWKHUHFRUGEHIRUHXVZHKDYHOHDUQHGWKDW IROORZHG KLV WHVWLPRQ\ DERXW D VWDWHPHQW WR WKH SROLFH LQ 0DVRQjVDOFRKROLFSDUHQWVZHUHKHDY\PDULMXDQDXVHUVDQG ZKLFKKHGHQLHGNQRZLQJ5RELQRUHYHUEHLQJDORQHZLWKKHU GUXJGHDOHUVIURPWKHWLPH0DVRQZDVIRXURUILYH\HDUVROG 7KH SURVHFXWRU ZDV WKXV LPSHDFKLQJ 0DVRQ E\ VKRZLQJ ,QGHHG 0DVRQjVPRWKHUDGPLWWHGmWKDWIRUWKHPDMRULW\RI LQFRQVLVWHQFLHVEHWZHHQKLVSUHWULDOVWDWHPHQWWRWKHSROLFH DQGKLVWHVWLPRQ\DWWULDO  0DVRQDUJXHVRQDSSHDOWKDWDQRWKHUTXHVWLRQSHUWDLQLQJWR 7KLV IDFW GLVWLQJXLVKHV WKLV FDVH IURP 0DUWLQ Y 0LWFKHOO 1RV  KLVIDLOXUHWRSURGXFHUHFRUGVWKDWVKRZHGKLVHPSOR\PHQWDW    :/  WK &LU )HE   ZKHUH ZH

WKH ORFDO IHVWLYDO ZKHUH KH PHW 5RELQ GHPRQVWUDWHV UHFHQWO\ GHQLHG KDEHDV UHOLHI RQ D VLPLODU FODLP EHFDXVH WKH SHWLWLRQHU KDG QRW VKRZQ ZKDW SRWHQWLDO PLWLJDWLQJ ZLWQHVVHV mZRXOG KDYH WHVWLILHG WR PLVFRQGXFWDVGRWKHSURVHFXWRUjVmULGLFXO>LQJ@HDFKRIWKH RU KRZ VXFK WHVWLPRQ\ FRXOG KDYH DLGHG KLP DW VHQWHQFLQJl ,G DW  GHIHQVHWKHRULHVlGXULQJKLVFORVLQJDUJXPHQWIRUWKHOLDELOLW\ FI %XHOO Y 0LWFKHOO  )G   WK &LU  7KH WHVWLPRQ\ LQ SKDVH3HWLWLRQHUjV%UDWDQGKLVFORVLQJDUJXPHQWIRU WKLV FDVH FRQFHUQHG 0DVRQjV WURXEOHG FKLOGKRRG DV GHVFULEHG EHORZ WKHSHQDOW\SKDVH:HILUVWQRWHWKDWGHIHQVHFRXQVHOPDGHQR ZKLFK ZRXOG KDYH DLGHG KLP DW VHQWHQFLQJ EHFDXVH LW GLG QRW JLYH WKH

FRQWHPSRUDQHRXV REMHFWLRQV  7KH 2KLR 6XSUHPH &RXUW SURVHFXWRU WKH VDPH RSSRUWXQLW\ IRU UHEXWWDO WKDW HYLGHQFH DERXW JRRG FKDUDFWHU RU UHKDELOLWDWLRQ SRWHQWLDO FRXOG KDYH UHYLHZHG IRU SODLQ HUURU 0DVRQ  1(G DW  WKXV EDUULQJIHGHUDOKDEHDVUHYLHZDEVHQWDVKRZLQJRIFDXVHDQG  $IILGDYLWV ZHUH VXEPLWWHG E\  sDPHV )UHGHULFN &UDWHV SUHMXGLFH:HDUHQRWSHUVXDGHGWKDW0DVRQKDVVKRZQFDXVH m&UDWHVl D PLWLJDWLRQ VSHFLDOLVW ZKR ZDV UHWDLQHG E\ SRVWFRQYLFWLRQ DQGSUHMXGLFHWRH[FXVHWKHSURFHGXUDOGHIDXOWDQGWKHUHIRUH FRXQVHO DQG ZKR LQWHUYLHZHG 0DVRQjV PRWKHU EHIRUH KHU GHDWK  'U GHQ\KDEHDVUHOLHIZLWKUHVSHFWWRWKLVFODLP sHIIUH\ / 6PDOOGRQ m6PDOOGRQl D SV\FKRORJLVW  0DVRQjV IDWKHU DQG  0DVRQjV VLVWHU  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

>0DVRQ@jVOLIHWKHIDPLO\KRPHZDVDµGUXJKRXVHjls$DW UHTXLUHUHYHUVDO%R\OHY0LOOLRQ)GWK&LU &UDWHV$IIDWˆ6)RXU\HDUVODWHU0DVRQEHJDQWR :HKDYHSUHYLRXVO\LGHQWLILHGIRXUIDFWRUVWKDWDUH H[SHULPHQWZLWKGUXJVVWHDOLQJPDULMXDQDDQGSLOOVIURPKLV UHOHYDQWLQDQDO\]LQJDFODLPRISURVHFXWRULDOPLVFRQGXFW SDUHQWVjVXSSO\IRUKLVRZQXVHE\DJHHOHYHQKHKDGEHFRPH D VLJQLILFDQW XVHU KLPVHOI  $ERXW WKLV WLPH 0DVRQ ,Q HYHU\ FDVH ZH FRQVLGHU WKH GHJUHH WR ZKLFK WKH DFFRPSDQLHGKLVIDWKHURQWULSVRXWRIVWDWHWREX\GUXJV%\ UHPDUNVFRPSODLQHGRIKDYHDWHQGHQF\WRPLVOHDGWKH DJHIRXUWHHQ0DVRQEHJDQWRXVHGUXJVZLWKKLVSDUHQWVKH MXU\ DQG WR SUHMXGLFH WKH DFFXVHG ZKHWKHU WKH\ DUH DOVR UDQ DZD\ IURP KRPH  ,Q DGGLWLRQ WR GUXJV YLROHQFH LVRODWHGRUH[WHQVLYHZKHWKHUWKH\ZHUHGHOLEHUDWHO\RU RYHUUDQ WKH 0DVRQ KRXVHKROG  0DVRQjV SDUHQWV VWUXJJOHG DFFLGHQWDOO\SODFHGEHIRUHWKHMXU\>@DQGWKHVWUHQJWKRI WKURXJKUHSHDWHGERXWVRIGRPHVWLFYLROHQFHLQIURQWRIWKHLU WKHFRPSHWHQWSURRIWRHVWDEOLVKWKHJXLOWRIWKHDFFXVHG FKLOGUHQWKH\DOVREHDW0DVRQRQDUHJXODUEDVLVIRUVWHDOLQJ WKHLUGUXJVDQGIRUWKHPLVFRQGXFWRIKLVVLEOLQJVIRUZKLFK +LOOY%ULJDQR)GWK&LUTXRWDWLRQ KHZDVEODPHG RPLWWHG:HUHYLHZDSURVHFXWRULDOPLVFRQGXFWFODLPIRU KDUPOHVVHUURU,G +DYLQJUHFHLYHGRIILFLDOGRFXPHQWVIURPWKHSURVHFXWLRQ GXULQJGLVFRYHU\WULDOFRXQVHODSSHDUVWRKDYHEHHQDZDUHRI :H ILUVW QRWH RXU SUHYLRXV KROGLQJ mWKDW 2KLRjV VRPHRIWKLVHYLGHQFH0LWLJDWLRQ([KLELWIRUH[DPSOH FRQWHPSRUDQHRXVREMHFWLRQUXOHFRQVWLWXWHVDQDGHTXDWHDQG DSSDUHQWO\ FRQFHUQHG 0DVRQjV GUXJ XVH DV D WHHQDJHU VHH LQGHSHQGHQW VWDWH JURXQG WKDW EDUV IHGHUDO KDEHDV UHYLHZ 0DVRQ1R&5VOLSRSDWEXWQRWKLVVLJQLILFDQW DEVHQWDVKRZLQJRIFDXVHDQGSUHMXGLFHl+LQNOHY5DQGOH XVHDWDPXFKHDUOLHUDJH:HHPSKDVL]HWKDWWKHGLVFRYHU\ )GWK&LUm0RUHRYHUZHYLHZD GRFXPHQWV E\ WKHLU YHU\ QDWXUH RQO\ FRQFHUQHG WKH 0DVRQ VWDWH DSSHOODWH FRXUWjV UHYLHZ IRU SODLQ HUURU DV WKH IDPLO\jVOLPLWHGFRQWDFWVZLWKWKHDXWKRULWLHV)RUH[DPSOH HQIRUFHPHQWRIDSURFHGXUDOGHIDXOWl,Gm,QGHWHUPLQLQJ DUHFRUGIURP0DULRQ&RXQW\&KLOGUHQjV6HUYLFHVLQGLFDWHV ZKHWKHUVWDWHFRXUWVKDYHUHOLHGRQDSURFHGXUDOUXOHWREDU WKDW 0DVRQjV IDWKHU ZDV FKDUJHG ZLWK DVVDXOW LQ  IRU UHYLHZRIDFODLPZHORRNWRWKHODVWUHDVRQHGRSLQLRQRIWKH EHDWLQJ0DVRQs$DW&UDWHV$IIDWˆ:7KLV VWDWH FRXUWV DQG SUHVXPH WKDW ODWHU FRXUWV HQIRUFHG WKH EDU FKDUJHKRZHYHUVWHPPHGIURPDPLVVLQJSHUVRQUHSRUWWKDW LQVWHDGRIUHMHFWLQJWKH GHIDXOWHGFODLPRQLWVPHULWVl,G 0DVRQjVIDWKHUKLPVHOIILOHGZLWKWKHSROLFH0DVRQKDGUXQ FLWLQJ:@HGLGQjWZDQW WRPRVWRIWKHDOOHJHGLQVWDQFHVRISURVHFXWRULDOPLVFRQGXFW WKHPDURXQGls$DW&UDWHV$IIDWˆ+0DVRQjV 7KHUHIRUH LQ WKH ODVW UHDVRQHG RSLQLRQ E\ D VWDWH FRXUW PRWKHUDOVRGLGQRWJRWRWKHKRVSLWDOZKHUHVRFLDOVHUYLFHV UHYLHZLQJWKHVHFODLPVWKH2KLR6XSUHPH&RXUWH[SUHVVO\ PD\ KDYH LQWHUYHQHG DQG GRFXPHQWHG WKH 0DVRQ IDPLO\jV HQIRUFHG 2KLRjV FRQWHPSRUDQHRXV REMHFWLRQ UXOH DQG SOLJKW UHYLHZHGIRUSODLQHUURU0DVRQ1(GDW

7KHUHIRUHWKHGRFXPHQWVSURYLGHGE\WKHSURVHFXWLRQWR 'HIHQVH FRXQVHO GLG REMHFW WR D TXHVWLRQ DERXW '1$ GHIHQVHFRXQVHOFRXOGQRWKDYHFRQWDLQHGDQ\WKLQJFORVHWR WHVWLQJ  $GGUHVVLQJ WKLV FODLP RQ WKH PHULWV WKH 2KLR 6XSUHPH &RXUW KHOG WKDW WKH SURVHFXWRU KDG QRW DFWHG  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

WULDOFRXUWKDGDOORZHG0DVRQmWRSUHVHQWVRPHHYLGHQFHWKDW WKHDPRXQWRIPLWLJDWLQJHYLGHQFHWKDWFRXOGKDYHEHHQDQG WHQGHG WR VKRZ WKH FULPLQDO SURSHQVLW\ RI &KULV 'HQQLVl ODWHU ZDV REWDLQHG LQ DQ LQGHSHQGHQW DQG WKRURXJK LQFOXGLQJWHVWLPRQ\DERXWWZRLQFLGHQWVZKHQ&KULVVWUXFN LQYHVWLJDWLRQ,QGHHGZHILQGLWSDUWLFXODUO\WHOOLQJWKDWQRW 5RELQLQWKHIDFH,G HYHQWKHWULDOFRXUWUHIHUUHGWRDQ\NQRZOHGJHRQWKHSDUWRI WULDOFRXQVHODERXW0DVRQjVWURXEOHGFKLOGKRRGRUWKHH[WHQW :HUHFHQWO\FRQVLGHUHGWKH&RQIURQWDWLRQ&ODXVHLQ%RJJV WRZKLFKGUXJVDQGYLROHQFHUDYDJHG0DVRQDQGKLVIDPLO\ Y&ROOLQV )GWK&LUFHUWGHQLHG :HEHOLHYHWKDWLWZDVMXVWWKLVHYLGHQFHZKLFKGLGQRWHQWHU 86$OWKRXJKWKDWFDVHZDVGHFLGHGXQGHUSUH WKHUHFRUGXQWLOWKHSRVWFRQYLFWLRQVWDJHWKDWZDV0DVRQjV $('3$ VWDQGDUGV LW LV VWLOO LQVWUXFWLYH  7KH %RJJV FRXUW EHVWKRSH$VZHREVHUYHGLQ0DSHVY&R\OH)G QRWHGWKDWFRXUWVKDGIRXQG&RQIURQWDWLRQ&ODXVHYLRODWLRQV WK&LUFHUWGHQLHG86WKHLQIRUPDWLRQ ZKHQGHIHQVHFRXQVHOKDGDGYDQFHGmDQDUWLFXODWHG WKHRU\ DERXW0DVRQjVEDFNJURXQGPD\DPRXQWWROLWWOHPRUHWKDQ WKDWDZLWQHVVKDGDPRWLYHWRIDEULFDWHl,GDW7KH mVOLPHYLGHQFHRIPLWLJDWLRQEXWLWLVVRPHWKLQJ$QGZKDW UHFRUGLQWKLVFDVHWRWKHH[WHQWWKDW0DVRQjVDWWRUQH\VEDVHG LV PRVW LPSRUWDQW LW ZDV >KLV@ RQO\ VKLHOG IURP D GHDWK WKHGHIHQVHRQUHVLGXDOGRXEWRQO\EDUHO\VXJJHVWVWKDWWKH\ VHQWHQFHl,GDWW@KURXJKRXW WKH WULDO DQG SHQDOW\ SKDVHV WKH SURVHFXWRU HQJDJHG LQ HJUHJLRXV PLVFRQGXFW  GHVLJQHGWRSUHMXGLFH0DVRQDQGWRLQIODPHWKHSDVVLRQVRI :H ILQG LQH[SOLFDEOH WKH DSSDUHQW IDLOXUH RI WULDO FRXQVHO WR LQYHVWLJDWH PLWLJDWLQJ HYLGHQFH LQ WKLV FDVH )RXU PRQWKV EHIRUH WULDO WKH WKHMXU\WKXVGHSULYLQJ0DVRQRIGXHSURFHVVDQGDIDLUWULDOl WULDO FRXUW KHDUG RUDO DUJXPHQW RQ GHIHQVH FRXQVHOjV UHTXHVW IRU YDULRXV 3HWLWLRQHUjV %U DW   7KH UHOHYDQW TXHVWLRQ LQ FDVHV RI H[SHUWV LQFOXGLQJ mD PLWLJDWLRQ H[SHUW WHDP RI 3V\FKRORJLVW 6RFLDO DOOHJHGSURVHFXWRULDOPLVFRQGXFWLVmZKHWKHUWKHSURVHFXWRUVj :RUNHU DQG 0LWLJDWLRQ ([SHUWl 7U DW  'HIHQVH FRXQVHO FDOOHG 'DOH FRPPHQWVµVRLQIHFWHGWKHWULDOZLWKXQIDLUQHVVDVWRPDNHWKH $ %DLFK m%DLFKl WKHQ DQ DVVLVWDQW SXEOLF GHIHQGHU IRU WKH 6WDWH RI UHVXOWLQJ FRQYLFWLRQ D GHQLDO RI GXH SURFHVVjl  'DUGHQ Y 2KLR WR WHVWLI\ DERXW D GHIHQGDQWjV QHHG IRU PLWLJDWLRQ H[SHUWV %DLFK

:DLQZULJKW86TXRWLQJ'RQQHOO\Y GHVFULEHG WKH PLWLJDWLRQ H[SHUWjV UHVSRQVLELOLWLHV DV IROORZV 2QH VLJQLILFDQW UROH RI WKH PLWLJDWLRQ H[SHUW LV WR LQWHUYLHZ 'H&KULVWRIRUR  86      m>7@KH 0U 0DVRQ DERXW KLV EDFNJURXQG DQG WKHQ JR RXW WR LQWHUYLHZ PLVFRQGXFW PXVW EH VR SURQRXQFHG DQG SHUVLVWHQW WKDW LW IDPLO\ PHPEHUV IULHQGV DFTXDLQWDQFHV ,Q DGGLWLRQ LWjV SHUPHDWHV WKH HQWLUH DWPRVSKHUH RI WKH WULDO RU VR JURVV DV LPSRUWDQW IRU WKH PLWLJDWLRQ H[SHUW WR JDWKHU UHFRUGV WKDW PD\ EH SUREDEO\WRSUHMXGLFHWKHGHIHQGDQWl6LPSVRQYsRQHV H[LVWLQJ UHODWHG WR 0U 0DVRQ , KDYH QR LGHD DERXW 0U

)GWK&LULQWHUQDOTXRWDWLRQPDUNVDQG 0DVRQjV EDFNJURXQG EXW WKHUH PD\ EH VRPH JRYHUQPHQWDO UHFRUGV UHODWHG WR KLP WKDW ZRXOG EH KHOSIXO WR WKH GHIHQVH +LV FLWDWLRQ RPLWWHG  $ FODLPDQW PXVW HVWDEOLVK WKDW WKH VFKRRO UHFRUGV DQG ZRUN UHFRUGV PD\ EH LPSRUWDQW IRU WKH FKDOOHQJHGVWDWHPHQWZDVERWKLPSURSHUDQGVRIODJUDQWDVWR PLWLJDWLRQ SKDVH 6R LQ D VHQVH WKH PLWLJDWLRQ H[SHUW LV WKH RQH WKDW JRHV RXW  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

7KH DOOHJHG IDLOXUH RI GHIHQVH FRXQVHO WR SUHSDUH 0DVRQjV 0DVRQ0DVRQZDVDOORZHGWRSUHVHQWHYLGHQFHRIDQGWR IDPLO\ PHPEHUV IRU WKHLU WHVWLPRQ\ DW VHQWHQFLQJ IXUWKHU FURVVH[DPLQH&KULVDERXW&KULVjVKHDY\GULQNLQJDQGYLROHQW GHPRQVWUDWHV WKDW FRXQVHO FRQGXFWHG DQ LQDGHTXDWH WHQGHQFLHV LQFOXGLQJ WZR LQFLGHQWV RI ZLIHEHDWLQJ  6HH LQYHVWLJDWLRQRIPLWLJDWLQJHYLGHQFH 0DVRQ)6XSSGDW7KHWULDOFRXUWDOVRSHUPLWWHG GHIHQVHFRXQVHOWRSUHVHQWHYLGHQFHRIDQGWRFURVVH[DPLQH 7ULDO FRXQVHOj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jVKLVWRU\RIDVVDXOWVZDV SRVVLEOHPLWLJDWLRQVWUDWHJLHV,QGHHGDFFRUGLQJWR0DVRQ LQDGPLVVLEOHEHFDXVHLWZDVSURIIHUHGE\0DVRQRQO\IRUWKH WULDOFRXQVHOGLGQRWRIIHUDQ\VXFKDGYLFH SXUSRVHRIVKRZLQJWKDW&KULVDFWHGLQFRQIRUPLW\ZLWKWKH SULRUDFWVDQGZDVWKHUHIRUHOLNHO\WRKDYHPXUGHUHG5RELQ 1HLWKHU RI P\ ODZ\HUV HYHU H[SODLQHG WR PH ZKDW WKH PLWLJDWLRQWULDOLVRUZKDWLWZDVLQWHQGHGWRSURYH,KDG 0DVRQjV ILUVW &RQIURQWDWLRQ &ODXVH DUJXPHQW DSSHDUV WR QRNQRZOHGJHWKDWPLWLJDWLRQZDVLQWHQGHGWRVDYHP\ KDYH EHHQ WKDW WKH HYLGHQFH VKRXOG EH DGPLWWHG WR SURYH OLIHRUWKDWWKLVZDVWREHWKHRQO\RSSRUWXQLW\IRUPHWR LGHQWLW\'HIHQVHFRXQVHODOOHJHGWKDW&KULVKDGSUHYLRXVO\ GHPRQVWUDWHWRWKHMXU\ ZK\,VKRXOGQRWEHJLYHQWKH EHDWHQDSHUVRQDQGmOHIW>WKDWSHUVRQ@IRUGHDGLQDILHOGl GHDWKSHQDOW\ s$DWMXVWDV5RELQZDVOHIWLQDQDEDQGRQHGUXUDODUHD +RZHYHUKHDOVRDUJXHGLQWKHDOWHUQDWLYHWKDW&KULVjVYLROHQW 0DXULFH$0DVRQ$IIDWˆ7KHHYLGHQFHLQPLWLJDWLRQ DFWVVKRXOGEHDGPLWWHGmQRWDVVSHFLILFLQVWDQFHVWRLPSHDFK WKDWZDVVRUHDGLO\DYDLODEOHLQWKLVFDVHRIIHUHGDQDUJXDEO\ FUHGLELOLW\ EXW WR VKRZ SRVVLELOLW\ RI LQWHQW PRWLYH >DQG@ UHDVRQDEOH SUREDELOLW\ RI mKXPDQL]>LQJ 0DVRQ@ EHIRUH WKH VLPLODUPRGXVRSHUDQGLls$DW)LQDOO\GHIHQVH MXU\VXFKWKDWDWOHDVWRQHMXURUFRXOGKDYHIRXQGKHGLGQRW FRXQVHO ZDQWHG WR LPSHDFK &KULVjV FUHGLELOLW\ E\ VKRZLQJ GHVHUYHWKHGHDWKSHQDOW\l&DUWHU)GDW%HFDXVH mRWKHU LQFRQVLVWHQFLHV DQG ZKDW ZH EHOLHYH WR EH XQWUXWKV ZHFDQQRWGHWHUPLQHIURPWKHUHFRUGEHIRUHXVZKHWKHUWKH DQGRUOLHVls$DWVHHDOVRs$DWFRQWHQGLQJ 2KLR6XSUHPH&RXUWDSSOLHG6WULFNODQGXQUHDVRQDEO\E\QRW GXULQJRSHQLQJDUJXPHQWWKDWm&KULV'HQQLVKDVOLHGDERXW FHUWDLQDVSHFWVRIWKLVFDVHIURPWKHYHU\EHJLQQLQJl%XWVHH s$DWDUJXLQJLQ0DVRQjVEULHIWRWKH2KLR6XSUHPH DQG FRQGXFWV D FRPSOHWH IDPLO\ DQG SHUVRQDO EDFNJURXQG &RXUWWKDWm>W@KHMXU\ZDVQRWEHLQJDVNHGWRFRQVLGHUWKLV LQYHVWLJDWLRQ RQ WKH DFFXVHG HYLGHQFHDVLPSHDFKLQJl 7U DW  7ULDO FRXQVHO XQGHUVWRRG WKDW UHO\LQJ RQ WKH GRFXPHQWV SURGXFHG E\ WKH SURVHFXWLRQ ZDV LQDGHTXDWH EHFDXVH LQWHUYLHZV VWLOO KDG WR EH WDNHQ RI 0DVRQ DQG WKH mVLJQLILFDQW RWKHUV LQ KLV OLIHl DQG WKH 1HLWKHU WKH 2KLR 6XSUHPH &RXUW QRU WKH GLVWULFW FRXUW SURVHFXWLRQ FRXOG KDYH PLVVHG VRPH UHFRUGV 7U DW  7KH H[DPLQHG 0DVRQjV &RQIURQWDWLRQ &ODXVH FODLP DV VXFK SURVHFXWRU DUJXHG WKDW GHIHQVH FRXQVHO KDG EHHQ SURYLGHG ZLWK DOO KROGLQJLQVWHDGWKDWWKHHYLGHQFHZDVQRWDGPLVVLEOHXQGHU DYDLODEOH UHFRUGV DQG WKDW 0DVRQ ZDV IXOO\ DEOH WR DVVLVW LQ KLV GHIHQVH 2KLR 5XOH RI (YLGHQFH $ ZKLFK EDUV WKH XVH RI 7U DW   *LYHQ GHIHQVH FRXQVHOjV XQGHUVWDQGLQJ RI WKH QHHG SURSHQVLW\WRSURYHFRQGXFW7KH2KLR6XSUHPH&RXUWILUVW IRU IXUWKHU LQYHVWLJDWLRQ ZH VWURQJO\ EHOLHYH WKDW FRXQVHO PD\ KDYH DIIRUGHG 0DVRQ LQHIIHFWLYH DVVLVWDQFH E\ XQUHDVRQDEO\ GHFLGLQJ QRW WR UHMHFWHG0DVRQjVDUJXPHQWWKDW5XOHVKRXOGQRWDSSO\WR LQYHVWLJDWH :H OHDYH LW WR WKH GLVWULFW FRXUW LQ WKH ILUVW LQVWDQFH WR &KULVEHFDXVHKHZDVDZLWQHVVUDWKHUWKDQDGHIHQGDQWRQ GHWHUPLQH DIWHU KROGLQJ DQ HYLGHQWLDU\ KHDULQJ ZKHWKHU WKH SHUIRUPDQFH WULDO0DVRQ1(GDW,WWKHQREVHUYHGWKDWWKH RI GHIHQVH FRXQVHO LQ WKLV FDVH IDLOHG WR PHHW WKH FRQVWLWXWLRQDO PLQLPXP  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

FRQVWUDLQWKHULJKWWRSUHVHQWHYLGHQFH0DVRQFODLPVWKDWKLV H[DPLQLQJ WKH H[WHQW RI WULDO FRXQVHOjV LQYHVWLJDWLRQ LQWR ULJKWWRDIDLUWULDOVKRXOGFRQWURO PLWLJDWLQJHYLGHQFHZHUHPDQGWKHFDVHWRWKHGLVWULFWFRXUW ZLWKWKHLQVWUXFWLRQWRKROGDQHYLGHQWLDU\KHDULQJRQ0DVRQjV ,Q &KDPEHUV Y 0LVVLVVLSSL  86   WKH FODLPRILQHIIHFWLYHDVVLVWDQFHDWWKHVHQWHQFLQJSKDVHRIKLV 6XSUHPH &RXUW SURFODLPHG WKDW m>I@HZ ULJKWV DUH PRUH WULDO IXQGDPHQWDOWKDQWKDWRIDQDFFXVHGWRSUHVHQWZLWQHVVHVLQ KLVRZQGHIHQVHl,GDW7KHULJKWWRSUHVHQWZLWQHVVHV E)DLOXUHWR3UHVHQW0LWLJDWLQJ(YLGHQFH KRZHYHULVQRWDEVROXWHm,QWKHH[HUFLVHRIWKLVULJKWWKH DFFXVHG DV LV UHTXLUHG RI WKH 6WDWH PXVW FRPSO\ ZLWK 1H[W 0DVRQ FKDOOHQJHV GHIHQVH FRXQVHOjV GHFLVLRQ WR HVWDEOLVKHG UXOHV RI SURFHGXUH DQG HYLGHQFH GHVLJQHG WR SUHVHQWDOLPLWHGPLWLJDWLRQFDVHZKHQWKHUHFRUGDVLWVWDQGV DVVXUH ERWK IDLUQHVV DQG UHOLDELOLW\ LQ WKH DVFHUWDLQPHQW RI EHIRUH XV LQGLFDWHV WKDW 0DVRQ JUHZ XS LQ D G\VIXQFWLRQDO JXLOWDQGLQQRFHQFHl,G0DVRQGRHVQRWDUJXHWKDWWKH2KLR IDPLO\DQGZDVUHSHDWHGO\H[SRVHGWRYLROHQFHDQGGUXJXVH UXOHEDUULQJHYLGHQFHRISULRUEDGDFWVLVXQIDLURUXQUHOLDEOH IURP FKLOGKRRG OHDGLQJ WR HPRWLRQDO DQG SV\FKRORJLFDO ,QVWHDG 0DVRQ FRQWHQGV WKDW WKLV UXOHj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jV YLROHQW DYDLODEOH WHQGHQFLHV ZDV DGPLVVLEOH WR VKRZ KLV ELDV RU PRWLYH LQ WHVWLI\LQJ IRU WKH SURVHFXWLRQ  7KH 6XSUHPH &RXUW KDV %\WKHWLPHRIVHQWHQFLQJGHIHQVHFRXQVHOKDGGHSRVHG'U UHFRJQL]HG D GHIHQGDQWjV FRQVWLWXWLRQDO ULJKW WR WHVW WKH 6SDUH DQG SUHSDUHG WKH WZHOYH PLWLJDWLRQ H[KLELWV  7KH\ FUHGLELOLW\RIZLWQHVVHVWKURXJKFURVVH[DPLQDWLRQ6HH'DYLV RULJLQDOO\ SODQQHG WR RIIHU DV PLWLJDWLQJ HYLGHQFH WKH Y$ODVND86VHHDOVR&KDPEHUV WHVWLPRQ\RI'U6SDUHZKRFRQFOXGHGEDVHGRQ0DVRQjV 86DW)RUELGGLQJLQTXLU\LQWRDZLWQHVVjVELDVFDQ SDVWFRQGXFWWKDW0DVRQZDVXQOLNHO\WREHDUHSHDWYLROHQW YLRODWHWKH&RQIURQWDWLRQ&ODXVH'HODZDUHY9DQ$UVGDOO RIIHQGHU'HIHQVHFRXQVHOXOWLPDWHO\GHFLGHGQRWWRSUHVHQW 86+RZHYHUDWULDOFRXUWUHWDLQV WKLVHYLGHQFHZKLFKDFFRUGLQJWRWKHSURVHFXWRUZDVRPLWWHG GLVFUHWLRQWROLPLWWKHVFRSHRIFURVVH[DPLQDWLRQEDVHGRQ LQRUGHUWRIRUHFORVHUHEXWWDOHYLGHQFHDERXW0DVRQjVKLVWRU\ FRQFHUQV VXFK DV mKDUDVVPHQW SUHMXGLFH FRQIXVLRQ RI WKH RI YLROHQW FRQGXFW DOOHJHGO\ LQFOXGLQJ UDSH EUDQGLVKLQJ D LVVXHVWKHZLWQHVVj>V@VDIHW\RULQWHUURJDWLRQWKDWLVUHSHWLWLYH JXQUHVLVWLQJDUUHVWDQGEXUJODU\/HDGFRXQVHOLQIRUPHGWKH RU RQO\ PDUJLQDOO\ UHOHYDQWl  ,G DW   ,Q VKRUW WKH WULDOFRXUWWKDWWKHGHFLVLRQQRWWRSUHVHQWPLWLJDWLRQHYLGHQFH &RQIURQWDWLRQ &ODXVH JXDUDQWHHV RQO\ mDQ RSSRUWXQLW\ IRU ZDVVWUDWHJLF HIIHFWLYH FURVVH[DPLQDWLRQ QRW FURVVH[DPLQDWLRQ WKDW LV HIIHFWLYHLQZKDWHYHUZD\DQGWRZKDWHYHUH[WHQWWKHGHIHQVH :HKDYHWKHFRQVLGHUDWLRQRI0DXULFH0DVRQjVOLIH\RX PLJKWZLVKl'HODZDUHY)HQVWHUHU86 NQRZKHUHWRGD\DQGVRPHVWUDWHJLHVWKDWZHFDOFXODWHG DQGGHVLJQHGWRSURFXU>H@DQGDFKLHYHDOLIHYHUGLFWHYHQ ,QWKLVFDVH0DVRQjVGHIHQVHDWWULDOZDVWKDW&KULVKDG ZLWKWKHGHFLVLRQWKDWZDVUHQGHUHGE\WKHMXU\:HDUH PXUGHUHG 5RELQ  ,W ZDV WKXV LQ 0DVRQjV LQWHUHVW WR QRWLQWHUHVWHGLQEULQJLQJXSFHUWDLQWKLQJVRURSHQLQJWKH GHPRQVWUDWH &KULVjV ELDV DQG PRWLYH IRU WHVWLI\LQJ DJDLQVW GRRUIRUFHUWDLQWKLQJVWKDWWKH3URVHFXWLRQKDVHYLGHQFH DJUHDWGHVLUHWREULQJEHIRUHWKHMXU\  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

s$DW YROXQWDULO\DJUHHGWRDQVZHUWKHSROLFHjVTXHVWLRQV0DVRQ KDV QRW GHPRQVWUDWHG WKDW WKLV GHWHUPLQDWLRQ ZDV DQ 7KH 2KLR 6XSUHPH &RXUW KHOG WKDW GHIHQVH FRXQVHOjV XQUHDVRQDEOHDSSOLFDWLRQRIIHGHUDOFRQVWLWXWLRQDOODZWRWKH SHUIRUPDQFHDWWKHVHQWHQFLQJVWDJHZDVQRWGHILFLHQWEHFDXVH IDFWVRIKLVFDVH:HWKXVGHQ\0DVRQKDEHDVFRUSXVUHOLHI mWKHUHFRUGV>VKRZHG@SULRULQYROYHPHQWVZLWKWKHFULPLQDO ZLWKUHVSHFWWRWKLVFODLP DQGMXYHQLOHMXVWLFHV\VWHPVDQGRWKHUXQIDYRUDEOHPDWWHUV 0DVRQ FRXOG QRW KDYH SUHVHQWHG HYLGHQFH DV WR KLV JRRG m$Q\VWDWHPHQWJLYHQIUHHO\DQGYROXQWDULO\ZLWKRXWDQ\ FKDUDFWHU DQG UHKDELOLWDWLRQ SRWHQWLDO ZLWKRXW ULVNLQJ WKH FRPSHOOLQJLQIOXHQFHVLVRIFRXUVHDGPLVVLEOHLQHYLGHQFHl LQWURGXFWLRQRIQHJDWLYHHYLGHQFHE\WKHVWDWHLQUHEXWWDOlLW 0LUDQGD  86 DW   7KH 2KLR FRXUWV IRXQG WKDW DOVRFRQFOXGHGWKDW0DVRQKDGQRWVKRZQSUHMXGLFH0DVRQ 0DVRQjVVWDWHPHQWVZHUHYROXQWDU\0DVRQ1(GDW 1(GDW7KHGLVWULFWFRXUWIRFXVHGPRUHGLUHFWO\ %HFDXVH0DVRQKDVQRWSUHVHQWHGFOHDUDQGFRQYLQFLQJ RQWKHmSRVVLEOHPLWLJDWLQJHIIHFWVRI>0DVRQjV@XQIRUWXQDWH HYLGHQFHWRWKHFRQWUDU\ZHGHIHUWRWKHVWDWHFRXUWVjIDFWXDO FKLOGKRRGl0DVRQ)6XSSGDWEXWUHDFKHGWKH ILQGLQJDQGKROGWKDWWKHLUDSSOLFDWLRQRI0LUDQGDZDVQRW VDPHFRQFOXVLRQ REMHFWLYHO\XQUHDVRQDEOH >0DVRQ@ KDV QRW VXJJHVWHG WKH H[LVWHQFH RI DQ\ (5LJKWWR&RQIURQW:LWQHVVHVDQGWR3UHVHQWD'HIHQVH PLWLJDWLQJIDFWRUWKDWLVQRWRYHUZKHOPLQJO\QHJDWHGE\ KLVKLVWRU\RIYLROHQWFULPLQDOFRQGXFWLQFOXGLQJDSULRU 0DVRQ DUJXHV WKDW WKH WULDO FRXUW YLRODWHG KLV ULJKW WR UDSH DQG ILUHDUPV RIIHQVHV PXOWLSOH SDUROH YLRODWLRQV FRQIURQWWKHSURVHFXWLRQjVZLWQHVVHVDQGWRSUHVHQWDGHIHQVH DQG PXOWLSOH GUXJ RIIHQVHV VWUHWFKLQJ DV IDU EDFN DV E\UHVWULFWLQJFURVVH[DPLQDWLRQRI&KULVZKRKDGDKLVWRU\ HOHPHQWDU\VFKRRO>0DVRQ@jVFRXQVHOjVVWUDWHJ\RIQRW RIYLROHQWDVVDXOWVRQ5RELQDQGRWKHUV0DVRQDVVHUWVWKDW SUHVHQWLQJ PLWLJDWLQJ WHVWLPRQ\ LQ RUGHU WR NHHS WKH2KLR6XSUHPH&RXUWjVGHFLVLRQWRXSKROGWKHWULDOFRXUWjV >0DVRQ@jVH[WHQVLYHFULPLQDOKLVWRU\IURPWKHMXU\ZDV H[FOXVLRQRIWKLVHYLGHQFHZDVDQXQUHDVRQDEOHDSSOLFDWLRQRI REMHFWLYHO\ UHDVRQDEOH  1RU KDV >0DVRQ@ VKRZQ WKHIROORZLQJSULQFLSOHVIURP:DVKLQJWRQY7H[DV86 SUHMXGLFH RQ WKLV UHFRUG 0DVRQ FDQQRW VKRZ D  UHDVRQDEOHOLNHOLKRRGWKDWDQ\MXURUZKRZDVDSSULVHGRI >0DVRQ@jV FRPSOHWH SV\FKRVRFLDO KLVWRU\ n LQFOXGLQJ 7KHULJKWWRRIIHUWKHWHVWLPRQ\RIZLWQHVVHVDQGWR KLVSULRUFULPLQDOUHFRUGnZRXOGQRWKDYHYRWHGIRUWKH FRPSHOWKHLUDWWHQGDQFHLIQHFHVVDU\LVLQSODLQWHUPV GHDWKSHQDOW\ WKH ULJKW WR SUHVHQW D GHIHQVH WKH ULJKW WR SUHVHQW WKH GHIHQGDQWjV YHUVLRQ RI WKH IDFWV DV ZHOO DV WKH ,GDWLQWHUQDOFLWDWLRQRPLWWHG SURVHFXWLRQjVWRWKHMXU\VRLWPD\GHFLGHZKHUHWKHWUXWK OLHV  sXVW DV DQ DFFXVHG KDV WKH ULJKW WR FRQIURQW WKH ,Q UHMHFWLQJ 0DVRQjV FODLP RI LQHIIHFWLYH DVVLVWDQFH DW SURVHFXWLRQjVZLWQHVVHVIRUWKHSXUSRVHRIFKDOOHQJLQJ VHQWHQFLQJWKHGLVWULFWFRXUWUHOLHGRQ6FRWWLQZKLFKZHKHOG WKHLU WHVWLPRQ\ KH KDV WKH ULJKW WR SUHVHQW KLV RZQ WKDW GHIHQVH FRXQVHOjV GHFLVLRQ QRW WR SUHVHQW PLWLJDWLQJ ZLWQHVVHV WR HVWDEOLVK D GHIHQVH  7KLV ULJKW LV D HYLGHQFHZDVUHDVRQDEOHLQOLJKWRIWKHSHWLWLRQHUjVH[WHQVLYH IXQGDPHQWDOHOHPHQWRIGXHSURFHVVRIODZ FULPLQDO KLVWRU\ ZKLFK LQFOXGHG mFRPPLVVLRQ RI UREEHU\ DVVDXOW NLGQDSLQJ DQG RWKHU YLROHQW DFWV XSRQ LQQRFHQW ,GDW7KH6WDWHRI2KLRGRHVQRWGLVSXWHWKDWDGHIHQGDQW FLWL]HQVl6FRWW)GDW7KHSRWHQWLDOPLWLJDWLQJ PD\RIIHUHYLGHQFHWRVKRZWKDWDWKLUGSDUW\FRPPLWWHGWKH HYLGHQFHLQWKDWFDVHDVIRXQGE\WKHVWDWHFRXUWDIWHUDSRVW FULPHEXWLWFRQWHQGVWKDWUXOHVRISURFHGXUHDQGHYLGHQFH FRQYLFWLRQHYLGHQWLDU\KHDULQJFRQVLVWHGRIWHVWLPRQ\DERXW  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

SRLQWVWRWKHIROORZLQJIDFWRUVKHZDVWKHVROHVXVSHFWLQ WKHSHWLWLRQHUjVmSHUVRQDOOR\DOW\WRKLVVLEOLQJVJLUOIULHQG WKHLQYHVWLJDWLRQKHZDVWUDQVSRUWHGE\FDUWRWKHSROLFH DQG FKLOGUHQ DQG DQ H[FHHGLQJO\ YLROHQW HQYLURQPHQW VWDWLRQ IRU TXHVWLRQLQJ mSUHFOXGLQJ KLV DELOLW\ WR OHDYH WKURXJKRXW KLV XSEULQJLQJl ,G  ,QVWHDG RI SUHVVLQJ WKRVH ZLWKRXW WKH RIILFHUV>j@ SHUPLVVLRQ DQG ZLOOLQJQHVV WR GULYH SRLQWVGHIHQVHFRXQVHOFKRVHDVWUDWHJ\RIUHVLGXDOGRXEWDQG KLPKRPHlKHZDVTXHVWLRQHGDWWKHSROLFHVWDWLRQDQG RQO\SUHVHQWHGWKHSHWLWLRQHUjVXQVZRUQVWDWHPHQW,G mLQWHUURJDWHG IRU IRXU KRXUV LQ DQ LQFUHDVLQJO\ KRVWLOH VHWWLQJl  KH ZDV mOLHG WR E\ WKH RIILFHUV UHJDUGLQJ :HUHFRJQL]HWKHIDFWXDOVLPLODULWLHVEHWZHHQ6FRWWDQGWKLV H\HZLWQHVVHV>j@SODFLQJ0DVRQDWWKHFULPHVFHQHlKHZDV FDVH+RZHYHUDIWHUWKH6XSUHPH&RXUWGHFLGHG:LOOLDPV mUHSHDWHGO\ WROG KH ZDV QRW XQGHU DUUHVW HYHQ WKRXJK KLV ZHTXHVWLRQHGZKHWKHUWKHKROGLQJLQ6FRWWVKRXOGEHOLPLWHG SDUROHRIILFHUVWRRGUHDG\WRLPPHGLDWHO\DUUHVWKLPDVVRRQ mWRWKHQDUURZIDFWVRIDIHGHUDOFRXUWFRQWHPSODWLQJDKDEHDV DV WKH LQWHUURJDWLRQ FHDVHGl DQG  KH ZDV DUUHVWHG IRU D SHWLWLRQ DIWHU D VWDWH FRXUW KDV FRQGXFWHG DQ HYLGHQWLDU\ SDUROH YLRODWLRQ DIWHU WKH )HEUXDU\  LQWHUURJDWLRQ KHDULQJ DQG PDGH D ILQGLQJ RI IDFW WKDW KDG PLWLJDWLQJ 3HWLWLRQHUjV%UDW HYLGHQFH EHHQ LQWURGXFHG WKH GHIHQGDQWjV UHFHQW FULPLQDO KLVWRU\ZRXOGKDYHEHHQSUHVHQWHGWRWKHMXU\LQUHEXWWDOl +RZHYHU ZH DJUHH ZLWK WKH 6WDWH RI 2KLR WKDW WKHVH &DUWHU)GDWQ$VZHKDYHQRWHGDERYHQR FLUFXPVWDQFHVGRQRWGHPRQVWUDWHWKHIXQFWLRQDOHTXLYDOHQWRI VWDWH RU IHGHUDO FRXUW KDV KHOG DQ HYLGHQWLDU\ KHDULQJ RQ DQ DUUHVW  0DVRQjV ILUVW DUJXPHQW LV XQDYDLOLQJ  6HH 0DVRQjVLQHIIHFWLYHDVVLVWDQFHFODLP:HWKHUHIRUHEHOLHYH 6WDQVEXU\86DWm>$@QRIILFHUjVVXEMHFWLYHDQG WKDW6FRWWLVOHVVUHOHYDQWWKDQLWPLJKWRWKHUZLVHEH XQGLVFORVHG YLHZ FRQFHUQLQJ ZKHWKHU WKH SHUVRQ EHLQJ LQWHUURJDWHG LV D VXVSHFW LV LUUHOHYDQW WR WKH DVVHVVPHQW %DVHG RQ WKH UHFRUG EHIRUH XV ZH DJUHH ZLWK WKH 2KLR ZKHWKHUWKHSHUVRQLVLQFXVWRG\l:HGHHPWKHPRGHLQ 6XSUHPH &RXUW WKDW GHIHQVH FRXQVHO H[HUFLVHG UHDVRQDEOH ZKLFK0DVRQZDVWUDQVSRUWHGIRUTXHVWLRQLQJWREHLUUHOHYDQW SURIHVVLRQDOMXGJPHQWLQGHFLGLQJQRWWRSUHVHQWPLWLJDWLQJ EHFDXVH0DVRQKLPVHOIDGPLWVWKDWKHmYROXQWDULO\FDPHWR HYLGHQFHDERXW0DVRQjVmJRRGFKDUDFWHUDQGUHKDELOLWDWLRQ WKHSROLFHVWDWLRQWZLFHl3HWLWLRQHUjV%UDW7KHIDFW SRWHQWLDOl0DVRQ1(GDWEXWZHUHLWHUDWHWKDW WKDW0DVRQZDVTXHVWLRQHGLQDmFRHUFLYHHQYLURQPHQWlVXFK FRXQVHOPD\KDYHUHQGHUHGLQHIIHFWLYHDVVLVWDQFHLQIDLOLQJWR DVDSROLFHVWDWLRQGRHVQRWQHFHVVDULO\FRQVWLWXWHFXVWRGLDO LQYHVWLJDWH DQG WKXV EHLQJ XQDEOH WR SUHVHQW SRWHQWLDO LQWHUURJDWLRQ0DWKLDVRQ86DW8QLWHG6WDWHVY PLWLJDWLQJHYLGHQFHDERXW0DVRQjVEDFNJURXQG:HEHJLQE\ 6DOYR)GWK&LUFHUWGHQLHG86 QRWLQJWKDWZHKDYHSUHYLRXVO\GHHPHGWKHIDLOXUHWRSUHVHQW 0LUDQGDUHTXLUHVDVLJQLILFDQWGHSULYDWLRQRI PLWLJDWLQJ HYLGHQFH ZKHQ LW ZDV DYDLODEOH WR EH mDQ IUHHGRP  7KH SRVVLELOLW\ WKDW 0DVRQ PD\ QRW KDYH EHHQ DEGLFDWLRQ RI DGYRFDF\l UDWKHU WKDQ D VWUDWHJLF GHFLVLRQ DZDUH RI WKH FRQVHTXHQFHV RI KLV SDUWLFLSDWLRQ LQ WKH $XVWLQ)GDW7KLVKROGLQJKRZHYHUQHFHVVDULO\ LQWHUYLHZV GRHV QRW PHDQ WKDW KH ZDV LQ FXVWRG\  6HH UHTXLUHV DQ LQTXLU\ LQWR WKH PLWLJDWLQJ HYLGHQFH WKDW ZDV %HKHOHU86DWQ0DVRQZDVUHSHDWHGO\WROG DYDLODEOHDWWKHWLPHRIVHQWHQFLQJ WKDWKHZDVIUHHWROHDYHZKHQKHZLVKHG7KHVWDWHFRXUWV FRQFOXGHG WKDW 0DVRQ ZDV QRW LQ FXVWRG\ DW WKH WLPH RI $V GLVFXVVHG DERYH WULDO FRXQVHOjV SUHSDUDWLRQ IRU TXHVWLRQLQJ EHFDXVH KH ZDV QRW XQGHU DUUHVW DQG KH VHQWHQFLQJ DSSHDUV WR KDYH EHHQ OLPLWHG WR UHYLHZLQJ WKH GRFXPHQWV WKDW WKH SURVHFXWLRQ GLVFORVHG WR WKHP DQG GHSRVLQJ'U6SDUHZKRWULHGmWRGHWHUPLQHPLWLJDWLRQlDQG  0DVRQ QRWHV WKDW 3RWWV GURYH KLP IURP KLV KRPH WR WKH 6KHULIIjV mWRDWWHPSWWRGHWHUPLQHWKHOLNHOLKRRGRI>0DVRQ@EHLQJD 2IILFH LQ DQ XQPDUNHG SROLFH FDU ZLWK GRRUV WKDW FRXOG QRW EH XQORFNHG UHSHDWYLROHQWRIIHQGHUDQGRUKLVSRWHQWLDOIRUUHKDELOLWDWLRQl E\ SDVVHQJHUV  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

6PDOOGRQ$IIDWˆˆ'U6SDUHFRQFOXGHGKLVUHSRUWWR WKHSROLFHVXVSHFWl&DOLIRUQLDY%HKHOHU86 GHIHQVH FRXQVHO E\ SUHGLFWLQJ 0DVRQjV IXWXUH EHKDYLRU SHUFXULDPTXRWLQJ0DWKLDVRQ86DW m%DVHGRQWKHDYDLODEOHHYLGHQFH0U0DVRQLVQRWOLNHO\WR m>7@KHRQO\UHOHYDQWLQTXLU\LVKRZDUHDVRQDEOHPDQ EHDUHSHDWYLROHQWRIIHQGHUXQGHURUGLQDU\FLUFXPVWDQFHV LQ WKH VXVSHFWjV SRVLWLRQ ZRXOG KDYH XQGHUVWRRG KLV >+LV@ SDWWHUQ LV WKDW RI DYRLGDQFH DQG UXQQLQJ DZD\ DV VLWXDWLRQl%HUNHPHUY0F&DUW\86 RSSRVHG WR DJJUHVVLYH YLROHQFHl  6PDOOGRQ $II DW ˆ  7KHUHIRUH WKH PLWLJDWLQJ HYLGHQFH DYDLODEOH WR GHIHQVH ,QWKLVFDVH3RWWVTXHVWLRQHG0DVRQWZLFHDERXW5RELQjV FRXQVHODWVHQWHQFLQJFRQFHUQHG0DVRQjVLQWHUDFWLRQVZLWK GLVDSSHDUDQFH7KHILUVWLQWHUURJDWLRQZKLFKWRRNSODFHLQ WKHVWDWHDQG'U6SDUHjVDVVHVVPHQWRI0DVRQjVFKDUDFWHU WKH HDUO\ DIWHUQRRQ RI )HEUXDU\   DW WKH 6KHULIIjV 2IILFH ZDV UHFRUGHG RQ DXGLRWDSH DQG ODVWHG HLJKWHHQ ,QGLVPLVVLQJ0DVRQjVSHWLWLRQIRUSRVWFRQYLFWLRQUHOLHI PLQXWHV$WWKHKHDULQJRQ0DVRQjVPRWLRQWRVXSSUHVVWKH WKH WULDO FRXUW UHIHUUHG WR WKH WZHOYH PLWLJDWLRQ H[KLELWV LQ VWDWHPHQWV PDGH DW WKLV LQWHUURJDWLRQ DQG WKH LQWHUURJDWLRQ ILQGLQJWKDWm>W@KHHYLGHQFHUHJDUGLQJ>0DVRQjV@EDFNJURXQG WKDWIROORZHG3RWWVGHVFULEHG0DVRQDVmUHDOFRRSHUDWLYHl ZKLFK KH QRZ FRQWHQGV VKRXOG KDYH EHHQ LQWURGXFHG ZDV DQGWHVWLILHG WKDW0DVRQWROGKLPmWRFRPHEDFNE\lLIKH FRQVLGHUHGE\'HIHQVH&RXQVHOl0DVRQ1R&5 QHHGHGDQ\WKLQJHOVHs$DW0DVRQDJUHHGWKDWKH VOLSRSDW7KHWULDOFRXUWWKHQOLVWHGWKHIROORZLQJHYLGHQFH PDGHDmYROXQWDU\FKRLFHlWRDQVZHU3RWWVjVTXHVWLRQVDERXW WKDWWKHSURVHFXWLRQFRXOGKDYHLQWURGXFHGLQUHEXWWDO 5RELQs$DW $ 7KDW >0DVRQ@ KDG PXOWLSOH MXYHQLOH RIIHQVHV DQG 7KHVHFRQGLQWHUURJDWLRQWRRNSODFHRQ)HEUXDU\ ZDVFRPPLWWHGWRWKH2KLR0DVRQ@KDGEHHQDGUXJXVHUVLQFHDJHDQG WHVWLILHGWKDWKLVPRELOLW\ZDVKDPSHUHGE\EHLQJTXHVWLRQHG ZDVDOVRDGUXJGHDOHU0LWLJDWLRQ([KLELW LQWKHEDVHPHQW+HDOVRWHVWLILHGWKDWKHDVNHGWKHSROLFHWR ' >7KDW 0DVRQ@ HQJDJHG LQ RWKHU YLROHQW FRQGXFW WDNH KLP EDFN KRPH DQG WR WHUPLQDWH WKH LQWHUYLHZ LQFOXGLQJ WKUHDWHQLQJ KLV H[JLUOIULHQG ZLWK D JXQ +RZHYHU KH DFNQRZOHGJHG RQ FURVVH[DPLQDWLRQ WKDW KH 0LWLJDWLRQ ([KLELWV   'HSRVLWLRQ RI 'U FRXOGKDYHJRWWHQRXWRIWKHLQWHUURJDWLRQURRP$IWHUWKLV 6SDUH LQWHUYLHZ0DVRQjVSDUROHRIILFHUWRRN0DVRQLQWRFXVWRG\IRU ( 7KDWKHOSZDVRIIHUHGWR>0DVRQ@DWDQHDUO\DJH YLRODWLQJWKHFRQGLWLRQVRIKLVSDUROH3RWWVWKHQJDYH0DVRQ LQFOXGLQJ FRXQVHOLQJ LQ ZKLFK KH UHIXVHG WR KLV 0LUDQGD ZDUQLQJV  7KH LQWHUYLHZ HQGHG ZKHQ 0DVRQ SDUWLFLSDWH0LWLJDWLRQ([KLELW UHIXVHGWRZDLYHKLV0LUDQGDULJKWVDQGUHTXHVWHGDODZ\HU ) 7KDWKHUDSHG'DQLHOOH0LOOHURQ2FWREHU 'U6SDUHGHSRVLWLRQ 0DVRQDUJXHVWKDWKHZDVLQFXVWRG\GXULQJWKHLQWHUYLHZV * 7KDW GXULQJ WKH WHQ \HDUV SULRU WR UDSLQJ DQG RI)HEUXDU\DQGDQGWKDWKLVVWDWHPHQWVWRWKHSROLFH PXUGHULQJ5RELQ'HQQLV>0DVRQ@KDGVSHQWDOOEXW VKRXOGFRQVHTXHQWO\QRWKDYHEHHQDGPLWWHGDWWULDO0DVRQ  PRQWKV LQ SULVRQ ZKLFK LQFOXGHG KLV SDUROH EHLQJ YLRODWHG RQ IRXU VHSDUDWH RFFDVLRQV  GHSRVLWLRQRI'U6SDUH 0DVRQ DOVR LQGLFDWHG WKDW KH KDG WR OHDYH LQ RUGHU WR SD\ D XWLOLW\ ELOO  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

'0LUDQGD9LRODWLRQ ,GDW7KH2KLR6XSUHPH&RXUWGHWHUPLQHGWKDWGHIHQVH FRXQVHOUHDVRQDEO\FKRVHQRWWRSUHVHQWPLWLJDWLQJHYLGHQFH 6LQFH 0LUDQGD Y $UL]RQD  86   FRXUWV DERXW0DVRQjVmJRRGFKDUDFWHUDQGUHKDELOLWDWLRQSRWHQWLDOl KDYH SURWHFWHG D GHIHQGDQWjV SULYLOHJH DJDLQVW VHOI EHFDXVH WKH\ GLG QRW ZDQW WR UXQ WKH ULVN RI WKLV QHJDWLYH LQFULPLQDWLRQE\VXSSUHVVLQJDQ\VWDWHPHQWmVWHPPLQJIURP UHEXWWDO HYLGHQFH  0DVRQ  1(G DW   7KH VWDWH FXVWRGLDOLQWHUURJDWLRQRIWKHGHIHQGDQWlLIWKHSROLFHIDLOHGWR VXSUHPH FRXUW GLG QRW H[SOLFLWO\ EDVH LWV FRQFOXVLRQ DERXW FRPSO\ZLWKFHUWDLQSURFHGXUDOVDIHJXDUGV,GDW$W GHIHQVHFRXQVHOjVVWUDWHJLFPRWLYDWLRQVRQZKHWKHUVWDWHODZ WULDOWKHSURVHFXWLRQLQWURGXFHGVWDWHPHQWVWKDW0DVRQKDG ZRXOGKDYHDOORZHGWKHSURVHFXWRUWRXVHDOORIWKHQHJDWLYH PDGHWRWKHSROLFHGXULQJLQWHUYLHZVRQ)HEUXDU\DQG HYLGHQFHOLVWHGDERYH&IHJ6WDWHY+HQQHVV1(G   0DVRQ FRQWHQGV WKDW WKH WULDO FRXUW VKRXOG KDYH 2KLROLPLWLQJDSURVHFXWRUjVULJKWWRmUHEXW VXSSUHVVHGWKHVHVWDWHPHQWVEHFDXVHWKH\ZHUHPDGHZKLOHKH IDOVH RU LQFRPSOHWH VWDWHPHQWV UHJDUGLQJ WKH GHIHQGDQWjV ZDVLQFXVWRG\DQGEHIRUHKHUHFHLYHGDQ\0LUDQGDZDUQLQJV FULPLQDOUHFRUGWRWKRVHLQVWDQFHVZKHUHWKHGHIHQVHRIIHUV 7KH 2KLR 6XSUHPH &RXUW GLVDJUHHG FRQFOXGLQJ IURP WKH DVSHFLILFDVVHUWLRQE\DPLWLJDWLRQZLWQHVVRUE\GHIHQGDQW FLUFXPVWDQFHVRIWKH)HEUXDU\LQWHUYLHZVWKDW0DVRQZDVQRW WKDW PLVUHSUHVHQWV WKH GHIHQGDQWjV SULRU FULPLQDO KLVWRU\l LQFXVWRG\GXULQJKLVLQWHUURJDWLRQDQGWKDWKHKDGPDGHWKH %HFDXVHVWDWHODZJRYHUQVWKHVFRSHRIUHEXWWDOHYLGHQFHZH VWDWHPHQWVYROXQWDULO\0DVRQ1(GDW%HFDXVH DV D IHGHUDO KDEHDV FRXUW ZLOO DFFHSW WKH 2KLR 6XSUHPH WKH VWDWH FRXUW FRUUHFWO\ LQYRNHG 0LUDQGD LQ WKLV FDVH ZH &RXUWjVLQWHUSUHWDWLRQRIVWDWHODZ6HH*UHHUY0LWFKHOO UHYLHZ LWV GHFLVLRQ XQGHU WKH mXQUHDVRQDEOH DSSOLFDWLRQl )GWK&LUFHUWGHQLHGn86n SURQJRI†G VSHFLILFDOO\ZKHWKHULWVDSSOLFDWLRQRI 6 &W  0DU    +RZHYHU ZH REVHUYH RQFH WKH OHJDO SULQFLSOHV ZDV mREMHFWLYHO\ XQUHDVRQDEOHl DJDLQ WKDW WKLV UHDVRQLQJ GRHV QRW DSSO\ WR PLWLJDWLQJ :LOOLDPV86DW:HPXVWSUHVXPHWKDWWKHVWDWH HYLGHQFHDERXW0DVRQjVEDFNJURXQGDQGOLIHKLVWRU\ZKLFK FRXUWjVIDFWXDOILQGLQJVDUHFRUUHFWXQOHVV0DVRQRIIHUVFOHDU WULDOFRXQVHOGLGQRWLQYHVWLJDWHDQGWKXVKDGQRRSSRUWXQLW\ DQGFRQYLQFLQJHYLGHQFHWRUHEXWWKLVSUHVXPSWLRQ86& WRSUHVHQWDWVHQWHQFLQJ7HVWLPRQ\WKDWVLPSO\SXW0DVRQjV †H  FKLOGKRRGLQWRFRQWH[WZLWKRXWPLVUHSUHVHQWLQJLWZRXOGQRW KDYHEHHQVXEMHFWWRWKHSURVHFXWRUjVUHEXWWDOHYLGHQFHZKLFK 7KH 0LUDQGD &RXUW GHILQHG FXVWRGLDO LQWHUURJDWLRQ DV PRVWO\FRQFHUQHG0DVRQjVFKDUDFWHU mTXHVWLRQLQJ LQLWLDWHG E\ ODZ HQIRUFHPHQW RIILFHUV DIWHU D SHUVRQKDVEHHQWDNHQLQWRFXVWRG\RURWKHUZLVHGHSULYHGRI F,QDGHTXDWH3V\FKLDWULF$VVLVWDQFH KLVIUHHGRPRIDFWLRQLQDQ\VLJQLILFDQWZD\l0LUDQGD 86 DW   $ VXVSHFW LV mLQ FXVWRG\l IRU SXUSRVHV RI 0DVRQ DUJXHV WKDW KH UHFHLYHG LQHIIHFWLYH DVVLVWDQFH RI UHFHLYLQJ 0LUDQGD SURWHFWLRQ LI WKHUH KDV EHHQ D mIRUPDO FRXQVHO DW VHQWHQFLQJ EHFDXVH KLV DWWRUQH\V DFFHGHG WR DUUHVW RU UHVWUDLQW RQ IUHHGRP RI PRYHPHQWl  2UHJRQ Y LQDGHTXDWHSV\FKLDWULFDVVLVWDQFH6SHFLILFDOO\KHDUJXHVWKDW 0DWKLDVRQ  86     m>7@KH LQLWLDO 'U 6SDUH WKH SV\FKLDWULVW ZKR H[DPLQHG KLP IRU WKH GHWHUPLQDWLRQ RI FXVWRG\ GHSHQGV RQ WKH REMHFWLYH VHQWHQFLQJSKDVHIDLOHGWRGHYHORSPLWLJDWLQJHYLGHQFHDQG FLUFXPVWDQFHV RI WKH LQWHUURJDWLRQ QRW RQ WKH VXEMHFWLYH VKRXOGKDYHEHHQGLVTXDOLILHGGXHWRDFRQIOLFWRILQWHUHVWWKDW YLHZV KDUERUHG E\ HLWKHU WKH LQWHUURJDWLQJ RIILFHUV RU WKH VWHPPHGIURPKLVWUHDWPHQWRI0DVRQjVZLIH3HWLWLRQHUjV%U SHUVRQEHLQJTXHVWLRQHGl6WDQVEXU\Y&DOLIRUQLD86 DW  Q  ,Q 6NDJJV ZH KHOG WKDW FRXQVHOjV XVH RI DQ    SHU FXULDP  0LUDQGD ZDUQLQJV DUH QRW LQFRPSHWHQW SV\FKLDWULF H[SHUW DW VHQWHQFLQJ FRQVWLWXWHG UHTXLUHGmVLPSO\EHFDXVHWKHTXHVWLRQLQJWDNHVSODFHLQWKH LQHIIHFWLYHDVVLVWDQFHRIFRXQVHO6NDJJV)GDW VWDWLRQKRXVHRUEHFDXVHWKHTXHVWLRQHGSHUVRQLVRQHZKRP +RZHYHU WKH GHIHQGDQW LQ 6NDJJV ZDV SURWHFWHG E\ $NH  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

EHFDXVHKHKDGFODLPHGLQVDQLW\DVDGHIHQVHDWWULDO,GDW :H DJUHH ZLWK WKH GLVWULFW FRXUW WKDW 0DVRQ ZDV QRW   0DVRQjV GHIHQVH UHVWHG RQ UHVLGXDO GRXEW DQG WKH SUHMXGLFHGE\WKHQRQGLVFORVXUHRI+D\GHQjVQRWHV%RWKWKH DUJXPHQWWKDW&KULVKDGPXUGHUHG5RELQWKHUHIRUH0DVRQ LQJ@WRLQYHVWLJDWHDQGSUHVHQW QLJKWRIKHUGLVDSSHDUDQFH&DURO\QLQJ@DQLQFRPSHWHQW EHOLHYHGWKDWVKHKDGVHHQ5RELQEHWZHHQDQGSP DQG IUDXGXOHQW µSV\FKRORJLVWj DV WKH FHQWUDO PLWLJDWLRQ EXWVWDWHGWKDWVKHKDGQRWZRUQKHUJODVVHVDQGFRXOGQRWEH ZLWQHVVl FHUWDLQDERXWZKHWKHUVKHKDGDFWXDOO\VHHQ5RELQLQWKHFDU &KULVKLPVHOIWHVWLILHGRQERWKGLUHFWDQGFURVVH[DPLQDWLRQ +RZHYHUDFFRUGLQJWRWKHUHFRUGEHIRUHXVDFRPSHWHQW DERXWEHLQJWKHEHQHILFLDU\RI5RELQjVOLIHLQVXUDQFHSROLF\ SV\FKLDWULFH[SHUWZRXOGKDYHmFRQGXFW>HG@DZLGHUDQJLQJ ,QOLJKWRIWKHGLUHFWDQGFURVVH[DPLQDWLRQRIWKHWKDW@ ZHUH 0DVRQSXUVXHGKLVLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLP LPSHDFKLQJDVZHOODVH[FXOSDWRU\DQGZHUHUHTXLUHGWREH ZLWKGLOLJHQFHUDLVLQJLWLQDOORIKLVSOHDGLQJV+HKDV\HWWR GLVFORVHGE\WKHVWDWHl3HWLWLRQHUjV%UDW:HDUHXQDEOH UHFHLYHKLVUHTXHVWIRUDQHYLGHQWLDU\KHDULQJ:HWKHUHIRUH WRILQGWKHH[LVWHQFHRIDQ\VXFKGRFXPHQWVLQWKHUHFRUG:H UHPDQGWKLVFDVHWRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQVWRKROG DOVRDJUHHZLWKWKHGLVWULFWFRXUWjVREVHUYDWLRQWKDWGHIHQVH DQHYLGHQWLDU\KHDULQJDQGWRGHWHUPLQHLQOLJKWRIWKHIDFWRUV FRXQVHOmFURVVH[DPLQHGHDFKRIWKHOLVWHGZLWQHVVHVLQGHWDLO WKDW ZH KDYH GLVFXVVHG ZKHWKHU GHIHQVH FRXQVHO UHQGHUHG DQGIUHTXHQWO\XVHGSUHWULDOVWDWHPHQWVIURPWKRVHZLWQHVVHV FRQVWLWXWLRQDOO\ LQHIIHFWLYH DVVLVWDQFH ZLWK UHVSHFW WR WKH IRULPSHDFKPHQWSXUSRVHVl0DVRQ)6XSSGDW VHQWHQFLQJSKDVHRI0DVRQjVWULDO %HFDXVH0DVRQIDLOHGWRLQGLFDWHWKHH[LVWHQFHRUORFDWLRQRI WKHVH VWDWHPHQWV ZH FRQFOXGH WKDW KH KDV EHHQ XQDEOH WR &%UDG\9LRODWLRQ VKRZSUHMXGLFHIURPWKHLUQRQGLVFORVXUHDQGWKDWKHKDVIDLOHG WR RYHUFRPH KLV SURFHGXUDO GHIDXOW SUHFOXGLQJ KLP IURP $IWHU%UDG\Y0DU\ODQG86DSURVHFXWRU DVVHUWLQJD%UDG\YLRODWLRQEHIRUHXV ZKRVXSSUHVVHVHYLGHQFHWKDWLVERWKIDYRUDEOHWRDGHIHQGDQW DQGmPDWHULDOHLWKHUWRJXLOWRUWRSXQLVKPHQWlYLRODWHVGXH SURFHVV mLUUHVSHFWLYH RI WKH JRRG IDLWK RU EDG IDLWK RI WKH SURVHFXWLRQl,GDW7KH%UDG\UXOHHQFRPSDVVHVERWK  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

0DVRQ DOVR DVVHUWV WKDW KH VXIIHUHG SUHMXGLFH GXH WR WKH H[FXOSDWRU\ DQG LPSHDFKPHQW HYLGHQFH  8QLWHG 6WDWHV Y QRQGLVFORVXUH RI QRWHV WKDW +D\GHQ WRRN ZKLOH FRQGXFWLQJ %DJOH\  86     )DYRUDEOH HYLGHQFH LV WHOHSKRQHLQWHUYLHZVRIWKH%UDG\@ FODLPV VHW IRUWK LQ VKHWKRXJKWVKHKDGVHHQ5RELQ'HQQLVULGLQJLQDFDURQ >0DVRQjV@ SHWLWLRQ ZHUH RU VKRXOG KDYH EHHQ>@ UDLVHG RQ WKHHYHQLQJRI)HEUXDU\VHYHUDOKRXUVDIWHUWKH GLUHFW DSSHDO IURP KLV FRQYLFWLRQl DQG WKHQ UXOHG DJDLQVW SURVHFXWLRQ DUJXHG WKDW >0DVRQ@ NLOOHG 'HQQLV  %RWK 0DVRQRQWKHPHULWV0DVRQ:/DW 7KH 0DVRQ@QRWRQO\KDGDFFHVV IRUHFORVXUH RI FRQVWLWXWLRQDO FODLPV LQ KDEHDVl ,G DW  WREXWDFWXDOO\DWWHPSWHGWRSURIIHUDWWULDOHYHU\SLHFHRI FLWLQJ5XVWY=HQW)GWK&LUDQG5LJJLQV H[FXOSDWRU\HYLGHQFHKHQRZDOOHJHVKHZDVXQIDLUO\GHSULYHG Y 0F0DFNLQ  )G  WK &LU    +RZHYHU RI E\ WKH VWDWHjV IDLOXUH WR GLVFORVH &DSWDLQ +D\GHQjV IHGHUDO KDEHDV UHOLHI LV DYDLODEOH IRU FRQVWLWXWLRQDO FODLPV WHOHSKRQHFRQYHUVDWLRQVZLWK0LFKDHODQG&DURO\QVWDWHjV@  0DVRQY0LWFKHOO 1R 1R 0DVRQY0LWFKHOO 

YHU\ DFW RI ZLWKKROGLQJ WKH HYLGHQFH LQ WKH ILUVW SODFH ZLWQHVVHV WKDW ZHUH DOOHJHGO\ LQFRQVLVWHQW ZLWK WKHLU HVWDEOLVKHV µFDXVHj IRU DQ\ DOOHJHG SURFHGXUDO GHIDXOWl WHVWLPRQ\DWWULDO7KHGLVWULFWFRXUWUHYLHZHGWKHUHFRUGDQG 3HWLWLRQHUjV%UDW6HFRQGKHDUJXHVWKDWmWKHIDFWWKDWWKH GHWHUPLQHGWKDWWKHUHZDVQRUHDVRQDEOHSUREDELOLW\WKDWWKH GRFXPHQWVZHUHQRWDYDLODEOHXQWLOVWDWHSRVWFRQYLFWLRQDJDLQ GLVFORVXUH RI WKHVH VWDWHPHQWV ZRXOG KDYH SURGXFHG D HVWDEOLVKHV DGHTXDWH µFDXVHj IRU DQ\ DOOHJHG GHIDXOW  $ GLIIHUHQWUHVXOWDWWULDO0DVRQ)6XSSGDW:H SHWLWLRQHULVQRWUHTXLUHGWRUDLVHRQGLUHFWDSSHDOFODLPVIRU DJUHH ZKLFKKHODFNVDEDVLVLQIDFWHVSHFLDOO\ZKHUHWKHVWDWHKDV DFWXDOO\FRQFHDOHGWKHIDFWVl3HWLWLRQHUjV%UDWLQWHUQDO 5RGHIIHUZDVDUUHVWHGRQ)HEUXDU\IRXUGD\VDIWHU FLWDWLRQRPLWWHG+RZHYHUDVWKHGLVWULFWFRXUWQRWHG0DVRQ WKHGLVFRYHU\RI5RELQjVERG\IRUVWHDOLQJZKLVNH\IURPD KDV QRW VKRZQ ZK\ WKH EDVLV IRU D %UDG\ FODLP ZDV QRW FRQYHQLHQFHVWRUH$WWKHWLPHRIKLVDUUHVW5RGHIIHUZDV DYDLODEOHRQGLUHFWDSSHDO&RQFOXVRU\VWDWHPHQWVDERXWVWDWH ERWKLQWR[LFDWHGDQGVXLFLGDOKHKDGDSSDUHQWO\FRQVXPHG FRQFHDOPHQWZLOOQRWVXSSRUWDILQGLQJRIFDXVH$PDGHR WKUHHTXDUWHUVRIDILIWKRIZKLVNH\DQGVHYHQVOHHSLQJSLOOV 86DWm>7@KHH[LVWHQFHRIFDXVHIRUDSURFHGXUDO 6RRQDIWHUPDNLQJWKHDUUHVWWKHSROLFHWUDQVSRUWHG5RGHIIHU GHIDXOWPXVWRUGLQDULO\WXUQRQZKHWKHUWKHSULVRQHUFDQVKRZ WR0DULRQ*HQHUDO+RVSLWDOIRUDPHGLFDOHYDOXDWLRQ:KLOH WKDWVRPHREMHFWLYHIDFWRUH[WHUQDOWRWKHGHIHQVHLPSHGHG EHLQJH[DPLQHG5RGHIIHULQGLFDWHGWRWKHDUUHVWLQJRIILFHU FRXQVHOjVHIIRUWVWRFRPSO\ZLWKWKH6WDWHjVSURFHGXUDOUXOHl WKDW KH KDG LQIRUPDWLRQ DERXW 5RELQjV GHDWK ZKLFK KH TXRWLQJ0XUUD\Y&DUULHU86  LQWLPDWHGZDVmVDWDQLFUHODWHGls$DW5RGHIIHUVWDWHG WKDW5RELQKDGEHHQRUGHUHGWRJHWRXWRIKHUFDUKLWLQWKH (YHQ DVVXPLQJ WKDW 0DVRQ GLG KDYH FDXVH IRU IDLOLQJ WR EDFNRIWKHKHDGDQGWKHQmKXQJE\KHUQHFNZLWKDODUJHORJ UDLVH KLV %UDG\ DUJXPHQWV RQ GLUHFW DSSHDO ZH DUH QRW FKDLQl  s$ DW   $V WKH GLVWULFW FRXUW QRWHG WKLV SHUVXDGHG WKDW KH FDQ VKRZ SUHMXGLFH  7R REWDLQ UHOLHI GHVFULSWLRQ RI 5RELQjV LQMXULHV ZDV LQFRQVLVWHQW ZLWK KHU 0DVRQ mPXVW FRQYLQFH XV WKDW µWKHUH LV D UHDVRQDEOH DFWXDOLQMXULHV0DVRQ)6XSSGDW SUREDELOLW\j WKDW WKH UHVXOW RI WKH WULDO ZRXOG KDYH EHHQ GLIIHUHQWLIWKHVXSSUHVVHGGRFXPHQWVKDGEHHQGLVFORVHGWR $IWHUUHYLHZLQJ5RGHIIHUjVVWDWHPHQWVDQGWKHVXUURXQGLQJ WKHGHIHQVHl6WULFNOHUY*UHHQH86 FLUFXPVWDQFHV WKH GLVWULFW FRXUW FRQFOXGHG WKDW mLW VWUDLQV ,QH[DPLQLQJWKHVXSSUHVVHGHYLGHQFHZHPXVWDVNmZKHWKHU FUHGLELOLW\SDVWWKHEUHDNLQJSRLQWWRVXJJHVWWKDWWKHUHLVD WKHIDYRUDEOHHYLGHQFHFRXOGUHDVRQDEO\EHWDNHQWRSXWWKH UHDVRQDEOH SUREDELOLW\ 5RGHIIHUjV HYLGHQFH ZRXOG KDYH ZKROH FDVH LQ VXFK D GLIIHUHQW OLJKW DV WR XQGHUPLQH SURGXFHGDGLIIHUHQWYHUGLFWl0DVRQ)6XSSGDW FRQILGHQFHLQWKHYHUGLFWl,G DW TXRWDWLRQRPLWWHG 0DVRQ FRQWHQGV WKDW WKH GLVWULFW FRXUWjV GLVPLVVDO RI :H FRQFOXGH WKDW ZH FDQQRW DQVZHU WKLV TXHVWLRQ LQ WKH 5RGHIIHUjV VWDWHPHQWV DPRXQWHG WR mDQ LPSHUPLVVLEOH DIILUPDWLYH FUHGLELOLW\GHWHUPLQDWLRQWKDWLVQRWVXSSRUWHGE\WKHHYLGHQFH DQG>@PRUHLPSRUWDQWO\LVQRWDIDFWRUSURSHUO\FRQVLGHUHGLQ 0DVRQGHVFULEHVWKUHHJHQHUDOFDWHJRULHVRIHYLGHQFHWKDW DQDO\]LQJ D %UDG\ YLRODWLRQl  3HWLWLRQHUjV %U DW   :H ZDVDOOHJHGO\ZLWKKHOGIURPKLVGHIHQVHVWDWHPHQWVPDGH GLVDJUHH%DJOH\LQVWUXFWVFRXUWVWRUHPHG\D%UDG\YLRODWLRQ E\ 5REHUW 5RGHIIHU m5RGHIIHUl WR SROLFH DQG PHGLFDO RQO\ LI WKH XQGLVFORVHG HYLGHQFH SUHVHQWV D UHDVRQDEOH SHUVRQQHO WKDW KH KDG EHHQ SUHVHQW DW 5RELQjV PXUGHU SUREDELOLW\RIDGLIIHUHQWUHVXOWDWWULDO%DJOH\86DW  H[FXOSDWRU\ VWDWHPHQWV PDGH E\ 0LFKDHO DQG &DURO\Q ,WZDVWKXVSURSHUIRUWKHGLVWULFWFRXUWWRFRQVLGHUWKH