Mulhall v. FBI

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,&+$(/ $ 08/+$// ; 3ODLQWLII$SSHOODQW    1R Y  !  s2+1 $6+&52)7LQKLV  RIILFLDOFDSDFLW\DV$WWRUQH\  *HQHUDODQGWKH)('(5$/  %85($8 2) ,19(67,*$7,21  'HIHQGDQWV$SSHOOHHV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW/RXLVYLOOH 1Rn&KDUOHV56LPSVRQ,,,'LVWULFWsXGJH $UJXHG0DUFK 'HFLGHGDQG)LOHG$SULO %HIRUH0225(DQG&2/(&LUFXLWsXGJHV7$512: 'LVWULFWsXGJH

7KH +RQRUDEOH $UWKXU s 7DUQRZ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

  0XOKDOOY$VKFURIWHWDO 1R 1R 0XOKDOOY$VKFURIWHWDO 

BBBBBBBBBBBBBBBBB ,,,&21&/86,21 &2816(/ )RUWKHIRUHJRLQJUHDVRQVZH9$&$7(WKHMXGJPHQWRI WKHGLVWULFWFRXUWDQG5(0$1'VRWKDWWKHGLVWULFWFRXUWPD\ $5*8('  sDPHV 0 %ROXV sU %2/86  5$*/$1' DPHQG LWV RUGHU WR JUDQW VXPPDU\ MXGJPHQW WR $WWRUQH\ /RXLVYLOOH .HQWXFN\ IRU $SSHOODQW  'DQLHO %HQVLQJ *HQHUDO$VKFURIWDQGWRGLVPLVVWKHFODLPVDJDLQVWWKH)%, 81,7(' 67$7(6 '(3$570(17 2) s867,&( :DVKLQJWRQ'&IRU$SSHOOHHV21%5,()sDPHV0 %ROXV sU %2/86  5$*/$1' /RXLVYLOOH .HQWXFN\ 7KRPDV(&OD\/RXLVYLOOH.HQWXFN\IRU$SSHOODQW'DQLHO %HQVLQJ 0DUOHLJK ' 'RYHU 81,7(' 67$7(6 '(3$570(17 2) s867,&( :DVKLQJWRQ '& IRU $SSHOOHHV BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB .$5(1 1(/621 0225( &LUFXLW sXGJH  3ODLQWLII 0LFKDHO$0XOKDOODSSHDOVWKHJUDQWRIVXPPDU\MXGJPHQW RQKLV7LWOH9,,UHWDOLDWLRQFODLP2QWKHPHULWVZHILQGQR HUURU LQ WKH GLVWULFW FRXUWjV MXGJPHQW ZLWK UHVSHFW WR 'HIHQGDQW$WWRUQH\*HQHUDOsRKQ$VKFURIWEHFDXVH0XOKDOO IDLOHGWRSURGXFHHLWKHUGLUHFWRUFLUFXPVWDQWLDOHYLGHQFHIURP ZKLFKDUHDVRQDEOHIDFWILQGHUFRXOGLQIHUWKDWKLVVXSHUYLVRUV NQHZRIKLVSURWHFWHGDFWLYLW\+RZHYHUZHPXVWUHPDQGVR WKH GLVWULFW FRXUW PD\ DPHQG LWV RUGHU LQ WKH SUHVHQW FDVH $OWKRXJK 0XOKDOO VXHG ERWK WKH )%, DQG WKHQ$WWRUQH\ *HQHUDOsDQHW5HQRLQKHURIILFLDOFDSDFLW\WKHGLVWULFWFRXUW HQWHUHGMXGJPHQWIRUWKH)%,RQO\7KHGLVWULFWFRXUWFOHDUO\ LQWHQGHGWRLVVXHDILQDORUGHULQJUDQWLQJVXPPDU\MXGJPHQW WRWKH)%,DQGWKXVLWVRPLVVLRQRIWKHDWWRUQH\JHQHUDOFRXOG EH GHVFULEHG DV D PHUHO\ WHFKQLFDO HUURU  %XW XQGHU  86&†HWKHDWWRUQH\JHQHUDOUDWKHUWKDQWKH)%, ZDVWKHRQO\SURSHUGHIHQGDQWLQWKHSUHVHQWFDVH7KXVZH 9$&$7(WKHGLVWULFWFRXUWjVMXGJPHQWDQG5(0$1'WRWKH GLVWULFWFRXUWVRWKDWLWPD\DPHQGLWVRUGHU  0XOKDOOY$VKFURIWHWDO 1R 1R 0XOKDOOY$VKFURIWHWDO 

ZDVRQWKHZLWQHVVOLVWRUWKDW%H\HULQIRUPHG0HWFDOIHDQG ,%$&.*5281' 5D\RIWKDWIDFW 0XOKDOOLVDsHIIHUVRQ&RXQW\.HQWXFN\SROLFHRIILFHU+H ,Q VXP WKH GLVWULFW FRXUW GLG QRW HUU LQ FRQFOXGLQJ WKDW ZDVDVVLJQHGWRWKH/RXLVYLOOH)XJLWLYH7DVN)RUFHm/)7)l 0XOKDOOKDVIDLOHGWRSURGXFHHYLGHQFHVXIILFLHQWWRHVWDEOLVK IURP0DUFKWR0DUFK7KH/)7)LVDMRLQW WKDWWKHRIILFLDOVWDNLQJWKHDGYHUVHHPSOR\PHQWDFWLRQNQHZ HIIRUWRIWKH)%,860DUVKDOV6HUYLFHWKH/RXLVYLOOH3ROLFH RIKLVSURWHFWHGDFWLYLW\0XOKDOOKDVQRWSURGXFHGGLUHFWRU 'HSDUWPHQW DQG WKH sHIIHUVRQ &RXQW\ 3ROLFH 'HSDUWPHQW FLUFXPVWDQWLDOHYLGHQFHWKDW0HWFDOIHDQG5D\NQHZWKDWKH ms&3'l7KHs&3'jVGHFLVLRQWRUHPRYH0XOKDOOIURPWKH ZDVOLVWHGDVDZLWQHVVE\+HQGHUVRQSULRUWRWKHGUDIWLQJDQG /)7)DQGUHDVVLJQKLPHIIHFWLYH0DUFKLVDWWKH VHQGLQJRIWKHOHWWHUWR0XOKDOOjVs&3'VXSHULRUV1RUKDVKH KHDUWRI0XOKDOOjV7LWOH9,,UHWDOLDWLRQFDVH SURGXFHG HYLGHQFH IURP ZKLFK RQH FRXOG UHDVRQDEO\ LQIHU WKDW0HWFDOIHDQGRU5D\NQHZRIKLVSURWHFWHGDFWLYLWLHV$ 0XOKDOOjV UHDVVLJQPHQW ZDV SURPSWHG E\ D VHHPLQJO\ UHDVRQDEOHMXU\FRXOGQRWILQGUHWDOLDWLRQRQWKHVHIDFWVDQG LQQRFXRXV OHWWHU VHQW E\ )%, 6XSHUYLVRU\ 6SHFLDO $JHQW WKXVVXPPDU\MXGJPHQWZDVSURSHU m66$l+DO0HWFDOIHWR0XOKDOOjVs&3'VXSHULRU&KLHIRI 3ROLFH /HRQ ( sRQHV RQ )HEUXDU\    6HH sRLQW )LQDOO\0XOKDOODOVRDUJXHVRQDSSHDOWKDWWKHGLVWULFWFRXUW $SSHQGL[ms$lDW&RPSOˆ66$0HWFDOIHZDV HUUHG LQ JUDQWLQJ VXPPDU\ MXGJPHQW LQ WKH SUHVHQW FDVH DVVLVWHG LQ SUHSDULQJ WKLV OHWWHU E\ 6SHFLDO $JHQW m6$l EHFDXVHWKDWFRXUWHIIHFWLYHO\UHYLVLWHGLWVHDUOLHUILQGLQJWKDW 0LFKDHO 5D\  0HWFDOIHjV OHWWHU UHTXHVWHG WKDW WKH s&3' KHKDGHVWDEOLVKHGDSULPDIDFLHFDVHRIUHWDOLDWLRQ0XOKDOO UHYLHZ0XOKDOOjVWLPHDQGDWWHQGDQFHUHFRUGVIRUWKHSHULRG DVVHUWV WKDW WKLV ZDV FRQWUDU\ WR RXU KROGLQJ LQ $YHU\ 0DUFKWKURXJK)HEUXDU\SXUSRUWHGO\VR 'HQQLVRQ  +RZHYHU $YHU\ 'HQQLVRQ KHOG RQO\ WKDW mLW LV WKDWWKHs&3'DQG)%,FRXOGSUHSDUHIRUDILQDQFLDODXGLWRI LQDSSURSULDWHIRUDFRXUWWRUHVROYHDGLVFULPLQDWLRQFDVHRQ WKH /)7)jV UHFRUGV E\ )%, KHDGTXDUWHUV  6HH s$ DW  JURXQGVWKDWDSULPDIDFLHFDVHKDGQRWEHHQPDGHDIWHUWKH 0HWFDOIH /HWWHU  7KH s&3'jV UHYLHZ RI 0XOKDOOjV WLPH FDVHKDVEHHQIXOO\WULHGRQWKHPHULWVl$YHU\'HQQLVRQ VKHHWVDQGDWWHQGDQFHUHFRUGVOHGWRDs&3',QWHUQDO$IIDLUV )GDWHPSKDVLVDGGHG6HHDOVR.RYDFHYLFKY.HQW m,$lLQYHVWLJDWLRQLQWR0XOKDOOjVDFWLYLWLHVVHHs$DW 6WDWH 8QLY  )G   WK &LU  m$YHU\ ,QWHUQDO $IIDLUV 5HS DQG KLV UHPRYDO IURP WKH /)7) 'HQQLVRQVWDQGVIRUWKHVLPSOHSURSRVLWLRQWKDWLQUHYLHZLQJ 7KXV WKH OHWWHU IURP 0HWFDOIH WR sRQHV FRQVWLWXWHV WKH WKHIDFWVRIDGLVFULPLQDWLRQFDVHDIWHUWKHUHKDVEHHQDIXOO FKDOOHQJHGDGYHUVHHPSOR\PHQWDFWLRQLQWKHSUHVHQWFDVH WULDO RQ WKH PHULWV D GLVWULFW FRXUW    PXVW IRFXV RQ WKH XOWLPDWHTXHVWLRQRIGLVFULPLQDWLRQUDWKHUWKDQRQZKHWKHUD 7KH VSHFLILF FKDUJHV DJDLQVW 0XOKDOO UHODWHG WR KLV SODLQWLIIPDGHRXWKHUSULPDIDFLHFDVHlHPSKDVLVDGGHG UHFRUGLQJRIRYHUWLPHKRXUV$VSUHVHQWHGE\66$0HWFDOIH ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUW JUDQWHG VXPPDU\ DQG6$5D\0XOKDOOKDGEHHQGHIUDXGLQJWKHJRYHUQPHQWE\ MXGJPHQWSULRUWRWULDORQWKHPHULWVDQGWKXVLWGLGQRWHUULQ FODLPLQJWRKDYHZRUNHGKRXUVWKDWKHKDGQRWZRUNHG6HH UHYLVLWLQJLWVKROGLQJRQWKHGHIHQGDQWVjUHQHZHGPRWLRQIRU HJs$DW=DERURQDN'HS7KHDFWXDOGLVFUHSDQFLHV VXPPDU\ MXGJPHQW LQ OLJKW RI WKH DGGLWLRQDO HYLGHQFH LQ WKH WLPH VKHHWV n ZKLFK DUH SHULSKHUDO WR WKH LVVXHV XQFRYHUHGGXULQJGLVFRYHU\ SUHVHQWHGRQWKLVDSSHDOnVWHPPHGDSSDUHQWO\IURPWKH GLIIHUHQFHV LQ WKH UXOHV IRU FRPSHQVDWLQJ RYHUWLPH IRU WKH s&3' DQG )%,  0XOKDOO ZDV HYHQWXDOO\ FOHDUHG RI DQ\ ZURQJGRLQJE\WKH,$LQYHVWLJDWLRQDQGQRFULPLQDOFKDUJHV ZHUHHYHUEURXJKWDJDLQVWKLP  0XOKDOOY$VKFURIWHWDO 1R 1R 0XOKDOOY$VKFURIWHWDO 

7KHSDUWLHVWRWKHSUHVHQWFDVHGRQRWGLVSXWHRQDSSHDO RIILFLDO ZKR DFWXDOO\ ILUHG WKH SODLQWLII PDGH LW mKLJKO\ WKDW WKH 0HWFDOIH OHWWHU ZKLFK UHVXOWHG LQ 0XOKDOOjV LPSUREDEOH    WKDW >WKH ILUVW RIILFLDO@ ZRXOG QRW KDYH UHDVVLJQPHQW FRQVWLWXWHV DQ DGYHUVH DFWLRQ  1RU GR WKH\ GLVFXVVHGSODLQWLIIjVFRPSODLQWZLWK>WKHVHFRQGRIILFLDO@DV GLVSXWHRQDSSHDOWKDW0XOKDOOZDVHQJDJHGLQDSURWHFWHG VRRQDV>WKHILUVWRIILFLDO@REWDLQHGWKLVLQIRUPDWLRQl,GDW DFWLYLW\SULRUWRWKHDGYHUVHDFWLRQ0XOKDOOZDVQDPHGDVD   .UDORZHF ZKLFK 0XOKDOO FLWHV RQ DSSHDO LV ZLWQHVV LQ IRUPHU 6$ sHDQQH sDPHV +HQGHUVRQjV ((2 GLVWLQJXLVKDEOHIURPWKHSUHVHQWFDVHKRZHYHULQWKDWWKH FRPSODLQW DJDLQVW DQRWKHU )%, DJHQW  6HH s$ DW  ILUVW RIILFLDO DFWXDOO\ SDUWLFLSDWHG LQ GUDIWLQJ WKH FKDUJHV +HQGHUVRQ((2&RPSO+HQGHUVRQ$II7KLVZRXOG DJDLQVWWKHSODLQWLIIWKDWUHVXOWHGLQKHUGLVFKDUJH6HHLGDW FRQVWLWXWHDSURWHFWHGDFWLYLW\XQGHU86&†HD   *LYHQ WKLV OHYHO RI LQYROYHPHQW E\ DQ RIILFLDO ZLWK ZKLFK SURKLELWV GLVFULPLQDWLRQ IRU mDVVLVW>LQJ @ RU NQRZOHGJH RI WKH SURWHFWHG DFWLYLW\ WKH FRPSODLQW LQ WKDW SDUWLFLSDW>LQJ@LQDQ\PDQQHULQDQLQYHVWLJDWLRQSURFHHGLQJ FDVHWKHLQIHUHQFHWKDWWKHRIILFLDOZKRDFWXDOO\GHFLGHGWR RUKHDULQJXQGHUl7LWOH9,, ILUHWKHSODLQWLIIZDVHPLQHQWO\UHDVRQDEOH0XOKDOOKDVQHYHU DUJXHG WKDW %H\HU DFWXDOO\ SDUWLFLSDWHG LQ WKH DGYHUVH ,QVWHDGWKHSDUWLHVGLVSXWHZKHWKHU66$0HWFDOIHDQG6$ HPSOR\PHQW DFWLRQ LQ WKH SUHVHQW FDVH QRU KDV 0XOKDOO 5D\NQHZWKDW0XOKDOOZDVOLVWHGDVDZLWQHVVE\+HQGHUVRQ DOOHJHGIDFWVRISULRULQWHUDFWLRQVEHWZHHQ%H\HURQWKHRQH DWWKHWLPHWKDWWKH\GUDIWHGDQGVHQWWKHOHWWHUWR0XOKDOOjV KDQG DQG 0HWFDOIH DQG 5D\ RQ WKH RWKHU WKDW PDNH LW s&3' VXSHUYLVRU  )RU WKHLU SDUW 0HWFDOIH DQG 5D\ UHDVRQDEOHWRLQIHUWKDWWKHIRUPHUZRXOGGLVFXVV0XOKDOOjV XQHTXLYRFDOO\GHQ\DQ\NQRZOHGJHRIWKDWFUXFLDOIDFWRQRU LQFOXVLRQ RQ +HQGHUVRQjV ZLWQHVV OLVW mDV VRRQ DV >KH@ EHIRUH)HEUXDU\7KHIDFWVXQGHUO\LQJWKHVHGHQLDOV REWDLQHGWKLVLQIRUPDWLRQl DUHDVIROORZV2QRUDERXW)HEUXDU\6$'DYLG %H\HUFKLHIFRXQVHODWWKH/RXLVYLOOH)%,RIILFHUHFHLYHGE\ 0RUHRYHU WKHUH ZDV HYLGHQFH LQ .UDORZHF WKDW WKH ILUVW PDLODSDFNDJHWKDWFRQWDLQHG+HQGHUVRQjVILIW\HLJKWSDJH RIILFLDODFWXDOO\NQHZRIWKHSODLQWLIIjVFRPSODLQW6HHLGDW VZRUQVWDWHPHQW0XOKDOOjVQDPHZDVWKHODVWQDPHRQWKH   0XOKDOO KDV QRW SURGXFHG HYLGHQFH WKDW %H\HU OLVWRIZLWQHVVHVLQWKHVZRUQVWDWHPHQWnLWDSSHDUHGRQSDJH DFWXDOO\ NQHZ WKDW +HQGHUVRQ KDG OLVWHG KLP DV D ZLWQHVV ILIW\HLJKWWKHODVWSDJH7KHSDFNDJHZDVDGGUHVVHGWR%H\HU (YHQ LI ZH LQIHU WKDW %H\HU VDZ 0XOKDOOjV QDPH RQ WKH EXWLQGLFDWHGLQDQRWDWLRQZULWWHQRQWKHHQYHORSHWKDW%H\HU ZLWQHVV OLVW ZKHQ KH SKRWRFRSLHG +HQGHUVRQjV VZRUQ VKRXOG GHOLYHU WKH SDFNDJH WR 6$ 5XVV 3XOOH\ WKH ((2 VWDWHPHQW GHVSLWH %H\HUjV GHSRVLWLRQ WHVWLPRQ\ WR WKH LQYHVWLJDWRUDVVLJQHGWR+HQGHUVRQjVFRPSODLQW%H\HUSODFHG FRQWUDU\LQRUGHUWRUHYHUVHWKHGLVWULFWFRXUWZHZRXOGKDYH WKHSDFNDJHLQKLVRIILFHVDIHKHFODLPVQRWWRKDYHRSHQHG WRJRIXUWKHUDQGLQIHUWKDW%H\HUVKDUHGWKLVLQIRUPDWLRQZLWK WKHSDFNDJHDWWKHWLPHRUWRKDYHUHDGLWVFRQWHQWV6HHs$ 0HWFDOIH DQGRU 5D\  7KHUH LV VLPSO\ QR HYLGHQFH LQ WKH DW%H\HU'HS2Q)HEUXDU\3XOOH\FRQWDFWHG UHFRUGGLUHFWRUFLUFXPVWDQWLDOWRVXSSRUWVXFKDQLQIHUHQFH %H\HU WROG KLP WKDW WKH SDFNDJH FRQWDLQHG +HQGHUVRQjV RWKHU WKDQ WKH DGYHUVH DFWLRQ LWVHOI  0XOKDOO KRZHYHU VZRUQVWDWHPHQWDQGUHTXHVWHGWKDW%H\HUPDNHDFRS\RILW FRQWLQXHVWRDVVHUWWKDWm%H\HUGLVVHPLQDWHG0XOKDOOjVQDPHl DQGVHQGWKHFRS\WR+HQGHUVRQjVDWWRUQH\%H\HUFRPSOLHG JRLQJVRIDUDVWRFODLPWKDWGLVFRYHU\KDVPDGHWKLVmDQHYHQ ZLWK3XOOH\jV UHTXHVWE\RSHQLQJWKHSDFNDJHFRS\LQJWKH PRUHUHDOLVWLFSRVVLELOLW\l$SSHOODQWj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

FRUUHFWLRQVRIILFHULQKLVFHOOEORFNKDGEHHQWUDQVIHUUHG7KH WKDW0XOKDOOjVQDPHDSSHDUHGRQWKHZLWQHVVOLVWRQWKHODVW SODLQWLIIKRZHYHUZDVWKHRQO\WUDQVIHUUHGRIILFHUWRILOHD SDJHRIWKHVWDWHPHQW6HHs$DW%H\HU'HS JULHYDQFHFRPSODLQLQJRIWKHWUDQVIHUDQGKHZDVWKHRQO\ WUDQVIHUUHGRIILFHUUHWXUQHGWRWKHFHOOEORFN6HHLG*LYHQ 2Q0DUFK+HQGHUVRQjVDWWRUQH\FRQWDFWHG%H\HU WKDWWKHVXSHUYLVRUWRRNDQDFWLRQZLWKUHVSHFWWRWKHSODLQWLII WRLQIRUPKLPWKDWWKHFRS\RI+HQGHUVRQjVVWDWHPHQWKDGQRW RWKHUWKDQWKHFKDOOHQJHGDGYHUVHDFWLRQIURPZKLFKLWFRXOG DUULYHG%H\HUIROORZHGXSZLWKWKHPDLOURRPHPSOR\HHDQG EHLQIHUUHGWKDWWKHVXSHUYLVRUZDVDZDUHRIWKHSODLQWLIIjV GLVFRYHUHGWKDWWKHVWDWHPHQWVWLOOLQLWVVHDOHGHQYHORSHZDV JULHYDQFHZHKHOGWKDWWKHSODLQWLIIKDGPHWKLVEXUGHQRQ VWLOOLQWKHPDLOURRPHPSOR\HHjVPDLOER[6HHs$DW WKLV HOHPHQW RI KLV FDVH  ,Q FRQWUDVW 0XOKDOO KDV QRW 8SRQPDNLQJWKLVGLVFRYHU\%H\HUFRPSRVHGDPHPRUDQGXP SURGXFHGDQ\HYLGHQFHRIRWKHUDFWLRQVWDNHQE\0HWFDOIHDQG UHJDUGLQJWKHPLVKDQGOLQJRIWKHSDFNDJHEHFDXVHKHFODLPV 5D\RWKHUWKDQWKHFKDOOHQJHGDGYHUVHDFWLRQIURPZKLFKD KH ZDV FRQFHUQHG WKDW +HQGHUVRQ ZRXOG VHH WKLV DV DQ UHDVRQDEOHMXU\FRXOGLQIHUWKDWWKH\NQHZWKDW0XOKDOOKDG RSSRUWXQLW\IRUDGGLWLRQDOOLWLJDWLRQDJDLQVWWKH)%,6HHs$ EHHQOLVWHGDVDZLWQHVVLQ+HQGHUVRQjVFRPSODLQW DW%H\HU0HPR 6LPLODUO\LQ3RONY

WKHQUHVHDOHGWKHHQYHORSH6HHs$DW0XOKDOODVVHUWV 7KHIDFWVLQWKHSUHVHQWFDVHDUHVLPLODU0HWFDOIHDQG5D\ WKDWWKHSUDFWLFHRIRSHQLQJPDLODGGUHVVHGWRRWKHUVFDOOHG KDYHWHVWLILHGWKDWWKH\GLGQRWNQRZRI0XOKDOOjVSURWHFWHG mEDJJLQJlZDVFRPPRQLQWKH/RXLVYLOOH)%,RIILFH6HH DFWLYLW\ ZKHQ WKH\ WRRN WKH DGYHUVH HPSOR\PHQW DFWLRQ s$ DW   +H DOVR FODLPV WKDW 0HWFDOIH DQG 5D\ ZHUH %H\HU DOVR WHVWLILHG WKDW KH GLG QRW NQRZ RI 0XOKDOOjV WUDLQHG WR RSHQ PDLO DQG UHVHDO HQYHORSHV ZLWKRXW EHLQJ SURWHFWHG DFWLYLW\ DQG WKXV WKDW KH GLG QRW FRQYH\ WKDW GHWHFWHG6HHs$DW7KLUG0XOKDOOVXJJHVWVWKDWWKH LQIRUPDWLRQ WR HLWKHU 0HWFDOIH RU 5D\  0XOKDOO DUJXHV LQ PDLOURRPDWWKH/RXLVYLOOH)%,RIILFHZRXOGKDYHRSHQHGWKH UHVSRQVHWKDWQRQHRIWKHVHVWDWHPHQWVDUHFUHGLEOHEXWKHKDV SDFNDJHZKLFKZDVDGGUHVVHGWR6$3XOOH\DQmXQNQRZQl IDLOHGWRSURGXFHDQ\HYLGHQFHGLUHFWRUFLUFXPVWDQWLDOWR DJHQWXSRQGHOLYHU\DQGWKDW0HWFDOIHDQG5D\GLVFRYHUHGLWV UHEXW WKHVH GHQLDOV  0XOKDOO RIIHUV RQO\ FRQVSLUDWRULDO FRQWHQWVDVDUHVXOW6HHs$DW$SSHOODQWjV%UDW WKHRULHVQRWWKHVSHFLILFIDFWVUHTXLUHGXQGHUWKH)HGHUDO5XOH RI&LYLO3URFHGXUH&I9LVVHUY3DFNHU(QJjJ$VVRFV ,Q RIIHULQJ WKHVH WKHRULHV 0XOKDOO SRLQWV WR WKH XQXVXDO ,QF)GWK&LUHQEDQFKROGLQJWKDW PDLOLQJ RI WKH SDFNDJH IURP :DVKLQJWRQ '& WR WKH VXPPDU\ MXGJPHQW ZDV DSSURSULDWH ZKHUH WKH LQIHUHQFHV /RXLVYLOOH)%,RIILFHn3XOOH\WKH((2LQYHVWLJDWRUZRUNHG SODLQWLIIVRXJKWWRGUDZIURPHYLGHQFHZHUHDNLQWRmIOLJKWV RXWRIWKH0HPSKLVRIILFHVHHs$DWnDQGDWWHPSWV RIIDQF\VSHFXODWLRQVKXQFKHVLQWXLWLRQVRUUXPRUVDERXW WRXQGHUPLQHWKHFUHGLELOLW\RI%H\HU0HWFDOIHDQG5D\+H PDWWHUVUHPRWHIURP>SHUVRQDO@H[SHULHQFHl DWWDFNV %H\HUjV FUHGLELOLW\ E\ SRLQWLQJ WR PLQRU LQFRQVLVWHQFLHVEHWZHHQWKH0DUFKPHPRFRPSRVHG ,QPRVW7LWOH9,,UHWDOLDWLRQFDVHVWKHSODLQWLIIZLOOEHDEOH E\%H\HUDQG%H\HUjVODWHUGHSRVLWLRQWHVWLPRQ\6HHs$DW WRSURGXFHGLUHFWHYLGHQFHWKDWWKHGHFLVLRQPDNLQJRIILFLDOV  VHH DOVR $SSHOODQWjV %U DW  OLVWLQJ HLJKW NQHZ RI WKH SODLQWLIIjV SURWHFWHG DFWLYLW\  ,Q PDQ\ VXFK LQFRQVLVWHQFLHV+HDWWDFNVWKHFUHGLELOLW\RI0HWFDOIHDQG FDVHVIRUH[DPSOHWKHDGYHUVHDFWLRQZLOOEHWDNHQE\WKH 5D\ E\ SRLQWLQJ WR 5D\jV KLVWRU\ RI O\LQJ DQG IDOVLI\LQJ VDPHVXSHUYLVRUWRZKRPWKHSODLQWLIIKDVPDGHFRPSODLQWV GRFXPHQWV VHH s$ DW  DQG 0HWFDOIHjV KLVWRU\ RI LQ WKH SDVW  %XW GLUHFW HYLGHQFH RI VXFK NQRZOHGJH RU UHWDOLDWLQJLQ7LWOH9,,FDVHVVHHs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WRHVWDEOLVKWKLVHOHPHQWRIKLVFODLP6HH)GDW HVWDEOLVK D SULPD IDFLH FDVH RI 7LWOH 9,, UHWDOLDWLRQ  7KH ,Q$OOHQWKHSODLQWLIIDQGHYHU\RWKHU$IULFDQ$PHULFDQ GLVWULFW FRXUW WUHDWLQJ WKLV PRWLRQ DV RQH IRU VXPPDU\ MXGJPHQWGHQLHGWKHPRWLRQKROGLQJWKDWmWKHFLUFXPVWDQFHV  ,Q DQ XQSXEOLVKHG FDVH ZH KDYH SUHYLRXVO\ QRWHG m$OWKRXJK WKH SDUDGLJP HVWDEOLVKHG E\ 0F'RQQHOO> @'RXJODV &RUS Y *UHHQ ZDV  ,Q KLV EULHI 0XOKDOO DUJXHV WKDW m>V@SHFLDO DJHQWV KDYH WKH DELOLW\ WR GHVLJQHG WR DFFRPPRGDWH GLVFULPLQDWLRQ FODLPV EDVHG RQ FLUFXPVWDQWLDO RSHQ XS DQG UHVHDO HQYHORSHV ZLWKRXW EHLQJ GHWHFWHG 5D\ ZDV LQ FRXQWHU HYLGHQFH D SODLQWLII UHO\LQJ RQ WKLV SDUDGLJP WR SURYH XQODZIXO UHWDOLDWLRQ LQWHOOLJHQFH GXULQJ WKH &ROG :DU ZKHUH KH VSLHG RQ VSLHV 0HWFDOIH KDV W\SLFDOO\ KDV GLUHFW HYLGHQFH WKDW WKH GHIHQGDQW ZDV DZDUH RI WKH UHFHLYHG VSHFLDOL]HG WUDLQLQJ LQ VXUYHLOODQFH WHFKQLTXHV IURP 1HZ SODLQWLII>j@V SURWHFWHG DFWLYLW\l 3HWHUVRQ Y 'LDO\VLV &OLQLF ,QF 1R  6FRWODQG

DQG WKH DGYHUVH HPSOR\PHQW DFWLRQ WKURXJK FLUFXPVWDQWLDO VXUURXQGLQJWKHLQLWLDWLRQRIWKHLQYHVWLJDWLRQDQG0XOKDOOjV HYLGHQFH  7HPSRUDO SUR[LPLW\ ZKHQ FRXSOHG ZLWK RWKHU UHPRYDO IURP WKH 7DVN )RUFH ZKHQ YLHZHG DV D ZKROH IDFWV PD\ EH VXIILFLHQW LQ FHUWDLQ FDVHV WR HVWDEOLVK WKH UDLVH>@ DQ LQIHUHQFH RI UHWDOLDWLRQ E\ WKH )%, VXIILFLHQW WR FDXVDOFRQQHFWLRQSURQJLQD7LWOH9,,FDVH6HHHJ1JX\HQ HVWDEOLVKDSULPDIDFLHFDVHRIFDXVDOFRQQHFWLRQls$DW Y &LW\ RI &OHYHODQG  )G   WK &LU  7KHGLVWULFWFRXUWQRWHGLQDIRRWQRWHWKDWLWVILQGLQJVLQWKLV QRWLQJWKDWmWKHUHPD\EHFLUFXPVWDQFHVZKHUHHYLGHQFHRI UHVSHFWZHUHmPDGHXQGHUWKHORZHUEXUGHQRISURRIUHTXLUHG WHPSRUDOSUR[LPLW\DORQHZRXOGEHVXIILFLHQWWRVXSSRUWlWKH WR VXVWDLQ D SULPD IDFLH FDVH UDWKHU WKDQ WKDW ZKLFK LV LQIHUHQFHRIDFDXVDOFRQQHFWLRQEXWWKDWWHPSRUDOSUR[LPLW\ UHTXLUHG WR ZLQ D MXGJPHQW RQ WKH XOWLPDWH LVVXH RI ZLWKRXWPRUHZDVLQVXIILFLHQWLQWKHFDVHEHIRUHWKHFRXUW GLVFULPLQDWLRQls$DWQ,QLWVRSLQLRQWKHGLVWULFW ,Q WKH SUHVHQW FDVH KRZHYHU WKH GLVWULFW FRXUW JUDQWHG FRXUW GLVFXVVHG 0XOKDOOjV WKHRU\ WKDW %H\HU KDG VXPPDU\ MXGJPHQW EHFDXVH 0XOKDOO IDLOHG WR SURGXFH DQ\ FRPPXQLFDWHGWKHIDFWWKDW0XOKDOOZDVOLVWHGDVDZLWQHVVE\ GLUHFW RU FLUFXPVWDQWLDO HYLGHQFH IURP ZKLFK D UHDVRQDEOH +HQGHUVRQ WR 0HWFDOIH DQG 5D\ QRWLQJ WKH )%, DJHQWVj MXU\FRXOGLQIHUWKDW0HWFDOIHDQG5D\NQHZRUZHUHDZDUHRI XQHTXLYRFDOGHQLDOVRQWKLVIURQWEXWFRQFOXGHGWKDW0XOKDOO KLVSURWHFWHGDFWLYLW\ KDGSUHVHQWHGVXIILFLHQWFLUFXPVWDQWLDOHYLGHQFHRIDFDXVDO FRQQHFWLRQ EHWZHHQ WKH SURWHFWHG DFWLYLW\ DQG WKH DGYHUVH ,Q)HQWRQY+L6$1,QF)GWK&LUWKLV DFWLRQWRVXUYLYHVXPPDU\MXGJPHQW FRXUW DIILUPHG WKH JUDQW RI VXPPDU\ MXGJPHQW ZKHUH WKH SODLQWLII ZDV XQDEOH WR SURGXFH HYLGHQFH VXIILFLHQW WR ,QWKLVRSLQLRQLVVXHGRQ$SULOWKHGLVWULFWFRXUW HVWDEOLVKWKDWWKHLQGLYLGXDOVFKDUJHGZLWKWDNLQJWKHDGYHUVH GLG QRW WUHDW WKH LVVXH RI WKH )%, DJHQWVj NQRZOHGJH DV D HPSOR\PHQWDFWLRQNQHZRIWKHSURWHFWHGDFWLYLW\6HHLGDW VHSDUDWH HOHPHQW RI 0XOKDOOjV SULPD IDFLH FDVH  7KH )%, 7KHDGYHUVHDFWLRQZDVWKHWUDQVIHURIWKHSODLQWLIIWRWKH UHQHZHGLWVPRWLRQIRUVXPPDU\MXGJPHQWDWWKHFRQFOXVLRQ m%lVKLIW7KH+L6$1FRXUWKHOG RIGLVFRYHU\2QHRIWKHPDLQWKUXVWVRIWKH)%,jVUHQHZHG PRWLRQ IRU VXPPDU\ MXGJPHQW ZDV WKDW 0XOKDOO FRXOG QRW $OWKRXJK)HQWRQPHWZLWK5LFHDQG'RQ7XUQHU5LFHjV HVWDEOLVKDSULPDIDFLHFDVHRIUHWDOLDWLRQEHFDXVHKHFRXOGQRW VXSHUYLVRUDQGWKHSODQWVXSHULQWHQGHQWVKHLVXQDEOHWR mGHPRQVWUDWHWKDWWKH)%,NQHZWKDWKLVQDPHZDVOLVWHGDVD SURGXFH DQ\ HYLGHQFH WKDW WKH UHOHYDQW PDQDJHPHQW ZLWQHVVRQ+HQGHUVRQjVVLJQHGVZRUQVWDWHPHQWls$DW GHFLVLRQPDNHUV ZKR PRYHG KHU WR WKH m%l VKLIW n   7R VXSSRUW LWV DUJXPHQW WKDW VXFK NQRZOHGJH ZDV D 5HEHFFD 6KHQN DQG sRKQ 0LOOHU n NQHZ RI KHU VHSDUDWHHOHPHQWRI0XOKDOOjVSULPDIDFLHFDVHWKH)%,FLWHG FRPSODLQWVZKHQWKH\GHFLGHGWRWUDQVIHUKHU6KHQN RXUGHFLVLRQLQ)HQWRQY+L6$1,QF)GWK WHVWLILHG WKDW VKH ZDV QRW LQIRUPHG RI SODLQWLIIjV &LU7KH)%,DUJXHG FRPSODLQWVXQWLO2FWREHU>IRXUGD\VDIWHU )HQWRQ ZDV LQIRUPHG RI KHU WUDQVIHU@  $FFRUGLQJ WR 0LOOHUjV WHVWLPRQ\ KH DQG 6KHQN GHFLGHG HLWKHU RQ 6HSWHPEHURU2FWREHUWKDWSODLQWLIIZDV WR EH WUDQVIHUUHG WR WKH m%l VKLIW    7KHUHIRUH     >SODLQWLII@ KDV QRW PHW KHU EXUGHQ RI VKRZLQJ WKDW KHU 7KH VHFRQG PRWLRQ IRU VXPPDU\ MXGJPHQW GURSSHG $WWRUQH\ SURWHFWHG DFWLYLW\ ZDV NQRZQ WR WKRVH ZKR PDGH WKDW *HQHUDO 5HQR IURP WKH FDSWLRQ $00 s$ DW  s:9 800 s$ DW  'LVW &W 'RFNHW UHIHUULQJ WR PRWLRQ DV WKDW RI GHIHQGDQWV 5HQR DQG WKH )%, GHFLVLRQ 7KH GLVWULFW FRXUW GLG QRW GHWHFW WKLV HUURU DQG JUDQWHG VXPPDU\ MXGJPHQW WR WKH )%, LQ LWV RUGHU ZLWKRXW PHQWLRQ RI $WWRUQH\ *HQHUDO 5HQR $00 ,G s$ DW  2UGHU 7KH GLVWULFW FRXUW GRFNHW UHFRUGHG WKLV RUGHU DV JUDQWLQJ VXPPDU\ MXGJPHQW mLQ IDYRU RI WKH )%,l s$ DW   0XOKDOOY$VKFURIWHWDO 1R 1R 0XOKDOOY$VKFURIWHWDO 

$IWHU H[WHQVLYH GLVFRYHU\ SODLQWLII FDQ SRLQW WR QR LQDFWLYLW\SURWHFWHGE\7LWOH9,,SODLQWLIIjVH[HUFLVHRIKLV HYLGHQFH ZKDWVRHYHU WKDW 66$ 0HWFDOIH NQHZ WKDW FLYLOULJKWVZDVNQRZQE\WKHGHIHQGDQWWKDWWKHUHDIWHU SODLQWLII ZDV OLVWHG DV D ZLWQHVV RQ 0V +HQGHUVRQjV WKH GHIHQGDQW WRRN DQ HPSOR\PHQW DFWLRQ DGYHUVH WR WKH VWDWHPHQWDWWKHWLPHKHVHQWKLV)HEUXDU\OHWWHU SODLQWLIIDQGWKDWWKHUHZDVDFDXVDOFRQQHFWLRQEHWZHHQ WRWKHs&3' WKHSURWHFWHGDFWLYLW\DQGWKHDGYHUVHHPSOR\PHQWDFWLRQl ((2&Y$YHU\'HQQLVRQ&RUS)GWK&LU ,W DSSHDUV WKDW SODLQWLIIjV RQO\ mHYLGHQFHl RQ WKH 6HHDOVR/LWWOHY%3([SORUDWLRQ 2LO&R)G HPSOR\HUNQRZOHGJHSURQJRIKLVSULPDIDFLHFDVHLVWKH   WK &LU  VDPH $OOHQ Y 0LFK 'HSjW RI FORVHQHVVLQWLPHRIWZRHYHQWVWKHUHFHLSWLQWKH)%, &RUU  )G   WK &LU  VDPH  &I /RXLVYLOOH RIILFH RI    +HQGHUVRQjV 6LJQHG 6ZRUQ 7KDGGHXV;Y%ODWWHU)G QWK&LU VWDWHPHQW    RQ )HEUXDU\  RU   DQG WKH HQEDQFVWDWLQJJHQHUDOWHVWIRUUHWDOLDWLRQFODLPVDQG WUDQVPLWWDO RI D OHWWHU IURP >0HWFDOIH@ WR SODLQWLIIjV QRWLQJ WKDW WKH WHVW LV RIWHQ VWDWHG DV mD IRXUSURQJ WHVWl HPSOR\HURQ)HEUXDU\UHTXHVWLQJDUHYLHZRI WUHDWLQJWKHGHIHQGDQWjVNQRZOHGJHRIWKHSURWHFWHGFRQGXFW KLVWLPHVKHHWV DVWKHIRXUWKHOHPHQW6XPPDU\MXGJPHQWLVSURSHUZKHUH WKH SODLQWLII IDLOV WR SUHVHQW HYLGHQFH VXIILFLHQW WR FUHDWH D +RZHYHUWKLVLVPHUHVSHFXODWLRQDVSODLQWLIIFRQFHGHG GLVSXWH RI PDWHULDO IDFW ZLWK UHVSHFW WR DQ HOHPHQW RI KLV LQ KLV GHSRVLWLRQ RWKHU WKDQ WKH FORVHQHVV LQ WLPH UHWDOLDWLRQFODLP6HHHJ$OOHQ)GDW EHWZHHQ WKH WZR HYHQWV KH KDV QR HYLGHQFH WKDW 66$ 0HWFDOIHNQHZWKDWKHZDVOLVWHGE\0V+HQGHUVRQDVD :HDJUHHZLWKWKHGLVWULFWFRXUWjVFRQFOXVLRQWKDW0XOKDOO ZLWQHVV KDV IDLOHG WR SUHVHQW VXIILFLHQW HYLGHQFH IURP ZKLFK D UHDVRQDEOHMXU\FRXOGLQIHUWKDW0HWFDOIHDQGRU5D\NQHZ s$DW WKDW +HQGHUVRQ KDG OLVWHG KLP DV D ZLWQHVV LQ KHU ((2 FRPSODLQW  2Q DSSHDO 0XOKDOO DUJXHV WKDW mD ZHDOWK RI 0XOKDOO UHVSRQGHG WR WKH )%,jV UHQHZHG PRWLRQ IRU FRPSHOOLQJHYLGHQFHHVWDEOLVKHVWKDW0HWFDOIHDQG5D\KDG VXPPDU\MXGJPHQWE\SRLQWLQJWR WKHGLVWULFWFRXUWjVSULRU WKH RSSRUWXQLW\ WR OHDUQ 0XOKDOO ZDV DQ ((2 ZLWQHVVl ILQGLQJWKDWKHKDGHVWDEOLVKHGDSULPDIDFLHFDVHRI7LWOH9,, $SSHOODQWjV%UDWDQGWKDWm>W@KHWULDOFRXUWKDVLQHIIHFW UHWDOLDWLRQ6HHs$DW5HVSRQVH0XOKDOODOVRFODLPHG UHTXLUHG0XOKDOOWRSURGXFHGLUHFWSURRIRIUHWDOLDWLRQlLGDW WKDW KLV SULPD IDFLH FDVH KDG EHHQ mVWUHQJWKHQHG WKURXJK   %XW 0XOKDOO FRQWHQGV mWKH FDVHV IURP WKLV DQG RWKHU GLVFRYHU\l s$ DW  EHFDXVH RI WKH IDFWV UHJDUGLQJ WKH &LUFXLWV DUH FOHDU WKDW D MXU\ TXHVWLRQ FDQ EH FUHDWHG IRU D PLVKDQGOLQJRIWKH3XOOH\SDFNDJHDQGFUHGLELOLW\LVVXHVWKDW UHWDOLDWLRQFODLPEDVHGVROHO\XSRQFLUFXPVWDQWLDOHYLGHQFHn KDGFRPHWROLJKW,QGLVFXVVLQJWKHDSSOLFDEOHODZKRZHYHU LHWHPSRUDOSUR[LPLW\DQGFLUFXPVWDQFHVDVDZKROHnDV 0XOKDOOjV UHVSRQVH IDLOHG WR QRWH WKH GLVWLQFWLRQ GUDZQ LQ WRWKHµFDXVDOFRQQHFWLRQjHOHPHQWRIWKHFODLPl,GDW )HQWRQ DQG RWKHU FDVHV EHWZHHQ  GHPRQVWUDWLQJ WKDW D UHOHYDQW GHFLVLRQPDNHU NQHZ RI WKH SODLQWLIIjV SURWHFWHG $V WKH ODVW VWDWHPHQW LQGLFDWHV 0XOKDOOjV DUJXPHQW RQ DFWLYLW\ DQG  HVWDEOLVKLQJ D FDXVDO OLQN EHWZHHQ WKH DSSHDOODUJHO\LJQRUHVWKHNQRZOHGJHSURQJRIKLV7LWOH9,, SURWHFWHG DFWLYLW\ DQG WKH DGYHUVH DFWLRQ WKURXJK FDVHDQGIRFXVHVRQWKHFDXVDOFRQQHFWLRQSURQJ7KHGLVWULFW FLUFXPVWDQWLDO HYLGHQFH  7KXV 0XOKDOO DUJXHG WKDW IDFWV FRXUWGLGQRWJUDQWVXPPDU\MXGJPHQWWRWKHGHIHQGDQWVLQWKH SUHVHQWFDVHEHFDXVHLWGHWHUPLQHGWKDWDSODLQWLIIPD\QRW PHHWKLVEXUGHQRIFUHDWLQJDQLVVXHRIPDWHULDOIDFWRQWKH  0XOKDOOjV 5HVSRQVH SURSHUO\ OLVWHG $WWRUQH\ *HQHUDO 5HQR DV D LVVXHRIDFDXVDOFRQQHFWLRQEHWZHHQKLVSURWHFWHGDFWLYLW\ GHIHQGDQW $00 s$ DW   0XOKDOOY$VKFURIWHWDO 1R 1R 0XOKDOOY$VKFURIWHWDO 

6LPLODUO\ LQ WKH SUHVHQW FDVH 0XOKDOO DOOHJHV 7LWOH 9,, XQFRYHUHG WKURXJK GLVFRYHU\ IXUWKHU VXSSRUWHG WKH UHWDOLDWLRQ E\ WKH )%, WKH )%, LV D VXEXQLW RI WKH sXVWLFH FLUFXPVWDQWLDOHYLGHQFHWKDW KHKDGDOUHDG\SUHVHQWHGZLWK 'HSDUWPHQW7KHUHIRUHWKHSURSHUGHIHQGDQWLVWKH$WWRUQH\ UHVSHFWWRWKHFDXVDOFRQQHFWLRQVHHs$DWDQGWKDW *HQHUDO WKH KHDG RI WKH sXVWLFH 'HSDUWPHQW  *LYHQ WKH WKH)%,KDGIDLOHGWRUHEXWKLVSULPDIDFLHFDVHVHHs$DW FKDQJHLQSUHVLGHQWLDODGPLQLVWUDWLRQ$WWRUQH\*HQHUDOsRKQ  $VKFURIWLVWKHSURSHUGHIHQGDQWLQWKHSUHVHQWFDVH6HH)HG 5 $SS 3 F   7KXV ZH DIILUP WKH GLVWULFW FRXUWjV 7KHGLVWULFWFRXUWJUDQWHGWKH)%,VXPPDU\MXGJPHQWRQ GLVPLVVDO RI 0XOKDOOjV FODLP DJDLQVW WKH )%, RQ WKLV 1RYHPEHU7KHGLVWULFWFRXUWFRQFOXGHGWKDW DOWHUQDWLYH JURXQG  7KH PHULW RI 0XOKDOOjV 7LWOH 9,, UHWDOLDWLRQFODLPDJDLQVWWKHDWWRUQH\JHQHUDOLVGLVFXVVHGLQ LQWKHILQDODQDO\VLV0XOKDOOKDVDEVROXWHO\QRWKLQJWR WKHQH[WVHFWLRQ UHIXWH WKH XQHTXLYRFDO VWDWHPHQWV RI WKH LQGLYLGXDOV LQYROYHGWKDWQHLWKHU0HWFDOIHQRU5D\NQHZWKDW0XOKDOO % 6XPPDU\ sXGJPHQW RQ 0XOKDOOjV 7LWOH 9,, ZDVOLVWHGDVDZLWQHVVIRU>+HQGHUVRQ@1RWKLQJZDV 5HWDOLDWLRQ&ODLP UHYHDOHG LQ GLVFRYHU\ WR VXEVWDQWLDWH RU EROVWHU WKLV LQIHUHQFHRIUHWDOLDWLRQJOHDQHGVROHO\IURPWKHWLPLQJRI :HUHYLHZWKHJUDQWRIVXPPDU\MXGJPHQWGHQRYR$VZH WKHDUULYDORIWKHFRPSODLQWLQWKHRIILFHDQGWKHGUDIWLQJ H[SODLQHGLQ(PSOR\HUV,QVXUDQFHRI:DXVDXY3HWUROHXP DQGVHQGLQJRIWKHOHWWHU 6SHFLDOLWLHV,QF)GWK&LU s$DW 7KH PRYLQJ SDUW\ QHHG QRW VXSSRUW LWV PRWLRQ ZLWK HYLGHQFH GLVSURYLQJ WKH QRQPRYLQJ SDUW\jV FODLP EXW 7KLVWLPHO\DSSHDOIROORZHG QHHGRQO\mµVKRZ>@jnWKDWLVSRLQW>@RXWWRWKHGLVWULFW FRXUWnWKDWWKHUHLVDQDEVHQFHRIHYLGHQFHWRVXSSRUW ,,$1$/<6,6 WKHQRQPRYLQJSDUW\jVFDVHl&HORWH[&RUSY&DWUHWW  86     7KH SLYRWDO TXHVWLRQ LV $$SSHOODWHsXULVGLFWLRQ ZKHWKHU WKH SDUW\ EHDULQJ WKH EXUGHQ RI SURRI KDV SUHVHQWHGDMXU\TXHVWLRQDVWRHDFKHOHPHQWRILWVFDVH $VQRWHGVXSUDWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJWKH)%, &HORWH[  86 DW   7KH SODLQWLII PXVW SUHVHQW VXPPDU\MXGJPHQWIDLOHGWRDGGUHVVWKHVWDWXVRI0XOKDOOjV PRUHWKDQDPHUHVFLQWLOODRIHYLGHQFHLQVXSSRUWRIKLV FODLP DJDLQVW WKH DWWRUQH\ JHQHUDO  7KLV ZDV PHUHO\ D SRVLWLRQWKHSODLQWLIIPXVWSUHVHQWmHYLGHQFHRQZKLFK WHFKQLFDOHUURUDVWKHGLVWULFWFRXUWFOHDUO\LQWHQGHGWRJUDQW WKH MXU\ FRXOG UHDVRQDEO\ ILQG IRU WKH SODLQWLIIl VXPPDU\MXGJPHQWWRERWKGHIHQGDQWVDQGLVVXHDILQDORUGHU $QGHUVRQ Y /LEHUW\ /REE\ ,QF  86   LQWKHFDVH6HHs$DW2UGHUm>7@KLVLVDILQDORUGHUl m7KHµPHUHSRVVLELOLW\jRIDIDFWXDOGLVSXWHLVQRW 6HHDOVRs$DW'RFNHWm7KLVLVDILQDORUGHUl HQRXJKl0LWFKHOOY7ROHGR+RVS)G 'HVSLWHWKHFOHDULQWHQWRIWKHGLVWULFWFRXUWZHPXVWILUVW WK&LUTXRWLQJ*UHJJY$OOHQ%UDGOH\&R DGGUHVV ZKHWKHU WKH GLVWULFW FRXUW LQ IDFW LVVXHG D ILQDO )GWK&LU  DSSHDODEOHRUGHULQWKHSUHVHQWFDVH7KH1LQWK&LUFXLWKDV ,GDWSDUDOOHOFLWDWLRQVRPLWWHG KHOGWKDWWKHGLVWULFWFRXUWjVLQDGYHUWHQWRPLVVLRQRIDSDUW\jV QDPHGRHVQRWGHIHDWWKHDSSHOODWHFRXUWjVMXULVGLFWLRQZKHUH :HKDYHKHOGWKDWWRHVWDEOLVKDSULPDIDFLHFDVHRI7LWOH WKH GLVWULFW FRXUW mFOHDUO\ LQWHQGHGl LWV JUDQW RI VXPPDU\ 9,,UHWDOLDWLRQDSODLQWLIIPXVWVKRZWKDWmSODLQWLIIHQJDJHG MXGJPHQWWRFRQVWLWXWHDILQDODSSHDODEOHRUGHUsRKQVRQY  0XOKDOOY$VKFURIWHWDO 1R 1R 0XOKDOOY$VKFURIWHWDO 

0HOW]HU  )G   WK &LU FHUW GHQLHG  6LPLODUO\UHPDQGLQJWKHSUHVHQWFDVHIRUHQWU\RIDQRUGHU 86:HDGRSWWKLVDSSURDFKDQGWUHDWWKHGLVWULFW JUDQWLQJVXPPDU\MXGJPHQWWRWKHDWWRUQH\JHQHUDOEHIRUH FRXUWjV 1RYHPEHU   RUGHU DV D ILQDO RUGHU FRPLQJ UHYLHZLQJWKDWMXGJPHQWRQWKHPHULWVZRXOGPHUHO\PDNH ZLWKLQWKLVFRXUWjVMXULVGLFWLRQSXUVXDQWWR86&† m>Z@KHHOVVSLQIRUQRSUDFWLFDOSXUSRVHl7KH$SSHOOHHV ZKRUDLVHWKLVLVVXHLQWKHLUEULHIUHTXHVWWKDWZHGLVPLVVWKH 7KLV DSSURDFK PDNHV VHQVH EHFDXVH WKH GLVWULFW FRXUWjV SUHVHQWDSSHDOUHPDQGWKHFDVHWRWKHGLVWULFWFRXUWIRUHQWU\ RUGHU WHUPLQDWHG WKH OLWLJDWLRQ RQ WKH PHULWV  6HH 6(& Y RI D ILQDO RUGHU DQG WKHQ FRQVLGHU WKH FDVH RQ WKH PHULWV %DVLF(QHUJ\ $IILOLDWHG5HV,QF)GWK ZLWKRXWIXUWKHUEULHILQJRURUDODUJXPHQW6HH$SSHOOHHVj%U &LUm$µILQDOGHFLVLRQjJHQHUDOO\LVRQHZKLFKHQGV DW    %XW VXFK DQ DSSURDFK ZRXOG VHUYH QR SUDFWLFDO WKHOLWLJDWLRQRQWKHPHULWVDQGOHDYHVQRWKLQJIRUWKHFRXUWWR SXUSRVH,QVWHDGZHZLOOSXUVXHDPRUHSUDJPDWLFDSSURDFK GR EXW H[HFXWH WKH MXGJPHQWl TXRWLQJ &DWOLQ Y 8QLWHG WUHDWLQJWKHGLVWULFWFRXUWjVRUGHUDVDILQDODSSHDODEOHRUGHU 6WDWHV86 ,QDGGLWLRQWKLVDSSURDFK DQGWKXVSURFHHGLQJWRWKHPHULWVRIWKHFDVH LVZDUUDQWHGJLYHQWKDWQHLWKHUSDUW\ZRXOGEHSUHMXGLFHGE\ WUHDWLQJWKHFRXUWjVRUGHUDVILQDO,Q%DQNHUV7UXVW&RY 0RUHRYHU WKLV SUDJPDWLF DSSURDFK LV DSSURSULDWH ZKHUH 0DOOLV86WKH6XSUHPH&RXUWFRQVLGHUHG WKHUHLVUHDOO\RQO\RQHGHIHQGDQWLQDFDVHnLQWKLVFDVHWKH WKHLVVXHmZKHWKHUDGHFLVLRQRIDGLVWULFWFRXUWFDQEHDµILQDO DWWRUQH\JHQHUDO7KH$SSHOOHHVDUHFRUUHFWLQDUJXLQJRQ GHFLVLRQj IRU SXUSRVHV RI †  LI QRW VHW IRUWK RQ D DSSHDOWKDWWKH)%,LVQRWDSURSHUGHIHQGDQWLQD7LWOH9,, GRFXPHQWVHSDUDWHIURPWKHRSLQLRQlDVUHTXLUHGE\)HGHUDO DFWLRQ,Q+DQFRFNY(JJHU)GWK&LUZH 5XOHRI&LYLO3URFHGXUH,GDW7KH&RXUWFRQFOXGHG FRQVWUXHG86&†HFZKLFKmPDQGDWHVZKR WKDW WKH VHSDUDWHGRFXPHQW UXOH FRXOG EH ZDLYHG E\ WKH PD\EHDSURSHUGHIHQGDQWLQFLYLODFWLRQVEURXJKWE\IHGHUDO SDUWLHVDWOHDVWZKHUHmWKH'LVWULFW&RXUWFOHDUO\HYLGHQFHGLWV HPSOR\HHV WR HQIRUFH ULJKWV XQGHU 7LWOH 9,,l LG DW  DV LQWHQWWKDWWKHRSLQLRQDQGRUGHUIURPZKLFKDQDSSHDOZDV UHTXLULQJ WKDW SODLQWLIIV VXLQJ VXEXQLWV RI FDELQHWOHYHO WDNHQZRXOGUHSUHVHQWWKHILQDOGHFLVLRQLQWKHFDVHl,GDW GHSDUWPHQWVQDPHWKHUHOHYDQWGHSDUWPHQWKHDGDVGHIHQGDQW ,QUHDFKLQJWKLVFRQFOXVLRQWKH&RXUWUHDVRQHGWKDWWKH VHHLGDW,Q+DQFRFNWKHSODLQWLIIVXHGWKHFRPPLVVLRQHU VHSDUDWHGRFXPHQW UXOH ZDV LQWHQGHG mWR FODULI\ ZKHQ WKH RIWKH,56IRUUDFLDOGLVFULPLQDWLRQ7KHGLVWULFWFRXUWJUDQWHG WLPH IRU DSSHDO    EHJLQV WR UXQlLG DW  DQG WKDW LWV GHIHQGDQWjV PRWLRQ WR GLVPLVV FRQFOXGLQJ WKDW WKH ,56 DSSOLFDWLRQZKHUHWKHWLPHOLQHVVRIDQDSSHDOZDVQRWDWLVVXH FRPPLVVLRQHU ZDV QRW D SURSHU GHIHQGDQW XQGHU † H ZRXOGPHUHO\FDXVHGHOD\ F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m>3@UDJPDWLF DVVHVVPHQWV RI WKH DSSHDOZRXOGWKHQEHWDNHQ:KHHOVZRXOGVSLQIRUQR GLVWULFW FRXUW DFWLRQV PD\ VKRZ WKDW LQ IDFW ILQDOLW\ KDV UHVXOWHG IURP SUDFWLFDOSXUSRVH GLVSRVLWLRQ DV WR DOO SDUWLHV    3DUWLHV ZKR KDYH EHHQ GLVPLVVHG GH IDFWR ZLOO EH FRXQWHG DV LI DFWXDOO\ GLVPLVVHG    1RQH RI WKHVH SUDFWLFHV FDXVHV DQ\ GLIILFXOW\l $ &KDUOHV $ODQ :ULJKW $UWKXU 5 0LOOHU ,GDW (GZDUG + &RRSHU )HGHUDO 3UDFWLFH DQG 3URFHGXUH †  DW  G HG  IRRWQRWHV RPLWWHG