United States v. Gilmore

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

81,7(' 67$7(6 2) $0(5,&$ ;
3ODLQWLII$SSHOOHH 

 1R
Y 
!

.(9,1 *,/025( 
'HIHQGDQW$SSHOODQW 
1
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
1Rn3DWULFLD$*DXJKDQ'LVWULFWsXGJH
$UJXHG1RYHPEHU
'HFLGHGDQG)LOHG)HEUXDU\
%HIRUH&/$<DQG*,/0$1&LUFXLWsXGJHV('*$5
&KLHI'LVWULFWsXGJH

BBBBBBBBBBBBBBBBB
&2816(/
$5*8('  +HQU\ ) 'H%DJJLV &OHYHODQG 2KLR IRU
$SSHOODQW  6WHYHQ / sDFNVRQ $66,67$17 81,7('
67$7(6 $77251(< &OHYHODQG 2KLR IRU $SSHOOHH

7KH +RQRUDEOH 5 $OODQ (GJDU &KLHI 8QLWHG 6WDWHV 'LVWULFW sXGJH
IRU WKH (DVWHUQ 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ


 8QLWHG6WDWHVY*LOPRUH 1R

21 %5,()  +HQU\ ) 'H%DJJLV &OHYHODQG 2KLR IRU
$SSHOODQW  6WHYHQ / sDFNVRQ $66,67$17 81,7('
67$7(6$77251(<&OHYHODQG2KLRIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
('*$5 &KLHI 'LVWULFW sXGJH  .HYLQ 3 *LOPRUH
m*LOPRUHlZDVFRQYLFWHGE\DMXU\RIFRPPLWWLQJDVHULHVRI
HLJKW EDQN UREEHULHV LQ DQG DURXQG &OHYHODQG 2KLR
3URYLGLQJ QHZ PHDQLQJ WR WKH WHUP mUHSHDW RIIHQGHUl
*LOPRUH ZDV IRXQG WR KDYH UREEHG RQH EDQN IRXU WLPHV
DQRWKHUEDQNWKUHHWLPHVDQGDILQDOEDQNRQFH+HDSSHDOV
KLVFRQYLFWLRQRQHLJKWFRXQWVRIXQDUPHGEDQNUREEHU\
86& † D FRQWHQGLQJ WKDW WKHUH ZDV LQVXIILFLHQW
HYLGHQFH RI mLQWLPLGDWLRQl  *LOPRUH DOVR DVVHUWV WKDW WKH
GLVWULFW FRXUW HUUHG LQ GHQ\LQJ KLV UHTXHVW XQGHU  86&
†$IRUIXQGVWRKLUHDQLQYHVWLJDWRU:H$)),50
,
7KHVHULHVRIUREEHULHVEHJDQRQsXO\DQGHQGHG
RQ)HEUXDU\*LOPRUHXVHGDVLPLODUPRGXVRSHUDQGL
RQHDFKRFFDVLRQ
sXO\    &KDUWHU 2QH %DQN  /RUDLQ
$YHQXH&RXQW2QH*LOPRUHZHDULQJDEODFNEDVHEDOOKDW


7KH ILUVW DQG UHOHYDQW SDUDJUDSK RI  86& † D SURYLGHV
:KRHYHU E\ IRUFH DQG YLROHQFH RU E\ LQWLPLGDWLRQ WDNHV
RU DWWHPSWV WR WDNH IURP WKH SHUVRQ RU SUHVHQFH RI DQRWKHU   
DQ\ SURSHUW\ RU PRQH\ RU DQ\ RWKHU WKLQJ RI YDOXH EHORQJLQJ WR
RU LQ WKH FDUH FXVWRG\ FRQWURO PDQDJHPHQW RU SRVVHVVLRQ RI
DQ\ EDQN FUHGLW XQLRQ RU DQ\ VDYLQJV DQG ORDQ DVVRFLDWLRQ   
>V@KDOO EH ILQHG XQGHU WKLV WLWOH RU LPSULVRQHG QRW PRUH WKDQ
WZHQW\ \HDUV RU ERWK

 86& † D
 8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH 

$SSO\LQJWKHVHFULWHULDWR*LOPRUHjVFDVHLWLVHYLGHQWWKDW WXUQHGEDFNZDUGVGDUNJODVVHVDQGDIDNHEHDUGZHQWTXLFNO\
WKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQGHQ\LQJWKH WRDWHOOHUjVZLQGRZDQGKDQGHGWHOOHU5HEHFFD2OVRQDQHDWO\
PRWLRQV*LOPRUHjVGHIHQVHZDVQRWSODXVLEOH7KHHYLGHQFH KDQGZULWWHQGHPDQGQRWHWKDWUHDGm*LYHPH\RXUPRQH\EH
WKDWKHZDVWKHSHUSHWUDWRUZDVRYHUZKHOPLQJ*LOPRUHFDQ TXLHWl  2OVRQ IHOW VFDUHG IUR]H IRU D PRPHQW DQG WKHQ
SRLQWWRQRWKLQJWKDWFRXOGKDYHEHHQGRQHE\DQH[SHUWRUDQ KDQGHGRYHUKHUODUJHELOOV*LOPRUHUDQRXWRIWKHEDQNZLWK
LQYHVWLJDWRU WKDW KDG WKH SRWHQWLDO RI KHOSLQJ KLV FDVH 
*LOPRUHZDVQRWLQDQ\ZD\SUHMXGLFHGE\DODFNRIH[SHUWRU
LQYHVWLJDWLYH VHUYLFHV  $ GLVWULFW FRXUW QHHG QRW JUDQW DQ $XJXVW    &KDUWHU 2QH %DQN  &OLIWRQ
LQGLJHQWjVPRWLRQXQGHU†$RQWKHRIIFKDQFHWKDWWKH %RXOHYDUG &RXQW 7ZR  *LOPRUH DJDLQ ZRUH KLV EODFN
UHTXHVWHGVHUYLFHVPLJKWWXUQXSVRPHWKLQJ EDVHEDOOKDWRQEDFNZDUGVGDUNVXQJODVVHVDQGWKLVWLPHD
IDNHJRDWHHWKDWDFFRUGLQJWRVHQLRUWHOOHU(GZDUG.DVXQLF
$)),50(' mGLGQjWORRNULJKWl+HSURGXFHGDQRWHZKLFKVDLGm*LYH
PHWKHPRQH\lDQGm*LYHWKHQRWHEDFNl:KHQ.DVXQLF
EHJDQWRWDNHPRQH\RXWRIKLVGUDZHU*LOPRUHVDLGm1R
EDLWl,QWKHUHIOHFWLRQIURP*LOPRUHjVVXQJODVVHV.DVXQLF
VDZIHDULQKLPVHOIDQGKDQGHGRYHUPRQH\*LOPRUHOHIWWKH
EDQNZLWK
$XJXVW   &KDUWHU 2QH %DQN  /RUDLQ
$YHQXH&RXQW7KUHH%DFNDWWKHVLWHRIWKHILUVWKHLVW
*LOPRUH HQWHUHG WKH EDQN ZLWKRXW KLV FDS EXW ZHDULQJ
VXQJODVVHVDQGDQREYLRXVO\IDNHGDUNEHDUGDQGPXVWDFKH
7HOOHU 7RQ\D +DUWH LPPHGLDWHO\ VXUPLVHG IURP *LOPRUHjV
DFWLRQVDQGDSSHDUDQFHWKDWDUREEHU\ZDVLQSURJUHVV:KHQ
*LOPRUH DSSURDFKHG KHU WHOOHU ZLQGRZ KH KDQGHG KHU D
GHPDQGQRWH+DUWHZDVVFDUHGDQGGLGQRWZDQWWRORRNDW
WKH UREEHU  ,QVWHDG IHHOLQJ VLFN VKH KDQGHG RYHU VRPH
PRQH\DQGDG\HSDFNZLWKRXWUHDGLQJWKHQRWH*LOPRUHOHIW
WKHEDQN7KHDPRXQWWDNHQZDV$ZLWQHVVRXWVLGH
WKHEDQNREVHUYHG*LOPRUHUXQQLQJIURPWKHEDQNZLWKUHG
VPRNHFRPLQJRXWRIKLVVKLUW
2FWREHU&KDUWHU2QH%DQN&OLIWRQ
%RXOHYDUG&RXQW)RXU2QWKLVRFFDVLRQ*LOPRUHZRUHD
EHUHW RU mJROI KDWl DQG DQ REYLRXVO\ IDNH JRDWHH ZKLFK
ORRNHGWRWHOOHU6KDURQ+DOOOLNHWKHRQHKHKDGZRUQZKLOHDW
WKLV VDPH EDQN LQ $XJXVW  7KRXJK *LOPRUH ZDV ZHDULQJ
QHLWKHUKLVEDVHEDOOFDSQRUVXQJODVVHV+DOOUHFRJQL]HGKLP
IURPKLVSUHYLRXVYLVLW$JDLQ*LOPRUHSURGXFHGDGHPDQG
QRWHZKLFK+DOOGLGQRWUHDG6KHVWDUWHGWRKDQGRYHUWKH
 8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH 

PRQH\EXWZKHQVKHGLGQRWGRVRTXLFNO\HQRXJKWRVXLW GHIHQVHjlHPSKDVLVLQRULJLQDOTXRWLQJ8QLWHG6WDWHVY
*LOPRUHKHEHFDPHLUULWDWHGDQGVDLGm/HWjVJRlRUZRUGVWR $OGHQ)GWK&LU8QLWHG6WDWHVY
WKDWHIIHFW+HOHIWWKHEDQNZLWK /DEDQVDW)GWK&LUm>7KHGHIHQGDQW@
PXVW GHPRQVWUDWH ERWK WKDW UHDVRQDEO\ FRPSHWHQW FRXQVHO
1RYHPEHU3DUNYLHZ)HGHUDO6DYLQJV%DQN ZRXOGKDYHUHTXLUHGWKHDVVLVWDQFHRIWKHUHTXHVWHGH[SHUWIRU
&OLIWRQ%RXOHYDUG/DNHZRRG2KLR&RXQW)LYH D SD\LQJ FOLHQW DQG WKDW KH ZDV SUHMXGLFHG E\ WKH ODFN RI
'HFLGLQJWRWU\DGLIIHUHQWEDQN*LOPRUHZDONHGLQDJDLQ H[SHUWDVVLVWDQFHl8QLWHG6WDWHVY0DQQLQJ)G
ZHDULQJKLVEDVHEDOOFDSRQEDFNZDUGVDQGGDUNVXQJODVVHV  VW &LU  m>(@[SHUW VHUYLFHV KDYH EHHQ IRXQG
7KLV WLPH KH KDG QR IDFLDO KDLU IDNH RU OHJLWLPDWH  +H QHFHVVDU\ZKHQWKHSURIIHUHGH[SHUWWHVWLPRQ\ZDVSLYRWDOWR
VWHSSHGXSWRWHOOHU/HLVD+DZU\ONRjVZLQGRZ DQGKDQGHG WKHLQGLJHQWGHIHQGDQWjVGHIHQVHl0DQQLQJY1L[)G
RYHUDQRWHZKLFKUHDGm+DQGRYHUPRQH\l$IWHUDmIHZ WK&LUm>5@HIXVDOWRDXWKRUL]HIXQGVXQGHU
VHFRQGVLQVKRFNl*LOPRUHGHPDQGHGm1RZl+DZU\ONR 86&†$LVQRWUHYHUVLEOHHUURUDEVHQWFOHDUDQG
WHVWLILHGm,GLGQjWNQRZLIP\OLIHZDVLQGDQJHURULIKHKDG FRQYLQFLQJ HYLGHQFH RI SUHMXGLFHl  8QLWHG 6WDWHV Y
DZHDSRQRULIKHZDVJRLQJWRKLWPHl+DZU\ONRVWDWHGm, 3HUUHUD)GWK&LUm7RVKRZUHYHUVLEOH
ZDVMXVWVFDUHGIRUP\VHOIDQGMXVWZDQWHGLWWREHRYHUl6KH HUURU LQ D GLVWULFW FRXUW
V UHIXVDO WR DSSRLQW DQ H[SHUW D
TXLFNO\KDQGHGRYHUDQG*LOPRUHOHIWWKHEDQN GHIHQGDQW PXVW GHPRQVWUDWH WKDW WKH FRXUW
V UHIXVDO ZDV
SUHMXGLFLDOWRKLVGHIHQVHl8QLWHG6WDWHVY2OLYHU)G
'HFHPEHU&KDUWHU2QH%DQN&OLIWRQ G&LUm>0@RVWFRXUWVUHO\RQWKHMXGJPHQW
%RXOHYDUG&RXQW6L[%DFNDWWKLVEDQNEUDQFKIRUWKH RIWKHGHIHQVHDWWRUQH\LIKHPDNHVDUHDVRQDEOHUHTXHVWLQ
WKLUGWLPH*LOPRUHDJDLQZRUHKLVIDNHJRDWHHEXWQRFDS FLUFXPVWDQFHVLQZKLFKKHZRXOGLQGHSHQGHQWO\HQJDJHVXFK
+H ZDV UHFRJQL]HG E\ VHYHUDO WHOOHUV LQFOXGLQJ (GZDUG VHUYLFHVLIKLVFOLHQWZDVDEOHWRSD\IRUWKHPl7KLVFLUFXLW
.DVXQLFDVWKHSHUVRQZKRKDGSUHYLRXVO\UREEHGWKHEDQN KDVUHFRJQL]HGVRPHRIWKHVHYDU\LQJDSSURDFKHVEXWKDVQRW
*LOPRUHKDQGHGWHOOHU0LFKHOOH&RORQDQRWHWKDWVDLGm+DQG KHUHWRIRUHDGRSWHGDQ\UXOHRILWVRZQ6HH8QLWHG6WDWHVY
RYHU\RXUPRQH\l&RORQGLGVRDQG*LOPRUHOHIWZLWK 2VRED)GWK&LUILQGLQJWKDWGHQLDO
RIUHTXHVWIRULQYHVWLJDWLYHVHUYLFHVZDVSURSHUXQGHUDQ\RI
sDQXDU\    &KDUWHU 2QH %DQN  /RUDLQ WKH DSSURDFKHV XWLOL]HG E\ WKH 7KLUG (LJKWK DQG 1LQWK
$YHQXH&RXQW6HYHQ)RUWKHWKLUGWLPH*LOPRUHHQWHUHG &LUFXLWV
WKLVEUDQFK+HZRUHVXQJODVVHVDIDNHPXVWDFKHDQGDNQLW
FDS  +H KHOG XS D QRWH ZLWK WZR KDQGV WR WHOOHU 3HWHU :HV\QWKHVL]HWKHH[LVWLQJVWDQGDUGVRIRWKHUFLUFXLWV$Q
3RORPVN\+RZHYHUWR3RORPVN\WKHQRWHORRNHGEODQN LQGLJHQWGHIHQGDQWPD\REWDLQDXWKRUL]DWLRQIRULQYHVWLJDWLYH
:KHQ 3RORPVN\ VDZ WKLV KH DVNHG m:KDW"l  *LOPRUH H[SHUWRURWKHUVHUYLFHVXQGHU86&†$HXSRQ
UHVSRQGHGmWHOOHU@ ZRXOG EH PHW E\ IRUFHl   8QLWHG
GLVWULFWFRXUWjVGHQLDORIWKHPRWLRQVRQWKHLUPHULWV 6WDWHVY:DOGRQ)GWK&LUFLWDWLRQ
DQGLQWHUQDOTXRWDWLRQPDUNVRPLWWHG8QLWHG6WDWHVY3HUU\
&RXUWVKDYHWDNHQYDU\LQJDSSURDFKHVDVWRZKDWFULWHULDDUH  )G   WK &LU  FLWLQJ 8QLWHG 6WDWHV Y
WREHXVHGLQHYDOXDWLQJDQLQGLJHQWGHIHQGDQWjVPRWLRQXQGHU sRQHV  )G   WK &LU   :KHWKHU
86&†$IRULQYHVWLJDWLYHH[SHUWRURWKHUVHUYLFHV LQWLPLGDWLRQXQGHU86&†DH[LVWVLQDSDUWLFXODU
6HH8QLWHG6WDWHVY*RQ]DOHV)GQWK FDVHLVGHWHUPLQHGE\DQREMHFWLYHWHVWZKHWKHUDQRUGLQDU\
&LUm>'@HIHQGDQWVPXVWSURYLGHWKHGLVWULFWFRXUWZLWK SHUVRQLQWKHWHOOHUjVSRVLWLRQFRXOGUHDVRQDEO\LQIHUDWKUHDW
H[SOLFLW GHWDLO VKRZLQJ ZK\ WKH UHTXHVWHG VHUYLFHV DUH RIERGLO\KDUPIURPWKHGHIHQGDQWjVDFWV6HH8QLWHG6WDWHV
µQHFHVVDU\jWRDQDGHTXDWHGHIHQVHDQGZKDWWKHGHIHQGDQW Y+LOO)GWK&LU8QLWHG6WDWHVY
H[SHFWHG WR ILQG E\ XVLQJ WKH VHUYLFHVl 8QLWHG 6WDWHV Y %XUQV  )G   VW &LU  8QLWHG 6WDWHV Y
5RPDQ)GG&LUm>$@FRXUWVKRXOG :RRGUXS)GWK&LU8QLWHG6WDWHVY
ILUVW µVDWLVI\ LWVHOI WKDW D GHIHQGDQW PD\ KDYH D SODXVLEOH
 8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH 

0F&DUW\)GWK&LUVHHDOVR8QLWHG ,,,
6WDWHV Y 5RELQVRQ  )G   WK &LU 
DSSURYLQJGLVWULFWFRXUWjVMXU\LQVWUXFWLRQWKDWmLQWLPLGDWLRQ 7KUHHGD\VDIWHUDPRWLRQVGHDGOLQHVHWE\WKHGLVWULFWFRXUW
PXVW EH HVWDEOLVKHG E\ SURRI RI RQH RU PRUH DFWV RU KDGSDVVHGDQGVHYHQWHHQGD\VSULRUWRWULDO*LOPRUHILOHGDQ
VWDWHPHQWVRIWKHDFFXVHGZKLFKZHUHGRQHRUPDGHLQVXFK H[SDUWHPRWLRQSXUVXDQWWR86&†$HVHHNLQJ
DPDQQHUDQGXQGHUVXFKFLUFXPVWDQFHVDVZRXOGSURGXFHLQ IXQGVIRUDQLQYHVWLJDWRUDQGH[SHUW7KHGLVWULFWFRXUWGHQLHG
WKHRUGLQDU\SHUVRQIHDURIERGLO\KDUPl WKHPRWLRQLQDPDUJLQDOHQWU\*LOPRUHILOHGDQRWKHUVXFK
PRWLRQQLQHGD\VODWHU7KLVPRWLRQZDVDOVRGHQLHG E\D
7KHUHLVQRHYLGHQFHWKDW*LOPRUHHYHUFDUULHGDILUHDUPRU PDUJLQDO HQWU\  ,Q KLV PRWLRQV *LOPRUH DVVHUWHG WKDW KH
RWKHUZHDSRQRQDQ\RIKLVEDQNYLVLWV+RZHYHUWKHGLVSOD\ QHHGHGDQLQYHVWLJDWRUDQGDQH[SHUWWRHVWDEOLVKWKDWKHZDV
RIDZHDSRQDWKUHDWWRXVHDZHDSRQRUHYHQDYHUEDORU DW KRPH XVLQJ KLV FRPSXWHU GXULQJ VRPH RI WKH EDQN
QRQYHUEDOKLQWRIDZHDSRQLVQRWDQHFHVVDU\LQJUHGLHQWRI UREEHULHVDQGWRDVVLVWLQORFDWLQJDOLELZLWQHVVHV
LQWLPLGDWLRQXQGHU†D5RELQVRQ)GDW
VHH DOVR :DOGRQ  )G DW  m,W LV LPPDWHULDO WKDW
:DOGRQGLGQRWEUDQGLVKDZHDSRQl+LOO)GDW LQ VXFK VDYLQJV DQG ORDQ DVVRFLDWLRQ RU EXLOGLQJ RU SDUW WKHUHRI
m>'@HIHQGDQWjVDFWLRQVFDQULVHWRWKHOHYHORILQWLPLGDWLRQLI VR XVHG DQ\ IHORQ\ DIIHFWLQJ VXFK EDQN FUHGLW XQLRQ RU VXFK
KHFRQIURQWHGDEDQNHPSOR\HHGXULQJWKHFRPPLVVLRQRIWKH VDYLQJV DQG ORDQ DVVRFLDWLRQ DQG LQ YLRODWLRQ RI DQ\ VWDWXWH RI WKH
FULPHHYHQLIWKHGHIHQGDQWZDVXQDUPHGRUGLGQRWH[SOLFLWO\ 8QLWHG 6WDWHV RU DQ\ ODUFHQ\

WKUHDWHQDEDQNHPSOR\HHl8QLWHG6WDWHVY/XFDV)G 6KDOO EH ILQHG XQGHU WKLV WLWOH RU LPSULVRQHG QRW PRUH WKDQ
WK&LUµ>(@[SUHVVWKUHDWVRIERGLO\KDUP WZHQW\ \HDUV RU ERWK
WKUHDWHQLQJ ERG\ PRWLRQV RU WKH SK\VLFDO SRVVLELOLW\ RI
FRQFHDOHGZHDSRQ>V@jDUHQRWUHTXLUHGIRUDFRQYLFWLRQIRU  86& † D 7KLV SRUWLRQ RI WKH VWDWXWH DSSHDUV WR FULPLQDOL]H
EDQN UREEHU\ E\ LQWLPLGDWLRQl TXRWLQJ 8QLWHG 6WDWHV Y HQWHULQJ D EDQN ZLWK WKH LQWHQW WR FRPPLW D IHORQ\ LQFOXGLQJ ODUFHQ\

+RSNLQV)GWK&LU8QLWHG6WDWHV $OWKRXJK WKLV SDUDJUDSK RI † D ZDV QRW FKDUJHG LQ WKLV FDVH WKH
HYLGHQFH ZRXOG KDYH VXSSRUWHG WKH FRQYLFWLRQ XQGHU LW HYHQ LI *LOPRUH
Y+HQVRQ)GVW&LUm1HLWKHUWKH RQO\ LQWHQGHG WR FRPPLW D ODUFHQ\ 7KH SHQDOW\ IRU D FRQYLFWLRQ XQGHU
DFWXDORUWKUHDWHQHGGLVSOD\RIDZHDSRQQRUDQH[SOLFLWWKUHDW WKLV VHFRQG SDUDJUDSK RI † D LV WKH VDPH DV WKDW IRU EDQN UREEHU\ E\
RI IRUFH LV HVVHQWLDO WR HVWDEOLVK LQWLPLGDWLRQ XQGHU WKH IRUFH DQG YLROHQFH RU E\ LQWLPLGDWLRQ DV VHW IRUWK LQ WKH ILUVW SDUDJUDSK RI
VWDWXWHl8QLWHG6WDWHVY+LJGRQ)GWK † D DQG RI ZKLFK *LOPRUH ZDV FRQYLFWHG LQ WKLV FDVH
&LUm:HFRQFOXGHWKDWQHLWKHUWKHSODLQPHDQLQJRI 
WKHWHUPµLQWLPLGDWLRQjQRULWVGHULYDWLRQIURPDSUHGHFHVVRU  86& † $ SURYLGHV WKDW
VWDWXWH VXSSRUWV +LJGRQ
V DUJXPHQW WKDW D WDNLQJ µE\
H 6HUYLFHV RWKHU WKDQ FRXQVHO
LQWLPLGDWLRQjUHTXLUHVDQH[SUHVVYHUEDOWKUHDWRUDWKUHDWHQLQJ  8SRQ UHTXHVW&RXQVHO IRU D SHUVRQ ZKR LV ILQDQFLDOO\
GLVSOD\RIDZHDSRQl XQDEOH WR REWDLQ LQYHVWLJDWLYH H[SHUW RU RWKHU VHUYLFHV QHFHVVDU\
IRU DGHTXDWH UHSUHVHQWDWLRQ PD\ UHTXHVW WKHP LQ DQ H[ SDUWH
$FRPPRQWKUHDGLQDOORI*LOPRUHjVDFWLRQVLVWKHXVHRI DSSOLFDWLRQ 8SRQ ILQGLQJ DIWHU DSSURSULDWH LQTXLU\ LQ DQ H[
DGHPDQGQRWH7KHYDULRXVQRWHVFRQWDLQHGLPSHUDWLYHVVXFK SDUWH SURFHHGLQJ WKDW WKH VHUYLFHV DUH QHFHVVDU\ DQG WKDW WKH
DVm+DQGRYHUPRQH\lm+DQGRYHU\RXUPRQH\lm*LYHPH SHUVRQ LV ILQDQFLDOO\ XQDEOH WR REWDLQ WKHP WKH FRXUW RU WKH
8QLWHG 6WDWHV PDJLVWUDWH LI WKH VHUYLFHV DUH UHTXLUHG LQ
\RXUPRQH\lm*LYHWKHQRWHEDFNlDQGm%HTXLHWl:KHQ FRQQHFWLRQ ZLWK D PDWWHU RYHU ZKLFK KH KDV MXULVGLFWLRQ VKDOO
WKH QRWHV GLG QRW SURGXFH WKH GHVLUHG UHVXOWV *LOPRUH DXWKRUL]H FRXQVHO WR REWDLQ WKH VHUYLFHV
IROORZHG XS ZLWK FRPPDQGV VXFK DV m1R EDLWl m7KDWjV
 86& † $H
 8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH 

DIILUPLQJFRQYLFWLRQRIFRQVSLUDF\WRFRPPLWEDQNODUFHQ\ HQRXJKlm/HWjVJRlm*LYHPHWKDWlm+XUU\XSlm1RZl
ZKHUH GHIHQGDQW GLVJXLVHG DV D PDLQWHQDQFH ZRUNHU DQGm&RPHRQ\RXNQRZl
DWWHPSWHGWRUHPRYH$70IURPVKRSSLQJFHQWHUDQGRWKHU
WKHIWVIURPEDQNVQRWLQYROYLQJDGDQJHURIERGLO\KDUP6HH $UHYLHZRIWKHFDVHODZUHYHDOVWKDWPDNLQJDZULWWHQRU
HJ8QLWHG6WDWHVY3HWHUVRQ)GG&LU YHUEDOGHPDQGIRUPRQH\WRDWHOOHULVDFRPPRQPHDQVRI
H[DPLQLQJ VHQWHQFH RI GHIHQGDQW ZKRVH EDQN ODUFHQ\ VXFFHVVIXOO\UREELQJEDQNV'HPDQGVIRUPRQH\DPRXQWWR
FRQYLFWLRQ DURVH RXW RI SDVVLQJ D VHULHV RI EDG FKHFNV LQWLPLGDWLRQEHFDXVHWKH\FDUU\ZLWKWKHPDQLPSOLFLWWKUHDW
8QLWHG6WDWHVY&KDPEHUV1R:/ LIWKHPRQH\LVQRWSURGXFHGKDUPWRWKHWHOOHURURWKHUEDQN
DW

WK&LU0DUFKDIILUPLQJVHQWHQFHIRUEDQN HPSOR\HHPD\UHVXOW%DQNWHOOHUVZKRUHFHLYHGHPDQGQRWHV
ODUFHQ\FRQYLFWLRQWKDWDURVHRXWRIWKHIWRIDQDUPRUHGWUXFN DUHQRWLQDSRVLWLRQWRHYDOXDWHIXOO\WKHDFWXDOULVNWKH\IDFH
FRQWDLQLQJRYHUPLOOLRQIURPWKHDUPRUHGWUXFNIDFLOLW\ $VWKH5RELQVRQFRXUWVWDWHGm$QµRUGLQDU\SHUVRQjLQWKH
8QLWHG6WDWHVY7KRUSH)GG&LU WHOOHUjVSRVLWLRQFRXOGUHDVRQDEO\ZHWKLQNLQIHUDQLPSOLFLW
H[DPLQLQJVHQWHQFHIRUEDQNODUFHQ\FRQYLFWLRQZKHUHEDQN WKUHDWLQWKHGHPDQGµ*LYHPHDOO\RXUPRQH\jDFFRPSDQLHG
HPSOR\HH REWDLQHG EODQN FDVKLHUV FKHFN IRUJHG UHTXLUHG E\WKHSUHVHQWDWLRQRIDµEODFNSRXFKjl5RELQVRQ)G
VLJQDWXUH RI EDQN RIILFHU GHSRVLWHG WKH PRQH\ LQWR WZR DW6HYHUDORWKHUFLUFXLWVKDYHDOVRKHOGWKDWDGHPDQG
FXVWRPHUDFFRXQWVDQGWKHQZLWKGUHZDQGFRQYHUWHGIXQGVWR IRUPRQH\LQLWVHOILVVXIILFLHQWWRVXSSRUWDMXU\jVILQGLQJRI
KLVRZQXVH8QLWHG6WDWHVY7LQNHU1R LQWLPLGDWLRQ6HH8QLWHG6WDWHVY&ODUN)G
:/  DW

 WK &LU 0D\   DIILUPLQJ WK&LUILQGLQJLQWLPLGDWLRQZKHUHQRWHGHPDQGHG
FRQYLFWLRQDQGVHQWHQFHIRUEDQNODUFHQ\ZKHUHEDQNMDQLWRU mDOO RI \RXU WZHQWLHV ILIWLHV DQG KXQGUHG GROODU ELOOVl DQG
WRRNWKDWZDVOHIWRXWRIWKHYDXOWE\EDQNWHOOHU GHIHQGDQW VWDWHG WKDW mWKLV LV D KROGXSl+LOO  )G DW
 FKDUDFWHUL]LQJ DFWLRQV DV LQWLPLGDWLQJ ZKHUH
,W LV QRWHZRUWK\ WKDW KDG WKH EDQN ODUFHQ\ VWDWXWH EHHQ GHIHQGDQWVWDWHGm*LYHPHDOO\RXUPRQH\lDQGmGRQjWJLYH
DSSOLHG LQ WKH SUHVHQW FDVH *LOPRUH FRXOG QRW KDYH EHHQ PHDQ\RIWKHIXQQ\PRQH\lDQGWKUHZDSODVWLFEDJRQWKH
IRXQG JXLOW\ RI IHORQ\ EDQN ODUFHQ\ RQ WKUHH RI WKH HLJKW FRXQWHU ZLQGRZ 0F&DUW\  )G DW  DIILUPLQJ
FRXQWVEHFDXVHLQWKRVHLQVWDQFHVKHWRRNOHVVWKDQ FRQYLFWLRQRIUREEHU\E\LQWLPLGDWLRQZKHUHW\SHZULWWHQQRWH
,QDQ\HYHQWWKHEDQNODUFHQ\VWDWXWH86&†E VWDWHG m%H FDOP  7KLV LV D UREEHU\l 8QLWHG 6WDWHV Y
GRHVQRWILWWKHIDFWVRIWKLVFDVH)RUWKHUHDVRQVH[SUHVVHG +XPPDVWL)GWK&LUFRQFOXGLQJWKDW
DERYH WKH EDQN UREEHU\ VWDWXWH  86& † D ZDV WKUHDWZDVLPSOLFLWLQDQRWHWKDWUHDGm7KLVLVDUREEHU\JLYH
DSSURSULDWHO\ DSSOLHG KHUH DQG *LOPRUH ZDV SURSHUO\ PH\RXUPRQH\lDQGLQYHUEDOGHPDQGVIRUPRQH\8QLWHG
FRQYLFWHGRIYLRODWLQJWKLVVWDWXWH 6WDWHVY6PLWK)GWK&LUILQGLQJ
LQWLPLGDWLRQKDGEHHQHVWDEOLVKHGZKHUHGHIHQGDQWVWDWHGm,
ZDQW WR PDNH D ZLWKGUDZDO  , ZDQW  LQ ILIWLHV DQG
 KXQGUHGVlDQGZKHUHKHWZLFHGHPDQGHGOHDQHGLQWR
7KH VHFRQG SDUDJUDSK RI  86& † E GRHV GHILQH D EDQN WKH ZLQGRZ DQG VDLG mFRPH RQ FRPH RQ JLYH PH WKH
ODUFHQ\ PLVGHPHDQRU RIIHQVH IRU WKHIWV RI OHVV WKDQ  PRQH\l/XFDV)GDWILQGLQJLQWLPLGDWLRQZKHUH
 WKH YHUEDO DQG ZULWWHQ GHPDQG ZDV mSXW WKH PRQH\ LQ WKH
7KH VHFRQG SDUDJUDSK RI  86& † D SURYLGHV EDJl DQG GHIHQGDQW SODFHG WZR SODVWLF EDJV RQ FRXQWHU
:KRHYHU HQWHUV RU DWWHPSWV WR HQWHU DQ\ EDQN FUHGLW XQLRQ +HQVRQ  )G DW  ILQGLQJ LQWLPLGDWLRQ LQ ZULWWHQ
RU VDYLQJV DQG ORDQ DVVRFLDWLRQ RU DQ\ EXLOGLQJ XVHG LQ ZKROH RU GHPDQG QRWH WKDW UHDG mSXW ILIWLHV DQG WZHQWLHV  LQWR DQ
LQ SDUW DV D EDQN FUHGLW XQLRQ RU DV D VDYLQJV DQG ORDQ HQYHORSHQRZl+RSNLQV)GDWILQGLQJWKDWWKH
DVVRFLDWLRQ ZLWK LQWHQW WR FRPPLW LQ VXFK EDQN FUHGLW XQLRQ RU
 8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH 

WKUHDWV LPSOLFLW LQ ZULWWHQ GHPDQG RI m*LYH PH DOO \RXU WKDW *LOPRUH ZDV GHPDQGLQJ PRQH\ DQG KLV GHPDQGV
KXQGUHGVILIWLHVDQGWZHQWLHV7KLVLVDUREEHU\lDQGYHUEDO LQGXFHGWKHPWRDFWDFFRUGLQJO\
GHPDQG RI mJLYH PH ZKDW \RX JRWl SURYLGH VXIILFLHQW
HYLGHQFHRILQWLPLGDWLRQWRVXSSRUWMXU\jVYHUGLFW ,QVXPWDNLQJWKHHYLGHQFHLQWKHOLJKWPRVWIDYRUDEOHWR
WKHJRYHUQPHQWZHFRQFOXGHWKDWWKHSURRIRILQWLPLGDWLRQ
,WLVWKXVFOHDUDQGZHVRKROGWKDW*LOPRUHjVXQHTXLYRFDO ZDV VXIILFLHQW WR FRQYLFW *LOPRUH RI EDQN UREEHU\ XQGHU
ZULWWHQDQGYHUEDOGHPDQGVIRUPRQH\WREDQNHPSOR\HHVDUH 86&†DEH\RQGDUHDVRQDEOHGRXEW
DVXIILFLHQWEDVLVIRUDILQGLQJRILQWLPLGDWLRQXQGHU86&
† D  ,QWLPLGDWLRQ GRHV QRW UHTXLUH SURRI RI H[SUHVV *LOPRUHDUJXHVKRZHYHUWKDWLIKHLVJXLOW\RIDQ\WKLQJLW
WKUHDWV RI ERGLO\ KDUP WKUHDWHQLQJ ERG\ PRWLRQV RU WKH LVEDQNODUFHQ\DVGHILQHGLQ86&†E7KHILUVW
SK\VLFDOSRVVLELOLW\RIDFRQFHDOHGZHDSRQ7KH5RELQVRQ SDUDJUDSKRI†ESURYLGHV
KROGLQJZDVSUHGLFDWHGRQWKHGHWHUPLQDWLRQWKDWDGHPDQG
QRWHFDQFUHDWHLQWLPLGDWLRQ7KHGHFLVLRQGLGQRWUHVWRQWKH :KRHYHUWDNHVDQGFDUULHVDZD\ZLWKLQWHQWWRVWHDORU
DGGLWLRQDOILQGLQJWKDWWKHUREEHUZRUHDOHDWKHUFRDWmVRWKDW SXUORLQ DQ\ SURSHUW\ RU PRQH\ RU DQ\ RWKHU WKLQJ RI
DZHDSRQFRXOGSUHVXPDEO\KDYHEHHQFRQFHDOHGl5RELQVRQ YDOXH H[FHHGLQJ  EHORQJLQJ WR RU LQ WKH FDUH
)GDW7KDW*LOPRUHZRUHQRVXFKFRDWGRHVQRW FXVWRG\FRQWUROPDQDJHPHQWRUSRVVHVVLRQRIDQ\EDQN
LQDQ\SULQFLSOHGZD\GLVWLQJXLVKWKLVFDVHIURP5RELQVRQ FUHGLWXQLRQRUDQ\VDYLQJVDQGORDQDVVRFLDWLRQVKDOOEH
ILQHG XQGHU WKLV WLWOH RU LPSULVRQHG QRW PRUH WKDQ WHQ
3HUKDSV*LOPRUHjVREYLRXVGLVJXLVHVDQGKLVUHVXOWLQJRGG \HDUVRUERWK
DSSHDUDQFH ZHUH QRW LQ DQG RI WKHPVHOYHV LQWLPLGDWLQJ
+RZHYHUWKHGLVJXLVHVGLGLQGHHGDOHUWEDQNHPSOR\HHVWKDW 86&†E7KH6XSUHPH&RXUWKHOGLQ&DUWHUY
*LOPRUHZDVXSWRQRJRRG2QHQRUPDOO\GRHVQRWZHDUD 8QLWHG 6WDWHV  86   WKDW EDQN ODUFHQ\ 
IDNHJRDWHHWRFRQGXFWOHJLWLPDWHEXVLQHVVLQDEDQN7KHMXU\ 86& † E LV QRW D OHVVHU LQFOXGHG RIIHQVH RI EDQN
LQWKLVFDVHSHUPLVVLEO\FRXOGKDYHLQIHUUHGWKDW*LOPRUHjV UREEHU\  86& † D EHFDXVH † E FRQWDLQV
DSSHDUDQFHFRQWULEXWHGWRWKHWHOOHUVjDSSUHKHQVLRQDQGIHDU WKUHHHOHPHQWVQRWUHTXLUHGE\†DQDPHO\VSHFLILF
6HH 0F&DUW\  )G DW   /LNHZLVH WKRVH EDQN LQWHQWWRVWHDODVSRUWDWLRQDQGYDOXDWLRQH[FHHGLQJ
HPSOR\HHVZKRUHFRJQL]HG*LOPRUHIURPSUHYLRXVEDQNYLVLWV &DUWHU86DW
DOVRPD\KDYHVXIIHUHGVRPHDGGLWLRQDODSSUHKHQVLRQ
$UHYLHZRIWKHFDVHVRQ†EUHYHDOVWKDWWKLVVWDWXWH
,QVHYHUDORI*LOPRUHjVUREEHULHVEDQNWHOOHUVWHVWLILHGWKDW LVQRWXWLOL]HGLQFDVHVZKHUHLQGLYLGXDOVSUHVHQWGHPDQGVWR
WKH\ZHUHVFDUHGRUIHDUIXO:KLOHDVZHKDYHQRWHGDERYH EDQNWHOOHUV,QVWHDGWKHEDQNODUFHQ\VWDWXWHLVDSSOLFDEOHLQ
WKH WHVW IRU LQWLPLGDWLRQ LV HVVHQWLDOO\ DQ REMHFWLYH RQH FDVHV ZKHUH SHUVRQV VWHDO IURP D EDQNjV DXWRPDWHG WHOOHU
HYLGHQFH WKDW mWKH WHOOHU IHOW WKUHDWHQHG LV SUREDWLYH RI PDFKLQHm$70lVHH8QLWHG6WDWHVY0DUVKDOO)G
ZKHWKHUDUHDVRQDEOHSHUVRQZRXOGKDYHEHHQDIUDLGXQGHUWKH WK&LUDIILUPLQJEDQNODUFHQ\FRQYLFWLRQ
VDPHFLUFXPVWDQFHVl+LOO)GDWFLWLQJ6PLWK ZKHUHGHIHQGDQWDFRXULHUZKRVHUYLFHG$70VIRUWKHEDQN
)GDW+LJGRQ)GDW7KHMXU\ZDVHQWLWOHG XVHG NH\V DQG DFFHVV FRGHV WR WDNH  IURP $70
WR FRQVLGHU WKH WHOOHUVj IHDU LQ DVVHVVLQJ WKH LQWLPLGDWLQJ 8QLWHG6WDWHVY+DUELQ1R:/DW
QDWXUH RI *LOPRUHjV FRQGXFW  ,Q VHYHUDO RI WKH EDQNV

 WK &LU 0D\   DIILUPLQJ EDQN ODUFHQ\
*LOPRUHjVGHPDQGQRWHZDVQRWUHDGE\WKHWHOOHU+RZHYHU FRQYLFWLRQZKHUHIRUPHUHPSOR\HHRI$70VHUYLFHUXVHGD
WKLVIDFWGRHVQRWOHVVHQWKHLQWLPLGDWLRQ7KHWHOOHUVNQHZ FRS\RIWKH$70NH\WRWDNHRYHUIURP$708QLWHG
6WDWHV Y :LOOLV  )G   WK &LU