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$5< & 0&.(1=,( ; 3ODLQWLII$SSHOODQW 1R Y ! %(//6287+ 7(/(&20081,&$7,216 ,1& GED6RXWK&HQWUDO%HOO 7HOHSKRQH&RPSDQ\ 'HIHQGDQW$SSHOOHH 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH 1Rn5$OODQ(GJDU&KLHI'LVWULFWsXGJH $UJXHG0DUFK 'HFLGHGDQG)LOHGsXO\ %HIRUH1255,60225(DQG&2/(&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('/HRQDUG(JDQ:DVKLQJWRQ'&IRU$SSHOODQW $UWKXU * 6H\PRXU sU )5$17= 0F&211(// 6(<0285 .QR[YLOOH 7HQQHVVHH IRU $SSHOOHH 21%5,()/HRQDUG(JDQ:DVKLQJWRQ'&6WHSKHQ5
0F.HQ]LHY%HOO6RXWK 1R 7HOHFRPPXQLFDWLRQV,QF
)HOVRQ )(/621 )(/621 &LQFLQQDWL 2KLR IRU $SSHOODQW$UWKXU*6H\PRXUsU)5$17=0F&211(// 6(<0285 .QR[YLOOH 7HQQHVVHH )UHG $ :DOWHUV %(//6287+7(/(&20081,&$7,216,1&$WODQWD *HRUJLDIRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 5 *8< &2/( s5 &LUFXLW sXGJH 3ODLQWLII$SSHOODQW 0DU\0F.HQ]LHDSSHDOVWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\ M XGJPHQW IRU 'HIHQGDQW$SSHOOHH %HOO6 R X W K 7HOHFRPPXQLFDWLRQV,QFm%HOO6RXWKlLQKHUDFWLRQDOOHJLQJ WKDW%HOO6RXWKKDUDVVHGDQGGLVFKDUJHGKHULQYLRODWLRQRIWKH TXL WDP SURYLVLRQV RI WKH )DOVH &ODLPV $FW m)&$l 86&6HFWLRQKRIWKH)&$SURKLELWV UHWDOLDWLRQDJDLQVWHPSOR\HHVHQJDJHGLQWKHSURWHFWHGDFWLYLW\ RI LQYHVWLJDWLQJ SRVVLEOH IUDXG DJDLQVW WKH 8QLWHG 6WDWHV JRYHUQPHQW0F.HQ]LHjVKUHWDOLDWLRQFODLPZDVRQH SDUW RI KHU RULJLQDO TXL WDP DFWLRQ DOOHJLQJ WKDW %HOO6RXWK FRPPLWWHGIUDXGDJDLQVWWKH8QLWHG6WDWHVJRYHUQPHQW$IWHU WKHGLVWULFWFRXUWGLVPLVVHG0F.HQ]LHjVTXLWDPDFWLRQZKLFK ZHVXEVHTXHQWO\DIILUPHGLQSDUWDQGUHPDQGHGLQSDUWIRU IXUWKHU SURFHHGLQJV RQ WKH K UHWDOLDWLRQ FODLP WKH GLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQWIRU%HOO6RXWKRQWKH
$ TXL WDP DFWLRQ LV D ZKLVWOHEORZHU FODLP
EURXJKW E\ DQ LQIRUPHU XQGHU D VWDWXWH ZKLFK HVWDEOLVKHV D SHQDOW\ IRU WKH FRPPLVVLRQ RU RPLVVLRQ RI D FHUWDLQ DFW DQG SURYLGHV WKDW WKH VDPH VKDOO EH UHFRYHUDEOH LQ D FLYLO DFWLRQ SDUW RI WKH SHQDOW\ WR JR WR DQ\ SHUVRQ ZKR ZLOO EULQJ VXFK DFWLRQ DQG WKH UHPDLQGHU WR JR WR WKH VWDWH RU VRPH RWKHU LQVWLWXWLRQ
% /$&. 6 $: ,&7,21$5< j / ' WK HG 4XL WDP LV GHULYHG IURP WKH m/DWLQ SKUDVH µTXL WDP SUR GRPLQR UHJH TXDP SUR VL LSVR LQ KDF SDUWH VHTXLWHUj PHDQLQJ µ:KR VXHV RQ EHKDOI RI WKH .LQJ DV ZHOO DV IRU KLPVHOIjl ,G 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
,9&21&/86,21 UHWDOLDWLRQFODLP1RZ0F.HQ]LHDSSHDOVWKHGLVWULFWFRXUWjV JUDQWRIVXPPDU\MXGJPHQWIRU%HOO6RXWKFRQWHQGLQJWKDW :H $)),50 WKH GLVWULFW FRXUWjV JUDQW RI VXPPDU\ VXIILFLHQW HYLGHQFH H[LVWHG WR HVWDEOLVK WKDW %HOO6RXWK ZDV MXGJPHQWIRU%HOO6RXWKILQGLQJWKDW0F.HQ]LHKDVIDLOHGWR DZDUHWKDWVKHZDVFRQWHPSODWLQJDTXLWDPVXLWXQGHUWKH VHW IRUWK JHQXLQH LVVXHV RI PDWHULDO IDFW ZLWK UHVSHFW WR )&$DVUHTXLUHGE\K %HOO6RXWKjVDZDUHQHVVWKDWVKHZDVHQJDJHGLQDFWLYLW\ZKLFK UHDVRQDEO\FRXOGOHDGWRDTXLWDPDFWLRQXQGHUWKH)&$RU )RUWKHIROORZLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUWjV WKDWVKHZDVFRQWHPSODWLQJVXFKDQDFWLRQ JUDQWRIVXPPDU\MXGJPHQWIRU%HOO6RXWK ,%$&.*5281' 7KHIDFWVGHYHORSHGLQRXUSULRUGHFLVLRQLQWKLVPDWWHUDUH QRW GLVSXWHG E\ HLWKHU 0F.HQ]LH RU %HOO6RXWK ,Q 0F.HQ]LHjVSULRUDSSHDOZHVWDWHG 0F.HQ]LHZDVDQHPSOR\HHRI%HOO6RXWKjVVXEVLGLDU\ 6RXWK &HQWUDO %HOO IURP 'HFHPEHU XQWLO 0DUFK ZKHQVKHOHIWZRUNRQSHUPDQHQWGLVDELOLW\VWDWXV )RUPRVWRIKHUFDUHHUDW>%HOO6RXWK@0F.HQ]LHZDVD GLVSDWFKHUIRUWKHFRPSDQ\jVPDLQWHQDQFHWHFKQLFLDQV 7KLV SRVLWLRQ LQFOXGHG UHFHLYLQJ DQG SURFHVVLQJ FRPSODLQWVDERXWWHOHSKRQHVHUYLFHGLVSDWFKLQJUHSDLU SHUVRQQHO DQG FORVLQJ WKHVH mWURXEOH UHSRUWVl RQFH UHSDLUVZHUHFRPSOHWHG >%HOO6RXWK@ SURYLGHV WHOHSKRQH VHUYLFH WKURXJKRXW 7HQQHVVHH .HQWXFN\ $ODEDPD 0LVVLVVLSSL DQG /RXLVLDQDDQGLWVFXVWRPHUVLQFOXGHWKH7HQQHVVHH9DOOH\ $XWKRULW\ DQG D 'HSDUWPHQW RI (QHUJ\ IDFLOLW\ DW 2DN 5LGJH 7HQQHVVHH ERWK IHGHUDO IDFLOLWLHV :KHQ D WHOHSKRQHOLQHLVRXWRIVHUYLFHIRUPRUHWKDQKRXUV >%HOO6RXWK@PXVWUHIXQGWKHFRVWRIWKDWGD\jVVHUYLFHIRU WKRVH FXVWRPHUV ZKR UHTXHVW D UHIXQG H[FHSW LQ WKH IROORZLQJFLUFXPVWDQFHVVHUYLFHLVGLPLQLVKHGEXWWKH OLQH LV QRW FRPSOHWHO\ RXW RI VHUYLFH UHSDLUV DUH LPSRVVLEOH EHFDXVH WKH FXVWRPHUjV SUHPLVHV DUH LQDFFHVVLEOHWKHFRQGLWLRQLVUHSRUWHGE\DQHPSOR\HH DQG QRW WKH FXVWRPHU DQG WKH FXVWRPHU H[WHQGV WKH SHULRGRIWLPHIRUUHSDLUVWREHFRPSOHWHG 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
$FFRUGLQJWR0F.HQ]LHj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o LQLWLDWHG E\ D >%HOO6RXWK@ HPSOR\HH ZKHQ WKH\ ZHUH EHFDXVH WKH HYLGHQFH VKRZV WKDW KHU DFWLYLWLHV ZHUH QRW DFWXDOO\LQLWLDWHGE\WKHFXVWRPHU SURWHFWHG XQGHU WKH $FW :LWKRXW DGGLWLRQDO HYLGHQFH WR 0F.HQ]LH EHJDQ FRPSODLQLQJ WR KHU VXSHUYLVRUV DW HVWDEOLVKWKDW%HOO6RXWKPD\KDYHEHHQSODFHGRQQRWLFHWKDW >
Free access — add to your briefcase to read the full text and ask questions with AI
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$5< & 0&.(1=,( ; 3ODLQWLII$SSHOODQW 1R Y ! %(//6287+ 7(/(&20081,&$7,216 ,1& GED6RXWK&HQWUDO%HOO 7HOHSKRQH&RPSDQ\ 'HIHQGDQW$SSHOOHH 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH 1Rn5$OODQ(GJDU&KLHI'LVWULFWsXGJH $UJXHG0DUFK 'HFLGHGDQG)LOHGsXO\ %HIRUH1255,60225(DQG&2/(&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('/HRQDUG(JDQ:DVKLQJWRQ'&IRU$SSHOODQW $UWKXU * 6H\PRXU sU )5$17= 0F&211(// 6(<0285 .QR[YLOOH 7HQQHVVHH IRU $SSHOOHH 21%5,()/HRQDUG(JDQ:DVKLQJWRQ'&6WHSKHQ5
0F.HQ]LHY%HOO6RXWK 1R 7HOHFRPPXQLFDWLRQV,QF
)HOVRQ )(/621 )(/621 &LQFLQQDWL 2KLR IRU $SSHOODQW$UWKXU*6H\PRXUsU)5$17=0F&211(// 6(<0285 .QR[YLOOH 7HQQHVVHH )UHG $ :DOWHUV %(//6287+7(/(&20081,&$7,216,1&$WODQWD *HRUJLDIRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 5 *8< &2/( s5 &LUFXLW sXGJH 3ODLQWLII$SSHOODQW 0DU\0F.HQ]LHDSSHDOVWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\ M XGJPHQW IRU 'HIHQGDQW$SSHOOHH %HOO6 R X W K 7HOHFRPPXQLFDWLRQV,QFm%HOO6RXWKlLQKHUDFWLRQDOOHJLQJ WKDW%HOO6RXWKKDUDVVHGDQGGLVFKDUJHGKHULQYLRODWLRQRIWKH TXL WDP SURYLVLRQV RI WKH )DOVH &ODLPV $FW m)&$l 86&6HFWLRQKRIWKH)&$SURKLELWV UHWDOLDWLRQDJDLQVWHPSOR\HHVHQJDJHGLQWKHSURWHFWHGDFWLYLW\ RI LQYHVWLJDWLQJ SRVVLEOH IUDXG DJDLQVW WKH 8QLWHG 6WDWHV JRYHUQPHQW0F.HQ]LHjVKUHWDOLDWLRQFODLPZDVRQH SDUW RI KHU RULJLQDO TXL WDP DFWLRQ DOOHJLQJ WKDW %HOO6RXWK FRPPLWWHGIUDXGDJDLQVWWKH8QLWHG6WDWHVJRYHUQPHQW$IWHU WKHGLVWULFWFRXUWGLVPLVVHG0F.HQ]LHjVTXLWDPDFWLRQZKLFK ZHVXEVHTXHQWO\DIILUPHGLQSDUWDQGUHPDQGHGLQSDUWIRU IXUWKHU SURFHHGLQJV RQ WKH K UHWDOLDWLRQ FODLP WKH GLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQWIRU%HOO6RXWKRQWKH
$ TXL WDP DFWLRQ LV D ZKLVWOHEORZHU FODLP
EURXJKW E\ DQ LQIRUPHU XQGHU D VWDWXWH ZKLFK HVWDEOLVKHV D SHQDOW\ IRU WKH FRPPLVVLRQ RU RPLVVLRQ RI D FHUWDLQ DFW DQG SURYLGHV WKDW WKH VDPH VKDOO EH UHFRYHUDEOH LQ D FLYLO DFWLRQ SDUW RI WKH SHQDOW\ WR JR WR DQ\ SHUVRQ ZKR ZLOO EULQJ VXFK DFWLRQ DQG WKH UHPDLQGHU WR JR WR WKH VWDWH RU VRPH RWKHU LQVWLWXWLRQ
% /$&. 6 $: ,&7,21$5< j / ' WK HG 4XL WDP LV GHULYHG IURP WKH m/DWLQ SKUDVH µTXL WDP SUR GRPLQR UHJH TXDP SUR VL LSVR LQ KDF SDUWH VHTXLWHUj PHDQLQJ µ:KR VXHV RQ EHKDOI RI WKH .LQJ DV ZHOO DV IRU KLPVHOIjl ,G 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
,9&21&/86,21 UHWDOLDWLRQFODLP1RZ0F.HQ]LHDSSHDOVWKHGLVWULFWFRXUWjV JUDQWRIVXPPDU\MXGJPHQWIRU%HOO6RXWKFRQWHQGLQJWKDW :H $)),50 WKH GLVWULFW FRXUWjV JUDQW RI VXPPDU\ VXIILFLHQW HYLGHQFH H[LVWHG WR HVWDEOLVK WKDW %HOO6RXWK ZDV MXGJPHQWIRU%HOO6RXWKILQGLQJWKDW0F.HQ]LHKDVIDLOHGWR DZDUHWKDWVKHZDVFRQWHPSODWLQJDTXLWDPVXLWXQGHUWKH VHW IRUWK JHQXLQH LVVXHV RI PDWHULDO IDFW ZLWK UHVSHFW WR )&$DVUHTXLUHGE\K %HOO6RXWKjVDZDUHQHVVWKDWVKHZDVHQJDJHGLQDFWLYLW\ZKLFK UHDVRQDEO\FRXOGOHDGWRDTXLWDPDFWLRQXQGHUWKH)&$RU )RUWKHIROORZLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUWjV WKDWVKHZDVFRQWHPSODWLQJVXFKDQDFWLRQ JUDQWRIVXPPDU\MXGJPHQWIRU%HOO6RXWK ,%$&.*5281' 7KHIDFWVGHYHORSHGLQRXUSULRUGHFLVLRQLQWKLVPDWWHUDUH QRW GLVSXWHG E\ HLWKHU 0F.HQ]LH RU %HOO6RXWK ,Q 0F.HQ]LHjVSULRUDSSHDOZHVWDWHG 0F.HQ]LHZDVDQHPSOR\HHRI%HOO6RXWKjVVXEVLGLDU\ 6RXWK &HQWUDO %HOO IURP 'HFHPEHU XQWLO 0DUFK ZKHQVKHOHIWZRUNRQSHUPDQHQWGLVDELOLW\VWDWXV )RUPRVWRIKHUFDUHHUDW>%HOO6RXWK@0F.HQ]LHZDVD GLVSDWFKHUIRUWKHFRPSDQ\jVPDLQWHQDQFHWHFKQLFLDQV 7KLV SRVLWLRQ LQFOXGHG UHFHLYLQJ DQG SURFHVVLQJ FRPSODLQWVDERXWWHOHSKRQHVHUYLFHGLVSDWFKLQJUHSDLU SHUVRQQHO DQG FORVLQJ WKHVH mWURXEOH UHSRUWVl RQFH UHSDLUVZHUHFRPSOHWHG >%HOO6RXWK@ SURYLGHV WHOHSKRQH VHUYLFH WKURXJKRXW 7HQQHVVHH .HQWXFN\ $ODEDPD 0LVVLVVLSSL DQG /RXLVLDQDDQGLWVFXVWRPHUVLQFOXGHWKH7HQQHVVHH9DOOH\ $XWKRULW\ DQG D 'HSDUWPHQW RI (QHUJ\ IDFLOLW\ DW 2DN 5LGJH 7HQQHVVHH ERWK IHGHUDO IDFLOLWLHV :KHQ D WHOHSKRQHOLQHLVRXWRIVHUYLFHIRUPRUHWKDQKRXUV >%HOO6RXWK@PXVWUHIXQGWKHFRVWRIWKDWGD\jVVHUYLFHIRU WKRVH FXVWRPHUV ZKR UHTXHVW D UHIXQG H[FHSW LQ WKH IROORZLQJFLUFXPVWDQFHVVHUYLFHLVGLPLQLVKHGEXWWKH OLQH LV QRW FRPSOHWHO\ RXW RI VHUYLFH UHSDLUV DUH LPSRVVLEOH EHFDXVH WKH FXVWRPHUjV SUHPLVHV DUH LQDFFHVVLEOHWKHFRQGLWLRQLVUHSRUWHGE\DQHPSOR\HH DQG QRW WKH FXVWRPHU DQG WKH FXVWRPHU H[WHQGV WKH SHULRGRIWLPHIRUUHSDLUVWREHFRPSOHWHG 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
$FFRUGLQJWR0F.HQ]LHj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o LQLWLDWHG E\ D >%HOO6RXWK@ HPSOR\HH ZKHQ WKH\ ZHUH EHFDXVH WKH HYLGHQFH VKRZV WKDW KHU DFWLYLWLHV ZHUH QRW DFWXDOO\LQLWLDWHGE\WKHFXVWRPHU SURWHFWHG XQGHU WKH $FW :LWKRXW DGGLWLRQDO HYLGHQFH WR 0F.HQ]LH EHJDQ FRPSODLQLQJ WR KHU VXSHUYLVRUV DW HVWDEOLVKWKDW%HOO6RXWKPD\KDYHEHHQSODFHGRQQRWLFHWKDW >%HOO6RXWK@DERXWWKHVHSUDFWLFHVLQDQGFRQWLQXHG 0F.HQ]LHjVFRPSODLQWVFRXOGUHDVRQDEO\OHDGWRDTXLWDP WRFRPSODLQXQWLOVKHOHIWKHUSRVLWLRQRQGLVDELOLW\VWDWXV DFWLRQ0F.HQ]LHKDVIDLOHGWRHVWDEOLVKDIDFWXDOLVVXHZLWK 2Q RQH RFFDVLRQ 0F.HQ]LH VKRZHG KHU VXSHUYLVRU D UHVSHFW WR %HOO6RXWKjV DZDUHQHVV WKDW KHU DFWLRQV ZHUH QHZVSDSHU DUWLFOH GHVFULELQJ D VLPLODU IUDXG EHLQJ SURWHFWHG:HILQGWKDW0F.HQ]LHKDVSURYLGHGQRHYLGHQFH SHUSHWUDWHGLQ)ORULGD0F.HQ]LHFODLPVWKDWDVDUHVXOW UDLVLQJDJHQXLQHLVVXHRIPDWHULDOIDFWWKDW%HOO6RXWKZDV RIKHUFRPSODLQWVVKHZDVKDUDVVHGDQGWKUHDWHQHGZLWK SODFHGRQQRWLFHWKDWVKHZDVFRQWHPSODWLQJDFODLPXQGHUWKH GLVFKDUJH$IWHUVXIIHULQJWZRHPRWLRQDOEUHDNGRZQVD )&$RUDOOHJDWLRQVRIIHGHUDOJRYHUQPHQWIUDXG FRPSDQ\ SV\FKLDWULVW SODFHG 0F.HQ]LH RQ SHUPDQHQW GLVDELOLW\OHDYH 'LVFKDUJHmEHFDXVHRIl3ODLQWLIIjV3URWHFWHG$FWLYLW\ 0F.HQ]LH ILOHG VXLW XQGHU WKH )&$ ZKLFK DOORZV LQGLYLGXDOVZLWKLQIRUPDWLRQUHJDUGLQJWKHFRPPLVVLRQ 7KHGLVWULFWFRXUWFRQFOXGHGWKDWWKHUHZDVQRJHQXLQHLVVXH RI IUDXG DJDLQVW WKH 8QLWHG 6WDWHV WR EULQJ VXLW RQ WKH RIPDWHULDOIDFWGHPRQVWUDWLQJWKDW0F.HQ]LHjVGLVFKDUJHZDV JRYHUQPHQW V EHKDOI 0F.HQ]LH DOVR EURXJKW D EHFDXVH RI DFWLYLWLHV ZKLFK WKH HPSOR\HU KDG UHDVRQ WR UHWDOLDWLRQ FODLP RQ KHU RZQ EHKDOI XQGHU 86& EHOLHYH ZHUH WDNHQ LQ FRQWHPSODWLRQ RI D TXL WDP DFWLRQ K DJDLQVWWKHHPSOR\HU7KH)&$jVOHJLVODWLYHKLVWRU\VWDWHV WKDW WKH HPSOR\HH PXVW VKRZ WKDW mWKH UHWDOLDWLRQ ZDV 8QLWHG6WDWHVH[UHO0F.HQ]LHY%HOO6RXWK7HOHFRPP,QF PRWLYDWHG DW OHDVW LQ SDUW E\ WKH HPSOR\HHjV HQJDJLQJ LQ )G WK &LU IRRWQRWHV RPLWWHG SURWHFWHGDFWLYLW\l6 5! 1 DWUHSULQWHGLQ FHUWGHQLHG86 86&&$1DW0F.HQ]LHKDVIDLOHGWRVKRZ WKDWKHUGLVFKDUJHZDVmEHFDXVHRIlWKHSURWHFWHGDFWLYLW\RU 7KHGLVWULFWFRXUWGLVPLVVHG0F.HQ]LHjVTXLWDPDFWLRQ WKDW %HOO6RXWK ZDV DZDUH RI KHU mSURWHFWHG DFWLYLW\l DQG ILQGLQJ WKDW 0F.HQ]LH IDLOHG WR VWDWH D YDOLG FODLP 2Q WKXV%HOO6RXWKjVWHUPLQDWLRQRI0F.HQ]LHFRXOGQRWKDYH DSSHDOWKLVFRXUWDIILUPHGWKHGLVWULFWFRXUWjVGLVPLVVDORIWKH EHHQPRWLYDWHGE\KHUSURWHFWHGDFWLYLW\$FFRUGLQJO\WKH TXL WDP DFWLRQ EXW UHYHUVHG DQG UHPDQGHG WKH K GLVWULFWFRXUWFRUUHFWO\JUDQWHGVXPPDU\MXGJPHQWLQIDYRURI UHWDOLDWLRQFODLP6HHLG)GDW)LQGLQJWKDW %HOO6RXWKRQ0F.HQ]LHjVKUHWDOLDWLRQFODLP 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
E\ WKH VWDWH RI )ORULGD GLG QRW FUHDWH D JHQXLQH LVVXH RI 0F.HQ]LHjV FRPSODLQW KDG mDGHTXDWHO\ DOOHJHG WKDW KHU PDWHULDOIDFWUHJDUGLQJDmUHDVRQDEOHSRVVLELOLW\lRIDTXLWDP HPSOR\HUZDVDZDUHWKDWVKHZDVFRQWHPSODWLQJSXUVXLQJD DFWLRQSXUVXDQWWRWKH)&$ TXL WDP DFWLRQ XQGHU WKH )&$l DQG WKXV KDG VXIILFLHQWO\ VWDWHGDFODLPIRUUHWDOLDWLRQXQGHUKRIWKH)&$WKLV (PSOR\HUjV .QRZOHGJH RI WKH (PSOR\HHjV FRXUWUHPDQGHGWKHUHWDOLDWLRQFODLPIRUIXUWKHUGLVFRYHU\,G 3URWHFWHG$FWLYLW\ DW ,Q0F.HQ]LHWKLVFRXUWDGRSWHGWKHGLVWULFWFRXUWjVKROGLQJ 2Q UHPDQG WKH SDUWLHV SURGXFHG DGGLWLRQDO HYLGHQFH LQ0LNHVZKLFKUHTXLUHGWKHIROORZLQJ XQGHUO\LQJ 0F.HQ]LHjV UHWDOLDWLRQ FODLPV 7KH DGGLWLRQDO HYLGHQFHFRQVLVWHGRIGHSRVLWLRQVIURP0F.HQ]LHDQGKHU $QHPSOR\HHPXVWVXSSO\VXIILFLHQWIDFWVIURPZKLFKD KXVEDQG FRQFHUQLQJ KHU UHWDOLDWLRQ DOOHJDWLRQV DQG WKH UHDVRQDEOH MXU\FRXOGFRQFOXGHWKDWWKHHPSOR\HHZDV 0LDPL +HUDOG QHZVSDSHU DUWLFOH GHVFULEHG LQ 0F.HQ]LHjV GLVFKDUJHGEHFDXVHRIDFWLYLWLHVZKLFKJDYHWKHHPSOR\HU FRPSODLQW %DVHG RQ WKLV HYLGHQFH %HOO6RXWK PRYHG IRU UHDVRQWREHOLHYHWKDWWKHHPSOR\HHZDVFRQWHPSODWLQJD VXPPDU\MXGJPHQW2Q0DUFKWKHGLVWULFWFRXUW TXLWDPDFWLRQDJDLQVWLW JUDQWHG VXPPDU\ MXGJPHQW IRU %HOO6RXWK ILQGLQJ WKDW 0F.HQ]LHSURYLGHGQRHYLGHQFHWKDWmDGHTXDWHO\DOOHJHGWKDW 0F.HQ]LH)GDWTXRWLQJ0LNHV)6XSSDW KHUHPSOR\HUZDVDZDUHWKDWVKHZDVFRQWHPSODWLQJSXUVXLQJ D TXL WDP DFWLRQ XQGHU WKH )&$l 0F.HQ]LH DSSHDOV WKH GLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQWIRU%HOO6RXWK (YHQDVVXPLQJWKDW0F.HQ]LHHQJDJHGLQSURWHFWHGDFWLYLW\ E\KHUUHIXVDOWRIDOVLI\UHSDLUUHFRUGVWKHUHLVQRHYLGHQFH ,,67$1'$5'2)5(9,(: WKDW%HOO6RXWKKDGUHDVRQWREHOLHYHDTXLWDPDFWLRQZDVD mGLVWLQFW SRVVLELOLW\l RU ZDV EHLQJ mFRQWHPSODWHGl E\ :H UHYLHZ GH QRYR D GLVWULFW FRXUWjV JUDQW RI VXPPDU\ 0F.HQ]LH7KHQHZVSDSHUDUWLFOH0F.HQ]LHDOOHJHVSODFHG MXGJPHQWXVLQJWKHVDPH)HG5&LY3FVWDQGDUGDVWKH %HOO6RXWKRQQRWLFHRIDVLPLODUTXLWDPDFWLRQSXUVXHGLQ GLVWULFWFRXUW6HH*RGIUHGVRQY+HVV &ODUN,QF )ORULGDGLGQRWUHODWHWRDTXLWDPDFWLRQDQGRQO\GLVFXVVHG DFRQVXPHUIUDXGLQYHVWLJDWLRQE\WKH)ORULGDVWDWHDWWRUQH\ JHQHUDO DQG IRXU )ORULGD DGPLQLVWUDWLYH DJHQFLHV ,W LV QRW 3DUDJUDSK RI 0F.HQ]LHjV FRPSODLQW VWDWHG WKDW QHFHVVDU\ WKDW 0F.HQ]LH NQRZ WKH SDUWLFXODUV RI DQ )&$ DFWLRQRUTXLWDPSRVVLELOLW\RUXVHDSSURSULDWHODQJXDJHZKHQ 2Q RU DERXW sDQXDU\ 0V 0F.HQ]LH UHIXVHG WR
LQWHUQDOO\UHSRUWLQJZURQJGRLQJEXWVKHPXVWVHWIRUWKVRPH IDOVLI\ D 7URXEOH 5HSRUW IRU D UHSDLU WHFKQLFLDQ QDPHG :DWVRQ
FRQQHFWLRQWRIUDXGXOHQWRUIDOVHFODLPVDJDLQVWWKHIHGHUDO ZKR KDG PLVVHG D UHSDLU FRPPLWPHQW :DWVRQ DVNHG 0V
JRYHUQPHQW,Q
KLVSURWHFWHGDFWLYLW\0HUHO\JUXPEOLQJWRWKHHPSOR\HU KDQGOH WKH FDOO 0V 0F.HQ]LH WROG 0V &UXP WKDW WR IDOVLI\ WKH
DERXWMREGLVVDWLVIDFWLRQRUUHJXODWRU\YLRODWLRQVGRHVQRW UHFRUGV ZDV D VHULRXV PDWWHU 0V 0F.HQ]LH DOVR VKRZHG 0V
VDWLVI\ WKH UHTXLUHPHQW o MXVW DV LW GRHV QRW FRQVWLWXWH &UXP D FRS\ RI D QHZVSDSHU DUWLFOH DERXW D VLPLODU IUDXG EHLQJ
SURWHFWHGDFWLYLW\LQWKHILUVWSODFH7KUHDWHQLQJWRILOHD SHUSHWXDWHG LQ )ORULGD
TXLWDPVXLWRUWRPDNHDUHSRUWWRWKHJRYHUQPHQWLVRQH s$ DW 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
)G WK &LU 6XPPDU\ MXGJPHQW LV QHZVSDSHUDUWLFOHGHVFULELQJDVLPLODUTXLWDPFODLPRUIUDXG DSSURSULDWH ZKHQ mWKH SOHDGLQJV GHSRVLWLRQV DQVZHUV WR DJDLQVWWKHIHGHUDOJRYHUQPHQW0F.HQ]LHjVDOOHJHGSURWHFWHG LQWHUURJDWRULHV DQG DGPLVVLRQV RQ ILOH WRJHWKHU ZLWK WKH DFWLYLWLHVFRQVLVWHGRIUHIXVLQJWRIDOVLI\UHFRUGVZKLFKVKH DIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\ NQHZ ZHUH LQWHUQDO UHFRUGV XVHG WR GHWHUPLQH UHIXQGV IRU PDWHULDO IDFW DQG WKDW WKH PRYLQJ SDUW\ LV HQWLWOHG WR D %HOO6RXWK FXVWRPHUV $OWKRXJK 0F.HQ]LHjV GHSRVLWLRQ MXGJPHQWDVDPDWWHURIODZl)HG5&LY3F$FRXUW WHVWLPRQ\ VKRZV WKDW VKH NQHZ WKHVH UHIXQGV LQFOXGHG PXVWYLHZWKHHYLGHQFHDQGGUDZDOOUHDVRQDEOHLQIHUHQFHVLQ JRYHUQPHQWDQGFRQVXPHU%HOO6RXWKFXVWRPHUVWKH\GRQRW IDYRURIWKHQRQPRYLQJSDUW\6HH0DWVXVKLWD(OHF,QGXV HVWDEOLVKWKHQHFHVVDU\QH[XVWRDSRWHQWLDO)&$EDVHGTXL &RY=HQLWK5DGLR&RUS867KH WDP DFWLRQ $VVXPLQJ WKDW 0F.HQ]LHjV IDOVLILFDWLRQ PRYLQJSDUW\EHDUVWKHLQLWLDOEXUGHQRIGHPRQVWUDWLQJ WKH FRPSODLQWV KDYH PHULW DQG WKDW VKH XQGHUVWRRG WKDW DEVHQFHRIDJHQXLQHLVVXHRIPDWHULDOIDFW6HH&HORWH[&RUS %HOO6RXWKj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s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mSURWHFWHG DFWLYLW\l XQGHU K$OWKRXJKLQWHUQDOUHSRUWLQJRIVXVSHFWHGIUDXGRU $/DZRIWKH&DVH IDOVHFODLPVFDQIRUPWKHEDVLVRImSURWHFWHGDFWLYLW\lXQGHU WKH $FW WKH LQWHUQDO UHSRUWLQJ RI ZURQJGRLQJ VXFK DV $V D WKUHVKROG DUJXPHQW 0F.HQ]LH FRQWHQGV WKDW WKH 0F.HQ]LHjVFRPSODLQWVWR%HOO6RXWKDXGLWRUVPXVWHVWDEOLVK GLVWULFWFRXUWDQGWKLVFRXUWDUHERXQGE\WKHODZRIWKHFDVH VRPH QH[XV WR WKH )&$ WR VDWLVI\ WKH mLQ IXUWKHUDQFH RIl GRFWULQHZKLFKSUHFOXGHVUHFRQVLGHUDWLRQRILVVXHVGHFLGHGDW SURQJ RI DQ )&$ FODLP E\ UHDVRQDEO\ OHDGLQJ WR D YLDEOH DQHDUOLHUVWDJHRIWKHFDVH6HH8QLWHG6WDWHVY0RRUHG )&$DFWLRQ6HH
,W LV FOHDU WKDW ZKHQ D FDVH KDV EHHQ UHPDQGHG E\ DQ ,Q VXP ZH ILQG WKDW 0F.HQ]LHjV FRPSODLQWV DERXW DSSHOODWH FRXUW WKH WULDO FRXUW LV ERXQG WR mSURFHHG LQ IDOVLILFDWLRQRI%HOO6RXWKjVUHSDLUUHFRUGVDQGGLVWULEXWLRQRI DFFRUGDQFH ZLWK WKH PDQGDWH DQG ODZ RI WKH FDVH DV HVWDEOLVKHG DQHZVSDSHUDUWLFOHJHQHUDOO\GHVFULELQJDIUDXGLQYHVWLJDWLRQ E\ WKH DSSHOODWH FRXUWl 7KH mODZ RI WKH FDVHl GRFWULQH 0F.HQ]LHY%HOO6RXWK 1R 1R 0F.HQ]LHY%HOO6RXWK 7HOHFRPPXQLFDWLRQV,QF 7HOHFRPPXQLFDWLRQV,QF
UHJXODWLRQVEXWGHWDLOLQJIUDXGXOHQWSUDFWLFHV6HHD@VZLWKDOO VXSHUYLVRUV6HH(EHUKDUGW)GDWKROGLQJWKDW DSSOLFDWLRQV RI WKH ODZRIWKHFDVH GRFWULQH WKH WULDO FRXUW PHUHO\ UHSRUWLQJ FRQFHUQV RI PLVFKDUJLQJ D JRYHUQPHQW PD\FRQVLGHUWKRVHLVVXHVQRWGHFLGHGH[SUHVVO\RULPSOLHGO\ SURMHFWRULQYHVWLJDWLQJDQHPSOR\HUjVQRQFRPSOLDQFHZLWK E\WKHDSSHOODWHFRXUWRUDSUHYLRXVWULDOFRXUWl,GFLWLQJ IHGHUDO RU VWDWH UHJXODWLRQV ZDV LQVXIILFLHQW WR FRQVWLWXWH 4XHUQYsRUGDQ86Q 7KXVZH mSURWHFWHGDFWLYLW\lXQGHUWKH)&$=DKRGQLFN)GDW PXVW FRQVLGHU WKLV FRXUWjV PDQGDWH WR WKH GLVWULFW FRXUW WR
,Q 0F.HQ]LH WKLV FRXUW VWDWHG WKDW mWKH GLVWULFW FRXUW 8QLWHG 6WDWHV H[ UHO 5DPVH\HU Y &HQWXU\ +HDOWKFDUH LPSURSHUO\ GLVPLVVHG 0F.HQ]LHjV FODLP IRU UHWDOLDWLRQ &RUS)GWK&LU1HDO)GDW EHFDXVH VKH DGHTXDWHO\ DOOHJHG WKDW KHU HPSOR\HU ZDV 7KXV ZH PXVW PDNH DQ LQTXLU\ LQWR ZKHWKHU DZDUHWKDWVKHZDVFRQWHPSODWLQJSXUVXLQJDTXLWDPDFWLRQ 0F.HQ]LHjVDFWLRQVVXIILFLHQWO\IXUWKHUHGmDQDFWLRQILOHGRU XQGHUWKH)&$l)GDW:HDOVRVWDWHGKRZHYHU WREHILOHGXQGHUlWKH)&$DQGWKXVHTXDWHGWRmSURWHFWHG WKDWm>G@LVFRYHU\VKDOOUHYHDOZKHWKHUWKHVHDOOHJDWLRQVFDQEH DFWLYLW\l VXSSRUWHGl ,G DW 7KXV ZH DFNQRZOHGJHG WKDW 0F.HQ]LHjV FDVH KDG EHHQ GLVPLVVHG IRU ODFN RI VXEMHFW ,QRUGHUWRGHIHDWVXPPDU\MXGJPHQW0F.HQ]LHPXVWUDLVH PDWWHUMXULVGLFWLRQSXUVXDQWWR5XOHE 6HHLGDW DJHQXLQHLVVXHRIPDWHULDOIDFWWKDWVKHHQJDJHGLQmSURWHFWHG :HIXUWKHUDFNQRZOHGJHGWKDWGLVFRYHU\ZRXOGGHYHORSWKH DFWLYLW\lGHILQHGDVWKDWDFWLYLW\ZKLFKUHDVRQDEO\FRXOGOHDG IDFWXDO DOOHJDWLRQV RI WKH FRPSODLQW 6HH LG DW WR D YLDEOH )&$ DFWLRQ 6HH
+RSSHU)GDWWK&LU&KLOGUHHY8$3*$ 86&K7RHVWDEOLVKDQDFWLRQXQGHUK $*&KHP,QF)GWK&LU1HDOY WKHSODLQWLIIPXVWSURYHVKHZDVHQJDJHGLQDSURWHFWHG +RQH\ZHOO ,QF )G WK &LU 7KHVH DFWLYLW\DQGWKDWKHUHPSOR\HUNQHZDERXWLW0F.HQ]LH FRXUWVLQWHUSUHWWKHmLQIXUWKHUDQFHRIlODQJXDJHWRUHTXLUHWKH )GDWFLWLQJ5REHUWVRQY%HOO+HOLFRSWHU7H[WURQ SODLQWLII WR EH mLQYHVWLJDWLQJ PDWWHUV WKDW UHDVRQDEO\ FRXOG ,QF)GWK&LUFHUWGHQLHG86 OHDGWRDYLDEOH)DOVH&ODLPV$FWFDVHlDIDOVH =DKRGQLFN Y ,QWHUQDWLRQDO %XV 0DFKV &RUS FODLPV@DFWLRQE\HLWKHUWKHHPSOR\HHRUWKHJRYHUQPHQWZDV )GWK&LU8QLWHG6WDWHVH[UHO+RSSHU D µGLVWLQFW SRVVLELOLW\j DW WKH WLPH WKH DVVLVWDQFH ZDV Y$QWRQ)GWK&LU UHQGHUHGl1HDO)GDWILQGLQJWKDWmOLWLJDWLRQZDV DGLVWLQFWSRVVLELOLW\lDWWKHWLPHRIWKHLQYHVWLJDWLRQZKHQWKH *LYHQWKHDGGLWLRQDOHYLGHQFHEHIRUHWKHFRXUWLQVXSSRUWRI SODLQWLIIUHSRUWHGZURQJGRLQJWKURXJKFRUSRUDWHFKDQQHOV KHUFRPSODLQW0F.HQ]LHFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHG LQILQGLQJWKDWKHUDFWLRQVZHUHQRWSURWHFWHGDFWLYLW\XQGHU 7KLVFDVHODZLQGLFDWHVWKDWmSURWHFWHGDFWLYLW\lUHTXLUHVD WKH )&$ ,Q UHVSRQVH %HOO6RXWK FRQWHQGV WKDW 0F.HQ]LH QH[XVZLWKWKHmLQIXUWKHUDQFHRIlSURQJRIDQ)&$DFWLRQ IDLOHGWRSURGXFHDQ\HYLGHQFHWKDWVKHHQJDJHGLQSURWHFWHG 6HH
WKDWmPD\EHFRQVLGHULQJH[SRVLQJIUDXGIURPUHWDOLDWRU\ UHTXLULQJ D WZR SDUW WHVW VHH 6XSS /XFNH\ Y %D[WHU +HDOWKFDUH &RUS ) G Q 1' ,OO GLVFXVVLQJ WZR HOHPHQW YHUVXV DFWVl7KHHQXPHUDWHGH[DPSOHVRImSURWHFWHGDFWLYLW\lLQ WKUHH HOHPHQW FRQVWUXFWLRQ RI )&$ UHWDOLDWLRQ FODLPV K LQGLFDWHV KmLQYHVWLJDWLRQIRULQLWLDWLRQRIWHVWLPRQ\IRURU WKDW D )&$ UHWDOLDWLRQ FODLP PXVW GHPRQVWUDWH WKDW WKH HPSOR\HH DVVLVWDQFH LQ DQ DFWLRQlDUH QRW H[KDXVWLYH KRZHYHU WKH HQJDJHG LQ mSURWHFWHG DFWLYLW\l ZKLFK LV mDFWV GRQH LQ IXUWKHUDQFH RI mSURWHFWHG DFWLYLW\l PXVW UHODWH WR mH[SRVLQJ IUDXGl RU DQ DFWLRQ XQGHU WKLV VHFWLRQl DQG WKH HPSOR\HH ZDV GLVFULPLQDWHG
mLQYROYHPHQWZLWKDIDOVHFODLPVGLVFORVXUHl6HHLG$Q DJDLQVW RU GLVFKDUJHG mEHFDXVH RIl WKDW SURWHFWHG DFLWLYLW\ 86& K 7KH mEHFDXVH RIl SURQJ KRZHYHU UHTXLUHV WKH HPSOR\HH WR HPSOR\HHKRZHYHUQHHGQRWH[SUHVVO\NQRZWKDWWKH)&$ VKRZ WKDW D mWKH HPSOR\HU KDG NQRZOHGJH WKH HPSOR\HH ZDV HQJDJHG LQ DOORZVTXLWDPDFWLRQVWREHILOHGDJDLQVWWKHLUHPSOR\HURU SURWHFWHG DFWLYLW\l DQG E mWKH UHWDOLDWLRQ ZDV PRWLYDWHG DW OHDVW LQ SDUW KDYH DOUHDG\ ILOHG VXFK DQ DFWLRQ WR EH SURWHFWHG IURP E\ WKH HPSOR\HHjV HQJDJLQJ LQ SURWHFWHG DFWLYLW\l 6 5 ! 1 UHWDOLDWLRQXQGHUK6HH&KLOGUHH)GDW DW UHSULQWHG LQ 86&&$1 DW VHH DOVR
3URWHFWHG$FWLYLW\ DQG GLVVHPLQDWHG WKURXJKRXW 0F.HQ]LHjV 7HQQHVVHH %HOO6RXWKRIILFH)URP0F.HQ]LHjVGHSRVLWLRQWHVWLPRQ\DQG ,Q 0F.HQ]LHjV ILUVW DSSHDO WKLV FRXUW IRXQG WKDW WKHQHZVSDSHUDUWLFOHWKHGLVWULFWFRXUWFRQFOXGHGWKDWWKHUH 0F.HQ]LHjVFRPSODLQWDGHTXDWHO\DOOHJHGWKDWVKHHQJDJHGLQ ZDV QR mSURWHFWHG DFWLYLW\l LQ VKRZLQJ WKH DUWLFOH WR KHU mSURWHFWHG DFWLYLW\l WDNLQJ WKH FRPSODLQWjV DOOHJDWLRQV DV VXSHUYLVRUVVRPHWLPHSULRUWR0F.HQ]LHjVUHIXVDOWRIDOVLI\ WUXH6HH0F.HQ]LH)GDWm:HFRQFOXGHWKDWWKH UHSDLUUHFRUGV DFWLYLW\ HQJDJHG LQ E\ 0F.HQ]LH LQFOXGLQJ EULQJLQJ WKH DOOHJHGIUDXGWRWKHDWWHQWLRQRIKHUVXSHUYLVRUVDQGVKRZLQJ 0F.HQ]LHFRQWHQGVWKDWWKHGLVWULFWFRXUWPLVFRQVWUXHGWKLV WKHP D QHZVSDSHU DUWLFOH GHVFULELQJ D TXL WDP DFWLRQ LQ FRXUWjVILQGLQJVDQGLJQRUHGWKLVFRXUWjVKROGLQJWKDWLQWHUQDO )ORULGDLQYROYLQJVLPLODUDOOHJDWLRQVRIIUDXGDUHSURWHFWHG UHSRUWLQJ RI IUDXG DORQH FRQVWLWXWHV SURWHFWHG DFWLYLW\ DFWLYLWLHV ZLWKLQ WKH PHDQLQJ RI WKH $FWl 7KH VWDWXWH 0F.HQ]LHDYHUVWKDWWKHGLVWULFWFRXUWHUUHGZKHQLWUHTXLUHG UHTXLUHVWKDWmSURWHFWHGDFWLYLW\lEHmGRQHLQIXUWKHUDQFH KHUWRERWKLQWHUQDOO\UHSRUWWKHIUDXGDQGVKRZKHUVXSHUYLVRU RIDQDFWLRQXQGHUWKLVVHFWLRQLQFOXGLQJLQYHVWLJDWLRQIRU WKHQHZVSDSHUDUWLFOHGHVFULELQJDIHGHUDOTXLWDPDFWLRQWR LQLWLDWLRQRIWHVWLPRQ\IRURUDVVLVWDQFHLQDQDFWLRQILOHGRU FRQVWLWXWHmSURWHFWHGDFWLYLW\lXQGHUWKH)&$,QGHHGWKH WREHILOHGXQGHUWKLVVHFWLRQl86&K7KH '&&LUFXLWKDVFLWHGWKLVFRXUWjVRSLQLRQLQ0F.HQ]LHIRUWKH OHJLVODWLYH KLVWRU\ DSSURYLQJO\ FLWHG E\ WKLV FRXUW LQ SURSRVLWLRQWKDWmLQWHUQDOUHSRUWLQJRIIDOVHFODLPVLVLWVHOIDQ 0F.HQ]LHVWDWHVWKDWmSURWHFWLRQVKRXOGH[WHQGQRWRQO\WR H[DPSOHRIDSURWHFWHGDFWLYLW\l6HH