Scotty's Contr Stone v. United States

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   6FRWW\jV&RQWUDFWLQJDQG 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU 6WRQH,QFY8QLWHG6WDWHV )LOH 1DPH DS

BBBBBBBBBBBBBBBBB 81,7('67$7(6&28572)$33($/6 &2816(/ )257+(6,;7+&,5&8,7 $5*8('  5REHUW & :HEE )5267 %52:1 72'' BBBBBBBBBBBBBBBBB //&/RXLVYLOOH.HQWXFN\IRU$SSHOODQWsXGLWK$+DJOH\ '(3$570(17 2) s867,&( 7$; ',9,6,21 :DVKLQJWRQ '& IRU $SSHOOHH  21 %5,()  5REHUW & 6&277

7KH +RQRUDEOH $YHUQ &RKQ 8QLWHG 6WDWHV 6HQLRU 'LVWULFW sXGJH IRU WKURXJKWD[\HDUVDQGZKHWKHUsDPHV'6FRWWKDV WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ FRPPLWWHG DQ\ RIIHQVH XQGHU WKH LQWHUQDO UHYHQXH ODZVl

 1R 6FRWW\jV&RQWUDFWLQJDQG   6FRWW\jV&RQWUDFWLQJDQG 1R 6WRQH,QFY8QLWHG6WDWHV 6WRQH,QFY8QLWHG6WDWHV

$PRQJ RWKHU WKLQJV WKH VXPPRQVHV UHTXHVWHG WHVWLPRQ\ VXPPRQV KDV WKH ULJKW WR EULQJ D SURFHHGLQJ WR TXDVK WKH UHJDUGLQJ6FRWW\jVWD[UHFRUGV VXPPRQV  8QGHU  86& † D  6FRWW\jV ZDV HQWLWOHG WR QRWLFH RI WKH VXPPRQVHV DW LVVXH EHFDXVH WKH 2QsXO\6FRWW\jVILOHGWKLVDFWLRQVHHNLQJWRTXDVK VXPPRQVHVUHTXHVWHGWHVWLPRQ\UHODWLQJWR6FRWW\jVUHFRUGV WKH VXPPRQVHV  ,Q UHVSRQVH WKH JRYHUQPHQW PRYHG IRU 0RUHRYHU6FRWW\jVLVQRWDVVHUWLQJDULJKWSHUVRQDOWR6FRWW VXPPDU\HQIRUFHPHQWRIWKHVXPPRQVHV6FRWW\jVFRQWHQGHG ZKHQLWFODLPVWKDWWKH,56H[FHHGHGLWVDXWKRULW\XQGHU WKDWWKH,56LVVXHGWKHVXPPRQVHVLQEDGIDLWKEHFDXVHWKH 86&†E\LVVXLQJWKHVXEMHFWVXPPRQVHVDQGWKHWZR ,56 LVVXHG WKHP IRU WKH VROH SXUSRVH RI D FULPLQDO FDVHV FLWHG E\ WKH JRYHUQPHQW RQ WKLV LVVXH GR QRW KROG LQYHVWLJDWLRQ)XUWKHUPRUH6FRWW\jVDUJXHGWKDWHQIRUFHPHQW RWKHUZLVH 8QLWHG6WDWHVY(TXLWDEOH7UXVW&R)G RIWKHVXPPRQVHVZRXOGYLRODWH.HQWXFN\jVDFFRXQWDQWFOLHQW   WK &LU  KROGLQJ WKDW RQH FDQQRW DVVHUW SULYLOHJH VRPHRQH HOVHjV )LIWK $PHQGPHQW ULJKWV XQGHU  86& †  :ULJKW Y 8QLWHG 6WDWHV  ) 6XSS   7KH GLVWULFW FRXUW GHQLHG 6FRWW\jV SHWLWLRQ WR TXDVK DQG 0')ODKROGLQJWKDWRQHFDQQRWDVVHUWmLVVXHVWKDW JUDQWHGWKHJRYHUQPHQWjVPRWLRQIRUVXPPDU\HQIRUFHPHQW DUHRIPHDQLQJIXOFRQFHUQRQO\WRWKHWKLUGSDUW\UHFRUGNHHSHU $OWKRXJKLWIRXQGWKDWWKLVFRXUWKDGQRW\HWGHFLGHGWKHLVVXH EHFDXVHWKH\LQYROYHLWVEXUGHQWRSURGXFHLQIRUPDWLRQl WKHGLVWULFWFRXUWUHOLHGXSRQRSLQLRQVIURPRWKHUFLUFXLWVLQ FRQFOXGLQJWKDWWKH,56PD\SURSHUO\LVVXHVXPPRQVHVIRU 7KH VHFRQG SUHOLPLQDU\ DUJXPHQW DVVHUWHG E\ WKH WKHVROHSXUSRVHRIDFULPLQDOLQYHVWLJDWLRQ,QDGGLWLRQWKH JRYHUQPHQWLVWKDWWKHVXEMHFWVXPPRQVHVDUHYDOLGQRPDWWHU GLVWULFW FRXUW IRXQG WKDW .HQWXFN\jV DFFRXQWDQWFOLHQW KRZWKHVWDWXWRU\LQWHUSUHWDWLRQTXHVWLRQLVUHVROYHGEHFDXVH SULYLOHJH GRHV QRW SUHYHQW HQIRUFHPHQW RI YDOLGO\ LVVXHG WKH VXPPRQVHV ZHUH LVVXHG IRU FLYLO DV ZHOO DV FULPLQDO VXPPRQVHV LQYHVWLJDWRU\SXUSRVHV7KHGLVWULFWFRXUWKRZHYHUGLGQRW UHDFKWKLVIDFWXDOTXHVWLRQDQGLQVWHDGKHOGWKDWWKH,56PD\ 7KLV DSSHDO SUHVHQWV D QRYHO OHJDO LVVXH IRU WKLV FRXUW LVVXHVXPPRQVHVIRUSXUHO\FULPLQDOLQYHVWLJDWRU\SXUSRVHV :KHWKHUWKH,56PD\YDOLGO\LVVXHDVXPPRQVSXUVXDQWWR XQGHU †   :H GHFOLQH WKH JRYHUQPHQWjV LQYLWDWLRQ WR 86&†DVDPHQGHGLQIRUWKHVROHSXUSRVHRID PDNH LQLWLDO ILQGLQJV RI IDFW UHJDUGLQJ ZKHWKHU WKH FULPLQDO LQYHVWLJDWLRQ  %HIRUH DGGUHVVLQJ WKLV TXHVWLRQ RI VXPPRQVHV ZHUH LVVXHG IRU SDUWO\ FLYLO LQYHVWLJDWRU\ VWDWXWRU\ LQWHUSUHWDWLRQ KRZHYHU ZH PXVW FRQIURQW WZR SXUSRVHV  :H LQVWHDG UHYLHZ WKH GLVWULFW FRXUWjV OHJDO SUHOLPLQDU\DUJXPHQWVPDGHE\WKHJRYHUQPHQW GHWHUPLQDWLRQWKDWXQGHU†DVDPHQGHGLQWKH,56 PD\YDOLGO\LVVXHVXPPRQVHVVROHO\IRUFULPLQDOLQYHVWLJDWRU\ )LUVW LQ DQ DUJXPHQW QRW UDLVHG EHORZ WKH JRYHUQPHQW SXUSRVHV DVVHUWVWKDW6FRWW\jVGRHVQRWKDYHVWDQGLQJWRFKDOOHQJHWKH VXPPRQVHV RQ WKH EDVLV WKDW WKH\ ZHUH LVVXHG IRU WKH VROH ,QWKH6XSUHPH&RXUWGHFLGHGWKDWWKH,56PD\QRW SXUSRVH RI D FULPLQDO LQYHVWLJDWLRQ EHFDXVH 6FRWW QRW YDOLGO\ LVVXH D VXPPRQV SXUVXDQW WR †  IRU WKH VROH 6FRWW\jVZDVWKHVXEMHFWRIWKHFULPLQDOLQYHVWLJDWLRQ:KLOH SXUSRVH RI D FULPLQDO LQYHVWLJDWLRQ HYHQ LI WKH FULPLQDO LVVXHVRIVWDQGLQJZKLFKDUHMXULVGLFWLRQDOLQQDWXUHPD\EH LQYHVWLJDWLRQKDVQRW\HWEHHQUHIHUUHGWRWKH'HSDUWPHQWRI FRQVLGHUHGIRUWKHILUVWWLPHRQDSSHDO8QLWHG6WDWHVY9DQ sXVWLFHIRUSURVHFXWLRQ8QLWHG6WDWHVY/D6DOOH1DWjO%DQN  )G   WK &LU  WKH JRYHUQPHQWjV 867KH&RXUWH[DPLQHGWKHWH[WRI DUJXPHQW QHYHUWKHOHVV IDLOV  8QGHU  86& †  DV LW H[LVWHG LQ  DQG IRXQG WKDW &RQJUHVV KDG † E  $ DQ\ HQWLW\ WKDW LV HQWLWOHG WR QRWLFH RI D 1R 6FRWW\jV&RQWUDFWLQJDQG   6FRWW\jV&RQWUDFWLQJDQG 1R 6WRQH,QFY8QLWHG6WDWHV 6WRQH,QFY8QLWHG6WDWHV

H[SOLFLWO\ OLPLWHG WKH SXUSRVHV IRU ZKLFK WKH ,56 KDG WKH RUUHWXUQLQIRUPDWLRQUHODWLQJWRVXFKSHUVRQl86& DXWKRULW\WRLVVXHVXPPRQVHV7KH&RXUWVWDWHG †G  ,Q†&RQJUHVVKDVEHVWRZHGXSRQWKH6HUYLFHWKH %HFDXVH†QRZJUDQWVWKH,56WKHDXWKRULW\WRLVVXH DXWKRULW\WRVXPPRQSURGXFWLRQIRUIRXUSXUSRVHVRQO\ VXPPRQVHV IRU WKH SXUSRVH RI LQYHVWLJDWLQJ mDQ\ RIIHQVHl IRUmDVFHUWDLQLQJWKHFRUUHFWQHVVRIDQ\UHWXUQPDNLQJD UHODWLQJWRWKHWD[FRGHZHFRQFOXGHWKDWWKH,56PD\YDOLGO\ UHWXUQ ZKHUH QRQH KDV EHHQ PDGH GHWHUPLQLQJ WKH LVVXHVXPPRQVHVIRUWKHSXUSRVHRILQYHVWLJDWLQJDFULPLQDO OLDELOLW\RIDQ\SHUVRQIRUDQ\LQWHUQDOUHYHQXHWD[RU RIIHQVHHYHQLIWKDWLVWKHVROHSXUSRVHIRUWKHVXPPRQVHV FROOHFWLQJ DQ\ VXFK OLDELOLW\l &RQJUHVV WKHUHIRUH $FFRUGLQJ WR WKH SODLQ ODQJXDJH RI WKH VWDWXWH WKH ,56jV LQWHQGHG WKH VXPPRQV DXWKRULW\ WR EH XVHG WR DLG WKH DXWKRULW\WRLVVXHVXPPRQVHVIRUWKHSXUSRVHRILQYHVWLJDWLQJ GHWHUPLQDWLRQDQGFROOHFWLRQRIWD[HV7KHVHSXUSRVHVGR DQ\RIIHQVHUHODWLQJWRWKHWD[FRGHLVH[WLQJXLVKHGRQO\ZKHQ QRW LQFOXGH WKH JRDO RI ILOLQJ FULPLQDO FKDUJHV DJDLQVW WKHLQYHVWLJDWLRQLVUHIHUUHGWRWKH'HSDUWPHQWRIsXVWLFH7KH FLWL]HQV&RQVHTXHQWO\VXPPRQVDXWKRULW\GRHVQRWH[LVW VWDWXWHGRHVQRWVD\WKDWWKH,56PD\LVVXHVXPPRQVHVIRUWKH WRDLGFULPLQDOLQYHVWLJDWLRQVVROHO\ SXUSRVHRILQYHVWLJDWLQJDQ\RIIHQVHXQOHVVWKHVROHSXUSRVH LV WR LQYHVWLJDWH D FULPLQDO RIIHQVH  &I 8QLWHG 6WDWHV Y ,GDWQsXVWLFH6WHZDUWMRLQHGE\WKUHHRWKHUMXVWLFHV $UWKXUD@sXVWLFH'HSDUWPHQWUHIHUUDOLV ZKLFKDOORZVLQTXLU\LQWRµDQ\RIIHQVHjVRORQJDVWKHFDVH LQ HIIHFWl DV WKH WLPH ZKHQ WKH ,56 mUHFRPPHQG>V@ WR WKH KDVQRWEHHQWXUQHGRYHUWRWKHsXVWLFH'HSDUWPHQWl8QLWHG $WWRUQH\*HQHUDODJUDQGMXU\LQYHVWLJDWLRQRIRUWKHFULPLQDO 6WDWHVY6FKPLGW)GQWK&LU SURVHFXWLRQRIVXFKSHUVRQlRUZKHQmDQ\UHTXHVWLVPDGH UHO\LQJRQOHJLVODWLYHKLVWRU\/D0XUDY8QLWHG6WDWHV XQGHUVHFWLRQK  %IRUWKHGLVFORVXUHRIDQ\UHWXUQ )G   Q  WK &LU  UHO\LQJ RQ OHJLVODWLYH 1R 6FRWW\jV&RQWUDFWLQJDQG   6FRWW\jV&RQWUDFWLQJDQG 1R 6WRQH,QFY8QLWHG6WDWHV 6WRQH,QFY8QLWHG6WDWHV

KLVWRU\WRFRQFOXGHWKDW&RQJUHVVDPHQGHG†LQ &R  86 DW  KROGLQJ WKDW WKH &RXUW PD\ QRW EHFDXVH WKH UXOH DQQRXQFHG LQ /D6DOOH 1DWLRQDO %DQN FLUFXPVFULEHWKHEURDGDXWKRULW\JUDQWHGWKH,56E\† mVSDZQHG SURWUDFWHG OLWLJDWLRQ DQG IUXVWUDWHG WKH VXPPDU\ ,QDQ\HYHQWWKHKROGLQJLQ6WXDUWLVQRWFRQWUDU\WRDQGLVLQ QDWXUHRIHQIRUFHPHQWSURFHHGLQJVl IDFWFRQVLVWHQWZLWKRXUFRQFOXVLRQWKDWWKH,56PD\YDOLGO\ LVVXH VXPPRQVHV IRU WKH SXUSRVH RI LQYHVWLJDWLQJ FULPLQDO 6FRWW\jVKRZHYHUFRQWHQGVWKDWWKHRSSRVLWHFRQFOXVLRQLV RIIHQVHVHYHQLIWKDWLVWKHVROHSXUSRVHVRORQJDVWKHUHLVQR VXSSRUWHGE\6XSUHPH&RXUWSUHFHGHQW6FRWW\jVFLWHV8QLWHG sXVWLFH'HSDUWPHQWUHIHUUDOLQHIIHFW 6WDWHV Y 6WXDUW  86    LQ ZKLFK WKH 6XSUHPH &RXUW KHOG WKDW †  GRHV QRW SUHYHQW WKH ,56 6FRWW\jV DOVR UHOLHV XSRQ WZR SUHYLRXV 6L[WK &LUFXLW IURPLVVXLQJVXPPRQVHVSXUVXDQWWRDWUHDW\ZLWK&DQDGDIRU RSLQLRQVLQVXSSRUWRILWVSRVLWLRQ1HLWKHURIWKHVHRSLQLRQV WKHSXUSRVHRILQYHVWLJDWLQJFULPLQDOYLRODWLRQVRI&DQDGLDQ KRZHYHUDGGUHVVHVWKHLVVXHRQDSSHDOKHUH,Q8QLWHG6WDWHV WD[ODZ%HIRUHUHDFKLQJWKLVKROGLQJWKH&RXUWGLVFXVVHG Y%HHEH)GWK&LUWKLVFRXUWDIILUPHGD /D6DOOH1DWLRQDO%DQNjVKROGLQJmWKDWWKH,56PD\QRWLVVXH GLVWULFW FRXUWjV ILQGLQJ WKDW WKH ,56 DFWHG LQ EDG IDLWK E\ D VXPPRQV RQFH LW KDV UHFRPPHQGHG SURVHFXWLRQ WR WKH LVVXLQJDVXPPRQVWRDLGDSXUHO\FULPLQDOLQYHVWLJDWLRQ7KH sXVWLFH'HSDUWPHQWQRUPD\LWFLUFXPYHQWWKLVUHTXLUHPHQW %HHEHFRXUWKRZHYHUVLPSO\FLWHG/D6DOOH1DWLRQDO%DQN E\ GHOD\LQJ VXFK D UHFRPPHQGDWLRQ LQ RUGHU WR JDWKHU ZLWKRXWGLVFXVVLQJWKHDPHQGPHQWWR†,GDW DGGLWLRQDOLQIRUPDWLRQl,GDW7KH&RXUWLQ6WXDUW 1RWKLQJ LQ WKH %HHEH RSLQLRQ VXJJHVWV WKDW WKH FRXUW ZDV WKHQ VWDWHG LQ GLFWD UHOLHG XSRQ E\ 6FRWW\jV WKDW WKH  SUHVHQWHGZLWKWKHLVVXHRILQWHUSUHWLQJ†DVDPHQGHGLQ DPHQGPHQWWR†mFRGLILHGWKHHVVHQFHRIRXUKROGLQJl   5DWKHU E\ FLWLQJ /D6DOOH 1DWLRQDO %DQN ZLWKRXW LQ/D6DOOH1DWLRQDO%DQN,GDW PHQWLRQLQJWKHDPHQGPHQWWR†WKH%HHEHFRXUW ZDVDSSDUHQWO\DSSO\LQJ†DVLWH[LVWHGEHIRUH,Q $OWKRXJKWKH6WXDUW&RXUWGLGQRWH[SOLFLWO\FODULI\ZKDWLW DQ\HYHQWWKH%HHEHRSLQLRQGRHVQRWRIIHUDQ\JXLGDQFHLQ YLHZHGDVWKHmHVVHQFHlRIWKHKROGLQJLQ/D6DOOH1DWLRQDO %DQNLWLVDSSDUHQWWKDWWKH&RXUWZDVUHIHUULQJWRWKHSRUWLRQ RIWKHKROGLQJLQ/D6DOOH1DWLRQDO%DQNWKDWWKH,56PD\QRW LVVXHDVXPPRQVRQFHLWKDVUHFRPPHQGHGSURVHFXWLRQWRWKH sXVWLFH'HSDUWPHQW&UXFLDOWRWKH&RXUWjVGHFLVLRQWRXSKROG  :KLOH WKH %HHEH FRXUW ZDV QRW H[SOLFLW UHJDUGLQJ ZKLFK YHUVLRQ RI †  LW ZDV DSSO\LQJ WKH JRYHUQPHQWjV EULHI LQ WKH %HHEH FDVH FRQILUPV HQIRUFHPHQW RI WKH VXPPRQVHV DW LVVXH LQ 6WXDUW ZDV WKH WKDW WKH FRXUW ZDV DSSO\LQJ †  DV LW H[LVWHG EHIRUH  $V &RXUWjVVWULFWLQWHUSUHWDWLRQRI†GZKLFKSURYLGHVWKDW DGGHQGXP & WR LWV EULHI LQ WKH SUHVHQW FDVH WKH JRYHUQPHQW VXEPLWWHG D

WKH,56PD\QRWLVVXHDVXPPRQVRQFHDmsXVWLFH'HSDUWPHQW FRS\ RI D SDJH RI LWV EULHI LQ WKH %HHEH FDVH 7KLV H[FHUSW PDNHV FOHDU WKDW LQ WKH %HHEH FDVH WKH JRYHUQPHQW FRQFHGHG WKDW WKH  DPHQGPHQW UHIHUUDO LV LQ HIIHFWl  %HFDXVH WKHUH ZDV QR sXVWLFH WR †  ZDV QRW DSSOLFDEOH EHFDXVH WKH VXPPRQV LQ %HHEH ZDV LVVXHG 'HSDUWPHQWUHIHUUDOLQHIIHFWWKH&RXUWLQ6WXDUWIRXQGWKDW SULRU WR WKH HIIHFWLYH GDWH RI WKH  DPHQGPHQW :H WDNH MXGLFLDO QRWLFH †GLGQRWEDUHQIRUFHPHQWRIWKHVXPPRQVHVHYHQLIWKH RI WKLV SDJH RI D EULHI VXEPLWWHG DV SDUW RI WKH SURFHHGLQJV LQ D GLIIHUHQW &DQDGLDQWD[LQYHVWLJDWLRQKDGUHDFKHGDVWDJHDQDORJRXVWR FDVH 6HH /\RQV Y 6WRYDOO  )G   Q WK &LU  WDNLQJ DsXVWLFH'HSDUWPHQWUHIHUUDO,GDW7KH&RXUWIRXQG MXGLFLDO QRWLFH RI EULHIV WKDW KDYH EHHQ ILOHG ZLWK D FRXUW RI UHFRUG 6FRWW\jV FRUUHFWO\ DVVHUWV WKDW MXGLFLDO QRWLFH RI D IDFW LV JHQHUDOO\ RQO\ mQRUHDVRQWRWKLQNWKDW>†G@PHDQVPRUHWKDQLWVD\Vl DSSURSULDWH ZKHQ WKHUH LV QR GLVSXWH UHJDUGLQJ WKH IDFW 6HH HJ ,OKDUGW DQGWKHKROGLQJLQ6WXDUWGHPRQVWUDWHVWKDWWKH&RXUWZLOOQRW Y 6DUD /HH &RUS  )G   WK &LU  6FRWW\jV FUHDWH DQ DGGLWLRQDO H[FHSWLRQ WR WKH ,56jV VXPPRQVLQJ KRZHYHU GRHV QRW GLVSXWH WKH UHOHYDQW IDFW WKDW WKH JRYHUQPHQW VXEPLWWHG DXWKRULW\XQGHU†,GDWVHHDOVR$UWKXU

WKLVDSSHDOEHFDXVHWKH%HHEHFRXUWGLGQRWGLVFXVVRUGHFLGH DXWKRULW\IRUWKHVROHSXUSRVHRIDFULPLQDOLQYHVWLJDWLRQEXW WKHLVVXHRIKRZWRLQWHUSUHWWKHDPHQGPHQWWR† WKH RQO\ DXWKRULW\ FLWHG IRU WKLV SURSRVLWLRQ LV DQ HDUOLHU 6HYHQWK&LUFXLWFDVHZKLFKH[SUHVVO\GHFOLQHVWRUHVROYHWKH ,QWKHXQSXEOLVKHGGHFLVLRQ8QLWHG6WDWHVY$KHH1R LVVXH RI KRZ WKH  DPHQGPHQW WR †  DIIHFWV WKH :/WK&LU)HEWKLVFRXUW KROGLQJLQ/D6DOOH1DWLRQDO%DQN8QLWHG6WDWHVY%HUJ UHMHFWHG D WD[SD\HUjV DUJXPHQW WKDW WKH ,56 KDG LVVXHG D )G   Q WK &LU  FLWLQJ 8QLWHG 6WDWHV Y VXPPRQVLQYLRODWLRQRI†6FRWW\jVUHOLHVXSRQGLFWDLQ 0LFKDXG)GWK&LU ,Q0LFKDXG WKH $KHH FDVH LQ ZKLFK WKH FRXUW UHVWDWHG WKH KROGLQJ RI WKH6HYHQWK&LUFXLWVLWWLQJHQEDQFUHFRJQL]HGWKHmGHEDWHl /D6DOOH1DWLRQDO%DQNZLWKRXWQRWLQJWKHDPHQGPHQW UHJDUGLQJZKHWKHUWKH,56PD\YDOLGO\LVVXHDVXPPRQVIRU WR†,GDW 7KH$KHHFRXUWQHYHUWKHOHVVIRXQGWKDW DVROHO\FULPLQDOSXUSRVHXQGHU†DVDPHQGHGLQ WKHVXPPRQVHVLVVXHGE\WKH,56ZHUHYDOLGEHFDXVHDPRQJ EXW WKH FRXUWjV PDMRULW\ H[SUHVVO\ GHFOLQHG WR UHVROYH WKH RWKHUWKLQJVWKH\ZHUHLVVXHGEHIRUHWKHPDWWHUZDVUHIHUUHG GHEDWH0LFKDXG)GDWQ6HYHQWK&LUFXLWsXGJH WRWKH'HSDUWPHQWRIsXVWLFH,G%HFDXVHWKH$KHHFRXUWGLG &RIIH\DXWKRUHGDFRQFXUULQJRSLQLRQLQ0LFKDXGLQZKLFKKH QRWDGGUHVVWKHLVVXHRILQWHUSUHWDWLRQRIWKHDPHQGPHQW DORQHH[SUHVVHGWKHYLHZWKDWWKHKROGLQJLQ/D6DOOH1DWLRQDO WR†$KHHGRHVQRWRIIHUDQ\JXLGDQFHLQWKLVDSSHDO %DQNZDVXQDIIHFWHGE\WKHDPHQGPHQWWR†,G DW,QKLVGLVVHQWMRLQHGE\WKUHHRWKHU6HYHQWK&LUFXLW 6FRWW\jVDOVRFLWHVGHFLVLRQVIURPWKH)LUVW)RXUWK)LIWK MXGJHVsXGJH3RVQHURIIHUHGDPRUHSHUVXDVLYHDQDO\VLVRI 6HYHQWKDQG1LQWK&LUFXLWVLQVXSSRUWRILWVSRVLWLRQ7KH WKHLVVXHDQGGHWHUPLQHGWKDWWKHSODLQODQJXDJHRI† GHFLVLRQVFLWHGE\6FRWW\jVIURPWKH)LUVW)LIWKDQG1LQWK PDNHVFOHDUWKDWWKH,56PD\LVVXHDVXPPRQVWRLQYHVWLJDWH &LUFXLWV DOO VLPSO\ UHVWDWH LQ GLFWD WKH KROGLQJ RI /D6DOOH DQ\ RIIHQVH HYHQ D VROHO\ FULPLQDO RIIHQVH ZLWK WKH RQO\ 1DWLRQDO %DQN ZLWKRXW GLVFXVVLQJ WKH  DPHQGPHQW WR H[FHSWLRQEHLQJLIWKHLQYHVWLJDWLRQKDVEHHQUHIHUUHGWRWKH †8QLWHG6WDWHVY/DZQ%XLOGHUVRI1HZ(QJODQG,QF sXVWLFH'HSDUWPHQW,GDW  )G   VW &LU  0D]XUHN Y 8QLWHG 6WDWHV)GWK&LU8QLWHG6WDWHVY ,QVXPWKHSODLQODQJXDJHRI†DVDPHQGHGLQ sRVH)GWK&LU7KHUHIRUHQRQH PDNHVFOHDUWKDWWKH,56KDVWKHDXWKRULW\WRLVVXHVXPPRQVHV RI WKHVH RSLQLRQV RIIHU DQ\ JXLGDQFH UHJDUGLQJ WKH SURSHU IRUWKHSXUSRVHRILQYHVWLJDWLQJmDQ\RIIHQVHlUHODWLQJWRWKH LQWHUSUHWDWLRQ RI WKH  DPHQGPHQW WR †   7KH WD[FRGHVRORQJDVWKHLQYHVWLJDWLRQKDVQRWEHHQUHIHUUHGWR GHFLVLRQFLWHGE\6FRWW\jVIURPWKH)RXUWK&LUFXLWDGGUHVVHV WKH'HSDUWPHQWRIsXVWLFH7KHVWDWXWHGRHVQRWFRQWDLQDQ LQ D IRRWQRWHWKHDPHQGPHQWWR†DQGFLWHVWKH H[FHSWLRQIRULQYHVWLJDWLQJSXUHO\FULPLQDORIIHQVHVDQGZH 6XSUHPH&RXUWjVGHFLVLRQLQ6WXDUWIRUWKHSURSRVLWLRQWKDW GHFOLQHWRFUHDWHVXFKDQH[FHSWLRQWRWKHVWDWXWHjVH[SUHVV WKH,56PD\QRWLVVXHDVXPPRQVIRUWKHVROHSXUSRVHRID JUDQWRIDXWKRULW\ FULPLQDOLQYHVWLJDWLRQ+LQW]HY,QWHUQDO5HYHQXH6HUY )GQWK&LURYHUUXOHGRQRWKHUJURXQGV $VDQDOWHUQDWLYHDUJXPHQW6FRWW\jVFODLPVWKDW.HQWXFN\jV &KXUFKRI6FLHQWRORJ\Y8QLWHG6WDWHV86Q DFFRXQWDQWFOLHQW SULYLOHJH FRGLILHG DW .56 †  7KLVIRRWQRWHKRZHYHULVGLFWDDQGLQRXURSLQLRQ SURWHFWV WKH LQIRUPDWLRQ VRXJKW E\ WKH ,56 LQ WKH VXEMHFW PLVVWDWHVWKHKROGLQJRI6WXDUW VXPPRQVHV7KH6XSUHPH&RXUWKRZHYHUKDVKHOGWKDWWKH ,56jVVXPPRQVLQJDXWKRULW\XQGHU†LVQRWOLPLWHGE\ 7KH GHFLVLRQ FLWHG E\ 6FRWW\jV IURP WKH 6HYHQWK &LUFXLW DQ\VWDWHODZDFFRXQWDQWFOLHQWSULYLOHJH$UWKXU

.HQWXFN\jV DFFRXQWDQWFOLHQW SULYLOHJH VWDWXWH KDV DQ DSSOLFDEOH H[FHSWLRQ IRU D mYDOLGO\ LVVXHG    VXPPRQV HQIRUFHDEOHE\RUGHURIDFRXUWl.56† E)RU ERWK RI WKHVH UHDVRQV 6FRWW\jV DOWHUQDWLYH DUJXPHQW LV XQDYDLOLQJ 6FRWW\jVVXJJHVWVWKDW$UWKXU