5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 5RHY%DNHU 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU BBBBBBBBBBBBBBBBBBBB )LOH 1DPH DS &21&855(1&( BBBBBBBBBBBBBBBBBBBB 81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 &/$<&LUFXLWsXGJHFRQFXUULQJ%HFDXVHP\YLHZRIWKH BBBBBBBBBBBBBBBBB LVVXH WKDW , ZRXOG RWKHUZLVH ILQG PHULWRULRXVnWKH MXU\ LQVWUXFWLRQLVVXHKDVEHHQUHMHFWHGE\RXUFLUFXLW,FRQFXULQ WKH PDMRULW\ RSLQLRQ LQ LWV HQWLUHW\ +RZHYHU , ZULWH VHSDUDWHO\WRUHLWHUDWHP\EHOLHIWKDWDMXU\LQVWUXFWLRQZKLFK s2+1 */(11 52( ; OHDYHVWKHMXU\ZLWKWKHLPSUHVVLRQWKDWLWFRXOGQRWFRQVLGHU 3HWLWLRQHU$SSHOODQW LPSRVLQJDOLIHVHQWHQFHZLWKRXWILUVWXQDQLPRXVO\UHMHFWLQJ D GHDWK VHQWHQFH LV XQFRQVWLWXWLRQDO 6HH +HQGHUVRQ Y 1R &ROOLQV)GWK&LU&OD\ Y sGLVVHQWLQJ$OWKRXJKP\YLHZRIWKLVLVVXHZDVUHMHFWHG ! E\WKHPDMRULW\LQ+HQGHUVRQDQGWKHUHIRUHFDQQRWVHUYHDV '(11,6 %$.(5 D EDVLV XSRQ ZKLFK WR JUDQW 3HWLWLRQHU UHOLHI LQ WKH LQVWDQW 5HVSRQGHQW$SSHOOHH FDVH,FRQWLQXHWREHRIWKHPLQGWKDWVXFKMXU\LQVWUXFWLRQV 1 YLRODWHWKH&RQVWLWXWLRQIRUDOORIWKHUHDVRQVVHWIRUWKE\P\ GLVVHQWLQ+HQGHUVRQ6HHLG:LWKUHVSHFWWR3HWLWLRQHUjV $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW RWKHUDVVLJQPHQWVRIHUURU,DJUHHZLWKWKHPDMRULW\RSLQLRQ IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV WKDWWKRVHLVVXHVODFNPHULW 1Rn(GPXQG$6DUJXVsU'LVWULFWsXGJH $UJXHGsDQXDU\ 'HFLGHGDQG)LOHG2FWREHU %HIRUH68+5+(,15,&+6,/(5DQG&/$<&LUFXLW sXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8(' 'DYLG / 'RXJKWHQ &OHYHODQG 2KLR IRU $SSHOODQW6WHSKHQ(0DKHU$77251(<*(1(5$/j6 2)),&( 2) 2+,2 &$3,7$/ &5,0(6 6(&7,21 &ROXPEXV 2KLR IRU $SSHOOHH 21 %5,() 'DYLG / 'RXJKWHQ &OHYHODQG 2KLR IRU $SSHOODQW 6WHSKHQ ( 0DKHU $77251(< *(1(5$/j6 2)),&( 2) 2+,2 5RHY%DNHU 1R 1R 5RHY%DNHU &$3,7$/ &5,0(6 6(&7,21 &ROXPEXV 2KLR IRU )GWK&LUZHKHOGWKDWUHOLHIPD\QRWEH $SSHOOHH JUDQWHG WR D KDEHDV SHWLWLRQHU IRU DOOHJHG GHILFLHQFLHV LQ D VWDWHjVSRVWFRQYLFWLRQSURFHGXUHVEHFDXVHVXFKFODLPVUHODWH 6,/(5 s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK WR D VWDWH FLYLO PDWWHU QRW WKH FXVWRG\ RI D GHIHQGDQW 68+5+(,15,&+sMRLQHG&/$<sSGHOLYHUHGD 7KHUHIRUH HYHQ LI 5RH FDQ GHPRQVWUDWH WKDW VRPH HUURU VHSDUDWHFRQFXUULQJRSLQLRQ RFFXUUHG GXULQJ WKH VWDWH SRVWFRQYLFWLRQ SURFHHGLQJV WKH FODLPLVQRWFRJQL]DEOHRQIHGHUDOKDEHDVUHYLHZ BBBBBBBBBBBBBBBBB IV. 23,1,21 BBBBBBBBBBBBBBBBB )RUWKHIRUHJRLQJUHDVRQVWKHGLVWULFWFRXUWGLGQRWHUULQ GLVPLVVLQJWKHKDEHDVSHWLWLRQSXUVXDQWWR 6,/(5&LUFXLWsXGJH3HWLWLRQHUs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jV FULPLQDO FRQYLFWLRQV LQ LWV GHFLVLRQ DIILUPLQJ WKRVH FRQYLFWLRQVDQGWKHVHQWHQFHRIGHDWKZKLFKWKHGLVWULFWFRXUW UHOLHGXSRQDVIROORZV 5RHY%DNHU 1R 1R 5RHY%DNHU IHORQ\ PXUGHUV VXEMHFW WR WKH GHDWK SHQDOW\ E\ H[FOXGLQJ 7KHDSSHOODQWsRKQ*5RHZDVFRQYLFWHGE\DMXU\RI WKRVH ZKR FRPPLW >PXUGHU LQ WKH FRXUVH RI DQ@ DUVRQ WKH NLGQDSSLQJ DJJUDYDWHG UREEHU\ DQG DJJUDYDWHG UREEHU\EXUJODU\RUHVFDSHXQOHVVWKH\DUHFKDUJHGZLWKD PXUGHURI'RQHWWH5&UDZIRUGDQGZDVVHQWHQFHGXSRQ GLIIHUHQWDJJUDYDWLQJFLUFXPVWDQFHl6FRWW)GDW WKHUHFRPPHQGDWLRQRIWKHMXU\WRGHDWKIRUDJJUDYDWHG FHUWGHQLHG86FLWDWLRQDQGTXRWDWLRQV PXUGHU 2Q WKH HYHQLQJ RI 2FWREHU 'RQHWWH RPLWWHG &UDZIRUGOHIWKHULQIDQWGDXJKWHUZLWKKHUSDUHQWVRQWKH ZHVW VLGH RI &ROXPEXV DQG ZHQW ZLWK D IULHQG 7RQL :KHWKHURQSRVWFRQYLFWLRQUHYLHZWKHVWDWHDSSHOODWH sHVWHU WR WKH $OURVD 9LOOD 7DYHUQ LQ WKH QRUWK HQG RI FRXUWSURYLGHGDIXOODQGIDLUUHYLHZRI5RHjVFODLPV &ROXPEXV&UDZIRUGKDGFDVKHGKHUSD\FKHFNWKDWGD\ RILQHIIHFWLYHDVVLVWDQFHGXULQJWKHSHQDOW\SKDVHRI DQGORFNHGPRVWRIKHUPRQH\LQKHUFDUEHIRUHHQWHULQJ KLVWULDO" WKHWDYHUQ7KHSDLUOHIWWKHWDYHUQDURXQGDPRQ 2FWREHU sHVWHU GURYH WKH FDU WR KHU KRPH ZKLOH 5RHDUJXHVWKDWLUUHJXODULWLHVLQWKHVWDWHDSSHOODWHFRXUWV &UDZIRUG VDW RQ WKH SDVVHQJHUjV VLGH ORRNLQJ IRU KHU GHSULYHGKLPRIDIXOODQGIDLUKHDULQJLQWKHDSSHOODWHUHYLHZ FLJDUHWWHV8SRQOHDYLQJsHVWHUDWKHUKRPHRQWKHZHVW RI KLV SRVWFRQYLFWLRQ FODLPV ILOHG SXUVXDQW WR 25& VLGHRI&ROXPEXV&UDZIRUGVWDWHGVKHZDVJRLQJWRSLFN 6SHFLILFDOO\WKHWULDOFRXUWGHQLHGKLVFODLPRI XSKHUGDXJKWHUDQGJRKRPHZKLFKZDVOHVVWKDQDPLOH LQHIIHFWLYHDVVLVWDQFHRIFRXQVHOEDVHGXSRQFRXQVHOjVIDLOXUH DZD\ 2Q KHU ZD\ DQG EHWZHHQ DQG DP WRFDOODSV\FKRORJLVWWRWKHVWDQGGXULQJWKHSHQDOW\SKDVH &UDZIRUGVWRSSHGDWDQHDUE\(OHYHQFRQYHQLHQFHVWRUH 5RHDSSHDOHGWKHGHQLDOWRWKH2KLR&RXUWRI$SSHDOV7KH RQ:HVW0RXQG6WUHHWWREX\DSDFNRIFLJDUHWWHV$Q FRXUWRIDSSHDOVKRZHYHUUHIXVHGWRFRQVLGHUWKHWUDQVFULSW DFTXDLQWDQFHRI&UDZIRUGODVWVDZKHUDV&UDZIRUGOHIW RIWKHWHVWLPRQ\DWWKHSRVWFRQYLFWLRQKHDULQJRQWKLVLVVXH WKH(OHYHQDQGFRQWLQXHGZHVWRQ0RXQG6WUHHW EHFDXVHo5RHFODLPVmGXHWRDFOHULFDOHUURUloWKDWWUDQVFULSW ZDVQHYHUPDGHSDUWRIWKHUHFRUG7KHFRXUWRIDSSHDOVDOVR $WDSSUR[LPDWHO\DP&UDZIRUGjVPRWKHUZKR GHQLHG5RHjVPRWLRQWRUHFRQVLGHULWVGHFLVLRQQRWWRUHYLHZ ZDVFRQFHUQHGWKDW'RQHWWHKDGQRWUHWXUQHGWRSLFNXS WKHKHDULQJWUDQVFULSW5RHDOOHJHVWKDWWKLVIDLOXUHWRFRQVLGHU KHU GDXJKWHU WHOHSKRQHG sHVWHU DQG 'RQHWWHjV WKHWUDQVFULSWFRQVWLWXWHGDYLRODWLRQRIGXHSURFHVVDQGHTXDO FRPPRQODZKXVEDQG6WHYH6WHLQHUWRILQGRXWZKHUH SURWHFWLRQ 'RQHWWHPLJKWEH:KHQVKHOHDUQHGWKDWQHLWKHUSDUW\ KDGVHHQQRUKHDUGIURP&UDZIRUG&UDZIRUGjVPRWKHU 7KHUHLVQRVXEVWDQWLYHPHULWWRWKLVFODLP7KHFRXUWRI EHJDQ ORRNLQJ IRU KHU /DWHU WKDW 6DWXUGD\ PRUQLQJ DSSHDOV GLG DGGUHVV WKH LVVXH 5RH UDLVHG RQ DSSHDO LW MXVW ZKHQ &UDZIRUGjV IDWKHU ZHQW ORRNLQJ IRU 'RQHWWH KH ZRXOGQRWUHYLHZWKHODWHILOHGWUDQVFULSWRIWKHKHDULQJEHORZ IRXQGKLVGDXJKWHUjVHPSW\FDUSDUNHGLQWKHSDUNLQJORW LQLWVFRQVLGHUDWLRQRIWKHLVVXH1HYHUWKHOHVVWKLVFRXUWQHHG RI6W$JQHV&KXUFKRQ:HVW0RXQG6WUHHW7KHFDUKDG QRWUHDFKWKHPHULWVRIWKLVLVVXH,Q.LUE\Y'XWWRQ EHHQUDQVDFNHGDQGWKHNH\VZHUHODWHUIRXQGLQDIORZHU EHGDWWKHFKXUFK'RQHWWHj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m7KHLQGLFWPHQWKHUHKDG FKDVH DQG ILUHG WKUHH VKRWV DW WKH VXEMHFW ZKR VXIILFLHQW LQIRUPDWLRQ WR SURYLGH SHWLWLRQHU ZLWK DGHTXDWH QHYHUWKHOHVVHVFDSHG7KHVXEMHFWjVFDUZDVLPSRXQGHG QRWLFH DQG WKH RSSRUWXQLW\ WR GHIHQG DQG SURWHFW KLPVHOI DQGODWHULGHQWLILHGDVEHLQJUHJLVWHUHGWRWKHDSSHOODQW DJDLQVWIXWXUHSURVHFXWLRQIRUWKHVDPHRIIHQVH$Q\RWKHU $WDSSUR[LPDWHO\SPDSSHOODQWjVPRWKHUsR\FH GHILFLHQFLHVLQWKHLQGLFWPHQWDOOHJHGE\SHWLWLRQHUDUHVROHO\ /XFDV WRRN DSSHOODQW WR WKH KRPH RI 0LFKDHO DQG PDWWHUVRIVWDWHODZDQGVRQRWFRJQL]DEOHLQDIHGHUDOKDEHDV 3DWULFLD 'DQLHO DQG DVNHG LI KH FRXOG VWD\ ZLWK WKHP SURFHHGLQJl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oLQIRUPDWLRQWKDWVKHKDGEHHQNLOOHGDQGWKDW KHNQHZZKRZDVLQYROYHGDQGZKHUHWKHERG\FRXOGEH 6FRWWDGGUHVVHG WKLVSUHFLVHFKDOOHQJHZKLFKLWUHMHFWHG IRXQG$SSHOODQWLQGLFDWHGKHZLVKHGWRH[FKDQJHWKLV KROGLQJ WKDW mWKH 2KLR /HJLVODWXUH QDUURZ>HG@ WKH FODVV RI LQIRUPDWLRQ WR GHDO ZLWK KLV FXUUHQW FKDUJHV %HDYHUFUHHN 'HWHFWLYH +DUU\ : $QWKRQ\ WKHQ DVNHG DSSHOODQW LI KH ZRXOG OLNH WR WDON DERXW LW ODWHU DQG DSSHOODQWDJUHHG7KHQH[WGD\DSSHOODQWFODLPHGWKDWD 5RH DOVR FLWHV $SSUHQGL Y 1HZ sHUVH\ 86 LQ VXSSRUW RI WKLV DUJXPHQW DQG DUJXHV WKDW VXEPLVVLRQ RI ERWK WKHRULHV WR SHUVRQQDPHGsHUU\3RZHOOKDGVKRWWKHZRPDQLQWKH WKH MXU\ FRQVWLWXWHV DQ LPSURSHU DPHQGPHQW WR WKH LQGLFWPHQW E\ WKH WULDO IDFH DQG GXPSHG KHU ERG\ EHKLQG D FHPHQW SODQW RQ MXGJH $SSUHQGL DGGUHVVHG VHQWHQFLQJ IDFWRUV WKDW PD\ LQFUHDVH D $OXP&UHHN'ULYHLQ&ROXPEXV$SSHOODQWGHVFULEHG VHQWHQFH LQ H[FHVV RI WKH VWDWXWRU\ PD[LPXP DQG LV QRW UHOHYDQW WR WKLV LVVXH 5RHY%DNHU 1R 1R 5RHY%DNHU WKHPD[LPXPDPRXQWWKHMXU\FRXOGUHFRPPHQG7KHUHIRUH &UDZIRUGjVFDUVWDWHGVKHZDVSRVVLEO\VKRWZLWKD WKH ZKROH DQDO\VLV RI WKH OLQH RI FDVHV FLWHG E\ 5RH PDJQXPKDQGJXQDQGJDYHGHWDLOVLQFOXGLQJDPDSRI XQGHUPLQHV 5RHj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sXG\DQG'DYLG9HUQHZHQWWRWKHFHPHQWSODQW VHQWHQFHGKLP1RWRQO\LVWKLVVSHFXODWLRQEXWWKHORJLFRI WRIDPLOLDUL]HWKHPVHOYHVZLWKWKHDUHDDQGWKHQGURYHWR WKDW DVVHUWLRQ LV TXHVWLRQDEOH DQG FHUWDLQO\ QRW RI WKH*UHHQH&RXQW\sDLOWRWDONZLWKDSSHOODQW$SSHOODQW FRQVWLWXWLRQDOPDJQLWXGH UHSHDWHG KLV HDUOLHU GHVFULSWLRQ RI WKH ERG\jV ORFDWLRQ DQG RI sHUU\ 3RZHOOjV LQYROYHPHQW DQG WHQWDWLYHO\ :KHWKHU DQ LQGLFWPHQW ZKLFK UHFLWHVDOWHUQDWLYH LGHQWLILHG SKRWRJUDSKV RI &UDZIRUG DQG KHU FDU 2Q WKHRULHV RI NLGQDSSLQJ PHHWV FRQVWLWXWLRQDO QRWLFH 1RYHPEHUWKHDUHDGHVFULEHGE\DSSHOODQWZDV UHTXLUHPHQWV" VHDUFKHGDQGWKHGHFRPSRVHGUHPDLQVRI&UDZIRUGZHUH GLVFRYHUHG7KHUHPDLQVZHUHLGHQWLILHGE\WKHFORWKLQJ 7KH FDSLWDO VSHFLILFDWLRQ RI 5RH SXUVXDQW WR 25& IRXQG ZLWK WKHP DQG E\ XVH RI &UDZIRUGjV GHQWDO $FKDUJHGWKDWKHZDVWKHSULQFLSDORIIHQGHU UHFRUGV$KROHFRQVLVWHQWZLWKDJXQVKRWZRXQGZDV RUFRPPLWWHGWKHDJJUDYDWHGPXUGHUZLWKSULRUFDOFXODWLRQ ORFDWHG LQ WKH ORZHU EDFN ULJKW SRUWLRQ RI WKH VNXOO DQGGHVLJQGXULQJWKHFRPPLVVLRQRIDNLGQDSLQJ+RZHYHU +RZHYHU VXEVHTXHQW LQYHVWLJDWLRQ RI sHUU\ 3RZHOO 25&GHILQHVNLGQDSSLQJLQDOWHUQDWLYHWKHRULHV LQFOXGLQJDSRO\JUDSKH[DPLQDWLRQH[FOXGHGKLPDVD 5RH REMHFWV WR WKH JRYHUQPHQWjV IDLOXUH WR VSHFLI\ LQ LWV VXVSHFW LQGLFWPHQWZKLFKVSHFLILFWKHRU\RINLGQDSLQJLWLQWHQGHGWR SURYH7KHDOWHUQDWLYHWKHRULHVFKDUJHGLQWKHLQGLFWPHQWERWK 2Q1RYHPEHU'HWHFWLYHsXG\PHWZLWKDQ DVWRWKHNLGQDSLQJFKDUJHDQGFDSLWDOVSHFLILFDWLRQDOOHJHG DQRQ\PRXVFDOOHUZKRZDVODWHULGHQWLILHGDV0LFKDHO WKDW 5RH m GLG E\ IRUFH WKHIW RU GHFHSWLRQ UHPRYH WKH 'DQLHO ZKR FRQYH\HG KLV LQIRUPDWLRQ FRQFHUQLQJ YLFWLPIURPWKHSODFHZKHUHVKHZDVIRXQGZLWKDSXUSRVHWR DSSHOODQWjVVWDWHPHQWDERXWDPXUGHUKHKDGFRPPLWWHG IDFLOLWDWHWKHFRPPLVVLRQRIDIHORQ\RUGLGE\IRUFHWKHIW LQ2FWREHU)XUWKHULQYHVWLJDWLRQWXUQHGXSDSSHOODQWjV RUGHFHSWLRQNQRZLQJO\RUXQGHUFLUFXPVWDQFHVZKLFKFUHDWHG ZHDSRQ D 5XJHU 6HFXULW\ 6L[ PDJQXP UHYROYHU VXEVWDQWLDOULVNRIVHULRXVSK\VLFDOKDUPWRYLFWLPUHPRYHWKH 7KLVZHDSRQZDVWUDFHGEDFNWRDEXUJODU\RI&DVWQHUjV YLFWLPIURPWKHSODFHZKHUHVKHZDVIRXQGl7KHWULDOFRXUW JXQVKRSLQ.LUNHUVYLOOH2KLRRQ6HSWHPEHU VXEPLWWHG ERWK WKHRULHV WR WKH MXU\ 5RH DUJXHV WKDW WKH $SSHOODQWKDGFRPPLWWHGWZREUHDNLQVRI&DVWQHUjVLQ IDLOXUHRIWKHWULDOFRXUWWRIRUFHWKHJRYHUQPHQWWR HOHFWD 0DUFK KDG VHUYHG MDLO WLPH WKHUHRQ DQG ZDV VSHFLILF WKHRU\ GHQLHG KLP SURSHU QRWLFH RI WKH FKDUJHV VXVSHFWHGRIKDYLQJFRPPLWWHGWKH6HSWHPEHUEUHDNLQ DVZHOO2WKHUZHDSRQVVWROHQIURP&DVWQHUjVZHUHODWHU UHFRYHUHGIURPWKHDSSHOODQWjVSDUHQWVjKRPH%DOOLVWLFV HYLGHQFH LQGLFDWHG WKDW D FDOLEHU EXOOHW IUDJPHQW 5RHY%DNHU 1R 1R 5RHY%DNHU UHFRYHUHG IURP &UDZIRUGjV VNXOO KDG EHHQ ILUHG IURP KDYH EHHQ WROG RI WKH GHIHQGDQWjV SDUROH LQHOLJLELOLW\ DSSHOODQWjVUHYROYHU 7KHUHDUHWKUHHLPSRUWDQWGLIIHUHQFHVEHWZHHQWKDWFDVH DQG WKLV RQH KRZHYHU )LUVW RI DOO WKH GHIHQGDQW LQ $SSHOODQWZDVLQGLFWHGRQ'HFHPEHUIRUWZR 6LPPRQV LI FRQYLFWHG ZDV GHILQLWHO\ JRLQJ WR EH FRXQWVRIDJJUDYDWHGPXUGHUZLWKWZRVSHFLILFDWLRQVIRU LQHOLJLEOH IRU SDUROH 6LPPRQV 86 DW IHORQ\PXUGHUNLGQDSSLQJDQGDJJUDYDWHGUREEHU\5& 6&W6HFRQGWKHSURVHFXWLRQjVDSSHDOWRWKHMXU\ % $ RQH FRXQW RI DJJUDYDWHG IRU D GHDWK VHQWHQFH ZDV H[SOLFLWO\ EDVHG RQ WKH UREEHU\ ZLWK D ILUHDUP VSHFLILFDWLRQ 5& GHIHQGDQWjVIXWXUHGDQJHURXVQHVVZLWKWKHLPSOLFDWLRQ DQG WZR FRXQWV RI NLGQDSSLQJ ZLWK ILUHDUP EHLQJWKDWRQO\GHDWKZRXOGSURWHFWWKHSXEOLFIRUVXUH VSHFLILFDWLRQV5&7ULDOEHJDQRQ ,GDW6&W)LQDOO\WKHGHIHQGDQWLQWKDW 1RYHPEHUDQGRQ'HFHPEHUWKHMXU\ FDVHVSHFLILFDOO\UHTXHVWHGWKHLQVWUXFWLRQDWWULDO,ELG IRXQGDSSHOODQWJXLOW\RQDOOFRXQWVDQGVSHFLILFDWLRQV 6LPPRQVWKHUHIRUHGRHVQRWDSSO\WRWKLVFDVH $VHQWHQFLQJKHDULQJZDVKHOGSXUVXDQWWR5& DQG DIWHU WKUHH DQG RQHKDOI GD\V RI WHVWLPRQ\ DQG ,GDW5RHjVDUJXPHQWLVPHUHO\DYDULDWLRQRIWKH GHOLEHUDWLRQVWKHMXU\UHFRPPHQGHGWKHLPSRVLWLRQRI DUJXPHQWLQ&RH7KXVXQGHU7HDJXHWKLVQHZUXOHZRXOG WKHGHDWKSHQDOW\)ROORZLQJLWVLQGHSHQGHQWUHYLHZWKH QRWEHDYDLODEOHWR5RH WULDO FRXUW DFFHSWHG WKH MXU\jV UHFRPPHQGDWLRQ DQG PHUJLQJ FRXQWV RQH DQG WZR VHQWHQFHG DSSHOODQW WR 5RHVHHNVWRDYRLGWKHDSSOLFDWLRQRI7HDJXHE\DUJXLQJ GHDWKIRUDJJUDYDWHGPXUGHU,QDGGLWLRQPHUJLQJWKH WKDWKHUHOLHVRQ+LWFKFRFNY'XJJHU86 WZR NLGQDSSLQJ FRXQWV WKH WULDO FRXUW VHQWHQFHG UDWKHUWKDQ6LPPRQVDQGLWVSURJHQ\o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jV GHFLVLRQ DQG WKH SULRUWRWKHFDSLWDOSKDVHVRWKDWWKHMXU\FRXOGNQRZWKHH[DFW 8QLWHG6WDWHV6XSUHPH&RXUWjVGHQLDORIFHUWLRUDUL5RHILOHG DPRXQW RI \HDUV EHIRUH D GHIHQGDQW ZRXOG EH HOLJLEOH IRU DPRWLRQIRUSRVWFRQYLFWLRQUHOLHILQWKHWULDOFRXUWSXUVXDQW SDUROH7KHUHLVQRVXSSRUWIRUWKLVDUJXPHQWLQ+LWFKFRFN WR25&RQ2FWREHU7KHWULDOFRXUWKHOG 0RUHRYHUWKHMXU\NQHZWKDW5RHZRXOGQRWEHHOLJLEOHIRU DKHDULQJDQGVXEVHTXHQWO\GHQLHG5RHjVSHWLWLRQIRUSRVW SDUROHIRUDWOHDVWWKHDPRXQWRIWLPHZKLFKWKH\VSHFLILHG FRQYLFWLRQUHOLHI 5RHDSSHDOHGEXWLQWKH)UDQNOLQ HLWKHUWZHQW\RUWKLUW\\HDUV:KHWKHUWKHDFWXDOWLPHXQWLO &RXQW\&RXUWRI$SSHDOVDIILUPHGWKHWULDOFRXUWjVMXGJPHQW SDUROHHOLJLELOLW\LVWKLUW\WZRRUIRUW\WZR\HDUVFDQQRWEH GLVPLVVLQJ KLV SRVWFRQYLFWLRQ FODLP 7KH 2KLR 6XSUHPH VDLGWREHFRQVWLWXWLRQDOO\VLJQLILFDQWWRDMXU\jVGHWHUPLQDWLRQ &RXUWGHQLHG5RHj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s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jVGLVSRVLWLRQ WKHPXUGHUZRXOGKDYHEHHQHIIHFWLYHO\DVHQWHQFHRI RIDSHWLWLRQIRUZULWRIKDEHDVFRUSXVZHUHYLHZWKHGLVWULFW OLIHZLWKRXWSDUROH.QRZLQJWKLV&RHDUJXHVWKHMXU\ FRXUWjV IDFWXDO ILQGLQJV RQO\ IRU FOHDU HUURU 0F4XHHQ Y PLJKW KDYH VHHQ D OLIH VHQWHQFH DV D PRUH VHULRXV 6FURJJ\)GWK&LU)XUWKHUIHGHUDO SXQLVKPHQWDQGWKHUHIRUHVXIILFLHQWLQOLHX RIDGHDWK FRXUWVPXVWGHIHUWRVWDWHFRXUWIDFWXDOILQGLQJVDFFRUGLQJWR VHQWHQFH WKHP D SUHVXPSWLRQ RI FRUUHFWQHVV WKDW WKH SHWLWLRQHU PD\ UHEXWRQO\ZLWKFOHDUDQGFRQYLQFLQJHYLGHQFH,G+RZHYHU 7KHVROHJURXQGLQJRIWKHGLVWULFWFRXUWjVUHMHFWLRQRI m>W@KHSUHVXPSWLRQRQO\DSSOLHVWREDVLFSULPDU\IDFWVDQG WKLVFODLPZDVWKDWWKHFODLPZDVEDVHGRQDmQHZUXOHl QRW WR PL[HG TXHVWLRQV RI ODZ DQG IDFWl ZKLFK UHFHLYHGH XQGHU7HDJXHY/DQH866&W QRYRUHYLHZ,G / (GG :H DJUHH WKDW 7HDJXH ZRXOG IRUHFORVHWKLVFODLPLIWKHSURFHGXUDOEDUGLGQRWVLQFH ,Q VHWWLQJ IRUWK WKLV VWDQGDUG RI UHYLHZ WKH HIIHFW RI WKH &RHUHOLHVRQDFDVH6LPPRQVY6RXWK&DUROLQD DPHQGPHQWV WR 86& FRQWDLQHG LQ WKH 866&W/(GGWKDW $QWLWHUURULVP DQG (IIHFWLYH 'HDWK 3HQDOW\ $FW RI ZDVGHFLGHGZHOODIWHU&RHjVFRQYLFWLRQEHFDPHILQDOLQ $('3$3XE/6WDWKDVEHHQ DQG ZDV QRW VXIILFLHQWO\ GLFWDWHG E\ SULRU LJQRUHG$OWKRXJK$('3$EHFDPHHIIHFWLYHRQ$SULO SUHFHGHQW6HH2 'HOOY1HWKHUODQG86 DQG LW PDQGDWHV VLJQLILFDQW FKDQJHV WR WKH IHGHUDO 6&W/(GGKROGLQJ FRXUWVjWUHDWPHQWRIERWKIDFWXDODQGOHJDOLVVXHVLQWKHKDEHDV WKDW6LPPRQVDQQRXQFHGDQHZUXOHDQGUHWURVSHFWLYH VHWWLQJ WKH6XSUHPH&RXUWjVGHFLVLRQLQ/LQGKY0XUSK\ DSSOLFDWLRQRIWKHUXOHZDVEDUUHGE\7HDJXH 86LQVWUXFWVWKDWWKRVHFKDQJHVGRQRWDSSO\ WR WKLV FDVH RU WR DQ\ FDVH SHQGLQJ DW WKH WLPH RI WKH &RHjV FODLP IDLOV DQ\ZD\ 7KHUH LV QR UHDVRQ WR $('3$jVHQDFWPHQWLQVWHDGWKRVHFKDQJHVmJHQHUDOO\DSSO\ DVVXPHRUFRQFOXGHWKDWWKHVHQWHQFLQJMXGJHLQ&RHjV RQO\WRFDVHVILOHGDIWHUWKH$FWEHFDPHHIIHFWLYHl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jV Y:LWKURZ)GWK&LUFLWLQJ/RJDQY FRQVWLWXWLRQDOULJKWV" 0DUVKDOO)GWK&LU5RHKDVQRW PHWWKLVEXUGHQE\GHPRQVWUDWLQJWKDWWKHDGPLVVLRQRIWKLV 5RH REMHFWV WR WKH WULDO FRXUWj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j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m>Z@LOO WKH VHQWHQFHV UXQ RIIHQGHUZDVIRXQGJXLOW\RIFRPPLWWLQJRXWZHLJKWKH FRQVHFXWLYHO\ RU FRQFXUUHQWO\"l :LWK DJUHHPHQW RI ERWK PLWLJDWLQJIDFWRUVWKHWULDOMXU\VKDOOUHFRPPHQGWRWKH SDUWLHVWKHWULDOFRXUWUHVSRQGHGWKDWm>W@KHVHQWHQFHVRQWKH FRXUW WKDW WKH VHQWHQFH RI GHDWK EH LPSRVHG RQ WKH PXUGHU FKDUJHV ZLOO PHUJH DQG WKHUH ZLOO EH RQO\ RQH RIIHQGHU $EVHQW VXFK D ILQGLQJ WKH MXU\ VKDOO VHQWHQFH RQ WKRVH FKDUJHV 7KH VHQWHQFH RQ WKH ILUHDUPV UHFRPPHQG WKDW WKH RIIHQGHU EH VHQWHQFHG WR OLIH VSHFLILFDWLRQE\ODZPXVWEHUXQFRQVHFXWLYHWRWKHRWKHU LPSULVRQPHQWZLWKSDUROHHOLJLELOLW\DIWHUVHUYLQJWZHQW\ VHQWHQFHV7KHVHQWHQFHVRQWKHDJJUDYDWHGUREEHU\DQGWKH IXOO\HDUVRILPSULVRQPHQWRUWROLIHLPSULVRQPHQWZLWK NLGQDSSLQJZLOOEHGHWHUPLQHGE\WKH&RXUWDIWHU\RXUYHUGLFW SDUROH HOLJLELOLW\ DIWHU VHUYLQJ WKLUW\ IXOO \HDUV RI LVUHQGHUHGl LPSULVRQPHQW 5RHY%DNHU 1R 1R 5RHY%DNHU YHUGLFWPD\EHPD\EHSXEOLF6R,WKLQNLWjVVRPHWKLQJ 25&'5RHj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jWDNLQJWKHH[WUDRUGLQDU\ ,W LV FOHDU IURP WKLV VWDWXWRU\ SURYLVLRQ WKDW D MXU\j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o QRW MXVW IURP D XQDQLPRXV GHWHUPLQDWLRQ E\ WKH MXURUV WKDW LW ZDV WKH 2QWKLVLVVXHWKH6XSUHPH&RXUWRI2KLRKHOG DSSURSULDWHVHQWHQFHo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jVmOHJDOSDSHUVlDVWKHRQO\VXFKSDSHUVKHVDZ LPSUHVVLRQRQWKHMXU\WKDWLWPXVWXQDQLPRXVO\UHMHFWGHDWK ZHUH WKH MXU\ OLVWV (YLG 5 $SSHOODQW KDV QRW UDWKHU WKDQ D VLQJOH MXURUjV EHLQJ FDSDEOH RI SUHYHQWLQJ D GHPRQVWUDWHGWKDWWKHSUREDWLYHYDOXHRIVXFKHYLGHQFH GHDWKVHQWHQFHE\FUHDWLQJDGHDGORFN ZDV VXEVWDQWLDOO\ RXWZHLJKHG E\ WKH GDQJHU RI XQIDLU SUHMXGLFH(YLG5$ 7KH2KLR6XSUHPH&RXUWKDVLVVXHGVHYHUDOGHFLVLRQVRQ WKLVSRLQW,Q6WDWHYsHQNLQV1(G2KLR 5RH1(GDW$VWKH2KLR6XSUHPH&RXUWKHOG LW KHOG WKDW D MXU\jV UHFRPPHQGDWLRQ RI OLIH LQOLJKWRI5RHjVVWUDWHJ\RIXQGHUPLQLQJ%R\GjVFUHGLELOLW\ LPSULVRQPHQWXQGHUWKDWVHFWLRQPXVWEHXQDQLPRXV,Q6WDWH E\LQVLQXDWLQJWKDWKHJDLQHGKLVLQIRUPDWLRQIURPUHDGLQJ Y6SULQJHU1(G2KLRWKHFRXUWKHOG 5RHjVSDSHUVLWZDVFULWLFDOO\UHOHYDQWZKDWLQIRUPDWLRQWKRVH WKDW ZKHQ D MXU\ EHFRPHV KRSHOHVVO\ GHDGORFNHG DV WR SDSHUVFRQWDLQHGs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mKDUPRQL]HlWKHsHQNLQVDQG6SULQJHUKROGLQJVE\UHTXLULQJ 8QLWHG 6WDWHV Y %HVV )G WK &LU DQ LQVWUXFWLRQ WR EH JLYHQ WKHQFHIRUWK WKDW D VROLWDU\ MXURU FLWDWLRQVRPLWWHG7KLVFDVHHDVLO\IDOOVLQWRWKDWFDWHJRU\ FRXOGSUHYHQWWKHLPSRVLWLRQRIWKHGHDWKSHQDOW\ :KHWKHU 5RHjV FRQVWLWXWLRQDO ULJKW WR DQLPSDUWLDO 1HYHUWKHOHVVmWKHIDFWWKDW>DQ@LQVWUXFWLRQZDVDOOHJHGO\ MXU\ZDVYLRODWHGE\WKHDGPLVVLRQRIWHVWLPRQ\WKDW LQFRUUHFW XQGHU VWDWH ODZ LV QRW D EDVLV IRU KDEHDV UHOLHIl KHSRVVHVVHGDOLVWRIDOOWKHSRWHQWLDOMXURUVjQDPHV (VWHOOHY0F*XLUH867KHLVVXHRQ DQGDGGUHVVHV" FROODWHUDOUHYLHZLQWKHIHGHUDOFRXUWVLVZKHWKHUDGHIHQGDQWjV IHGHUDOFRQVWLWXWLRQDOULJKWVZHUHYLRODWHGE\WKHLQVWUXFWLRQ 9LQFHQW%R\G5RHjVFHOOPDWHWHVWLILHGDJDLQVWKLPDWWULDO :HDGGUHVVHGWKLVVDPHLVVXHLQ&RHY%HOO)G UHJDUGLQJFHUWDLQLQFULPLQDWLQJDGPLVVLRQVPDGHE\5RHWR WK &LU DQG KHOG WKDW VXFK D XQDQLPLW\ KLP $GPLWWHGO\ WKH GHIHQVH DWWHPSWHG WR GLVFUHGLW KLV LQVWUXFWLRQDVWRDVHQWHQFLQJUHFRPPHQGDWLRQRIGHDWKGLG WHVWLPRQ\RQFURVVH[DPLQDWLRQZLWKTXHVWLRQVGHVLJQHGWR QRWYLRODWHWKH&RQVWLWXWLRQ$JDLQLQ6FRWWY0LWFKHOO VKRZWKDWKHNQHZGHWDLOVRIWKHFDVHE\UHDGLQJ5RHjVOHJDO )GWK&LUZHREVHUYHGWKHVDPHsXVWDV SDSHUVLQWKHFHOO2QUHGLUHFWWKHSURVHFXWLRQDVNHG%R\G LQ &RH DQG 6FRWW WKH LQVWUXFWLRQV DW LVVXH GR QRW UHTXLUH ZKDWKHUHPHPEHUHGDERXWWKHSDSHUV%R\GGHQLHGVHHLQJ XQDQLPLW\ DV WR D VSHFLILF PLWLJDWLQJ IDFWRU ZKLFK ZRXOG WKHP H[FHSW FXUVRULO\ DQG VDLG WKDW WKH RQO\ WKLQJ KH YLRODWH0LOOVY0DU\ODQG86EXWRQO\ UHPHPEHUHGZDVDOLVWRIDOOWKHMXURUVjQDPHVDQGDGGUHVVHV DV WR WKH RYHUDOO ZHLJKLQJ SURFHVV ZKLFK LV SHUPLVVLEOH 5RH REMHFWHG DQG WKH WULDO FRXUW RYHUUXOHG WKDW REMHFWLRQ )XUWKHU DV ZH REVHUYHG LQ6FRWW ERWK WKLV &LUFXLW DQG WKH KDYLQJDOUHDG\FRQGXFWHGDVLGHEDUDVWRWKLVJHQHUDOLVVXH 6XSUHPH &RXUW m>KDYH@ FKDVWLVHG VXFK LQVWUXFWLRQV DV /DWHUFRXQVHOPRYHGIRUDPLVWULDORQWKDWEDVLVZKLFKWKH HQFRXUDJLQJ GHDGORFN DQG XQGHUPLQLQJ WKH VWURQJ WULDOFRXUWGHQLHG$IWHUWKHOXQFKUHFHVVWKHMXURUVH[SUHVVHG JRYHUQPHQWDO LQWHUHVW LQ XQDQLPRXV YHUGLFWVl 6FRWW WKHLUFRQFHUQWRWKHEDLOLIIDERXW5RHjVSRVVHVVLQJDOLVWRI )GDWFLWLQJs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j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l,QFRQVLGHULQJWKLVDVVLJQPHQWRI GLG QRW KDYH WKH EHQHILW RI %URRNV WKDW FDVH FOHDUO\ HUURUWKH6XSUHPH&RXUWRI2KLRKHOG HVWDEOLVKHVWKDWWKHWULDOFRXUWPLVDSSOLHG2KLR5HYLVHG &RGH ' E\ UHTXLULQJ WKH MXU\ WR 7KH SURVHFXWRU FRPPHQWHG RQ VWDWXWRU\ PLWLJDWLQJ XQDQLPRXVO\UHMHFWWKHGHDWKSHQDOW\EHIRUHFRQVLGHULQJ IDFWRUVRQZKLFKDSSHOODQWKDGQRWSUHVHQWHGHYLGHQFHDW DOLIHVHQWHQFH WKHKHDULQJ,Q6WDWHY'H3HZ2KLR6WG 1(G ZH VWDWHG WKDW mVXFK ,GDW1HYHUWKHOHVV0DSHVXOWLPDWHO\KHOGm>E@XWDOO FRPPHQWLVDSSURSULDWHRQO\ZLWKUHJDUGWRWKRVHIDFWRUV WKDW EHLQJ VR WKH WULDO FRXUWjV LQVWUXFWLRQDO HUURUV GR QRW DFWXDOO\RIIHUHGLQPLWLJDWLRQE\WKHGHIHQGDQWl+HUH UHTXLUHJUDQWLQJ0DSHVjVKDEHDVSHWLWLRQEHFDXVHQHLWKHURI KRZHYHUDVLQ:LOOLDPVVXSUD2KLR6WGDW WKHVHODVWWZRLQVWUXFWLRQDOLVVXHVZDVUDLVHGRQDSSHDO7KXV 2%5DW1(GDWDSSHOODQWIDLOHGWRWLPHO\ 0DSHVjVSURFHGXUDOGHIDXOWLVDQDGHTXDWHDQGLQGHSHQGHQW REMHFWWRVXFKFRPPHQWEHORZDQGLQDQ\HYHQWWKHWULDO JURXQGIRUDIILUPLQJKLVVHQWHQFHl,GDW$FFRUGLQJO\ FRXUWjV LQVWUXFWLRQV WR WKH MXU\ UHJDUGLQJ ERWK WKH6FRWWFRXUWLQDGGUHVVLQJWKHVDPHLVVXHIRXQGWKH0DSHV QRQVWDWXWRU\ DQG VWDWXWRU\ PLWLJDWLQJ IDFWV ZHUH ODQJXDJH WR EH GLFWD ,URQLFDOO\ WKH 6FRWW FRXUW OLNHZLVH VXIILFLHQW WR FRUUHFW DQ\ HUURU RQ WKH SDUW RI WKH IRXQG WKH LVVXH SURFHGXUDOO\ GHIDXOWHG DQG DGGUHVVHG WKH SURVHFXWLRQ$OWKRXJKWKHSURVHFXWLRQjVDUJXPHQWZDV PHULWVLQWKHDOWHUQDWLYHRQO\mRXWRIDQDEXQGDQFHRIFDXWLRQ LPSURSHULWGLGQRWDPRXQWWRDFRQYHUVLRQRIPLWLJDWLQJ DQGLQRUGHUWRFODULI\RXUSUHFHGHQWVJRYHUQLQJVHQWHQFLQJ IDFWRUVLQWRSURKLELWHGQRQVWDWXWRU\DJJUDYDWLQJIDFWRUV SKDVHLQVWUXFWLRQVRQMXU\XQDQLPLW\l6FRWW)GDW 'HIHQGDQW@ XVXUSV WKH FRPSDVVLRQ WKDW LV MXVWO\ KLV FLUFXPVWDQFHVWRGHWHUPLQHZKHWKHUWKHPLVFRQGXFWGHQLHG YLFWLPjV GXH +H ZLOO VWHDO KLV YLFWLPjV PRUDO 5RHDIDLUWULDO6XPPLWY%RUGHQNLUFKHU)G FRQVWLWXHQF\ DORQJ ZLWK KHU OLIH $QG QRZ WK &LU :H KDYH LGHQWLILHG WKH IDFWRUV WR EH >'HIHQGDQW@DVNV\RXODGLHVDQGJHQWOHPHQZLWKRXWD FRQVLGHUHGLQZHLJKLQJWKHH[WHQWRISURVHFXWRULDOPLVFRQGXFW ZRUGRIUHPRUVHZLWKRQO\WHDUVIRUKLPVHOIZLWKRXWD LQ KDEHDV FDVHV :H FRQVLGHU WKH GHJUHH WR ZKLFK WKH WHDUIRUKLVYLFWLP1RWDZRUGo,jPVRUU\+HZDQWV UHPDUNVFRPSODLQHGRIKDYHDWHQGHQF\WRPLVOHDGWKHMXU\ \RX WR JLYH KLP ZKDW KH ZRXOG KDYH JRWWHQ LI >WKH DQGWRSUHMXGLFHWKHDFFXVHGZKHWKHUWKH\DUHLVRODWHGRU YLFWLP@KDGEHHQDOORZHGWROLYHoMDLO H[WHQVLYHZKHWKHUWKH\ZHUHGHOLEHUDWHO\RUDFFLGHQWDOO\ SODFHGEHIRUHWKHMXU\DQGWKHVWUHQJWKRIWKHFRPSHWHQW 5RH DVVHUWV WKDW WKLV DUJXPHQW IURP WKH SURVHFXWRU SURRIWRHVWDEOLVKWKHJXLOWRIWKHDFFXVHG$QJHOY2YHUEXUJ mHVVHQWLDOO\DVNHGWKHMXU\WRDJUHHWKDWWKHHQWLUHFRQFHSWRI )G WK &LU FLWLQJ 8QLWHG 6WDWHV Y DPLWLJDWLRQKHDULQJZDVUHSXJQDQWDQGFRQVWLWXWHGDQDWWHPSW /HRQ )G WK &LU (YHQ LI WKH WRVWHDORUXVXUSWKHYLFWLPjVµPRUDOFRQVWLWXHQF\DORQJZLWK SURVHFXWRUjV FRPPHQWV FRQYH\HG WKH PHDQLQJ WKDW 5RH KHUOLIHj7KLVIRUPRIDUJXPHQWXQGHUPLQHGWKHLQWHJULW\RI DOOHJHV WKH\ FRQYH\HG LW LV FOHDU WKDW VXFK LVRODWHG DQG WKHHQWLUHSURFHVVDQG>RIIHQGHG@WKHFRQVWLWXWLRQDOFRQFHSW LQGLUHFWFRPPHQWVGLGQRWUHQGHU5RHjVWULDOIXQGDPHQWDOO\ RI D µIDLU WULDOjl ,W LV QRW FOHDU WKDW WKHVH FRPPHQWV XQIDLU GHQLJUDWHGWKHPLWLJDWLRQSURFHVVEXWUDWKHUDVWKHGLVWULFW FRXUW KHOG m>W@KH SURVHFXWRU DUJXHG LQ HVVHQFH WKDW WKH 6HFRQGZLWKUHJDUGWRWKHSURVHFXWRUjVFRPPHQWVDVWRWKH YLFWLPjVOLIHKDGHQGHGDQGWKDWRQO\>5RH@jVSOLJKWFRXOGEH DEVHQFH RI HYLGHQFH DV WR FHUWDLQ PLWLJDWLRQ IDFWRUV 5RH SUHVHQWHG LQ SHUVRQ WR WKH MXU\ 7R WKLV H[WHQW WKH SRLQWV WR WKH IROORZLQJ VWDWHPHQW m>L@Q VRPH FULPHV WKH SURVHFXWRUjVFRPPHQWVFRQFHUQLQJWKHYLFWLPXQGHUVWDQGDEO\ YLFWLPKDVVRPHWKLQJWRGRZLWKZKDWKDSSHQHGWKHYLFWLPLV GUDPDWLF DQG HPRWLRQDO LQ WKH FDVH RI D FULPH LQYROYLQJ D VRPHKRZ SDUWLDOO\ WR EODPH :KDW PDNHV WKLV FULPH VR YLROHQWNLOOLQJZHUHZHOOZLWKLQWKHFRQVWLWXWLRQDOSDUDPHWHUV UHSXOVLYHZKDWDEVROXWHO\WHVWV\RXUIDLWKLQWKHPHUF\RI*RG RIDIDLUWULDOl LV >WKH@ DZHVRPH UDQGRPQHVV RI WKH FULPHl DV ZHOO DV m>V@RPH FULPHV \RX ILQG WKDW WKH SHUVRQ ZKR FRPPLWV WKH