Transcript of %XUHDX RI &RQVXPHU )LQDQFLDO · 2020. 12. 9. · lqvwuxphqw ru lqvwuxphqwdolw\ ri lqwhuvwdwh...
PDF File81,7(' 67$7(6',675,&7&2857
:(67(51',675,&72)0,66285,
%XUHDXRI&RQVXPHU)LQDQFLDO 3URWHFWLRQ
3ODLQWLII
Y
7KH%XUHDXRI&RQVXPHU)LQDQFLDO3URWHFWLRQEULQJVWKLVDFWLRQDJDLQVW
%RXQFH%DFN,QF DQGDOOHJHVDVIROORZV
,1752'8&7,21
7KH%XUHDXEULQJVWKLV DFWLRQXQGHU DQGRIWKH)DLU'HEW
&ROOHFWLRQV3UDFWLFHV$FW)'&3$86&H JDQG DD
DQGRIWKH&RQVXPHU)LQDQFLDO3URWHFWLRQ$FWRI&)3$86&
DD WRDGGUHVVIDOVHGHFHSWLYHRUPLVOHDGLQJ SUDFWLFHVLQ
FRQQHFWLRQZLWKWKHFROOHFWLRQRIGHEW
-85,6',&7,21$1' 9(18(
7KLV&RXUWKDVVXEMHFWPDWWHUMXULVGLFWLRQEHFDXVHWKLVDFWLRQLV³EURXJKW
XQGHU)HGHUDOFRQVXPHUILQDQFLDOODZ´86&DSUHVHQWVDIHGHUDO
7KLV&RXUWKDVSHUVRQDOMXULVGLFWLRQRYHU%RXQFH%DFNEHFDXVHWKHFDXVHV
RIDFWLRQDULVHIURP%RXQFH%DFN¶VFRQGXFWLQWKLVGLVWULFW
9HQXHLVSURSHULQWKLVGLVWULFWEHFDXVH%RXQFH%DFN LVORFDWHGUHVLGHV
DQGGRHVEXVLQHVVLQWKLV GLVWULFW86&I
3$57,(6
7KH%XUHDXLVDQDJHQF\RIWKH8QLWHG6WDWHVFKDUJHGZLWKUHJXODWLQJWKH
RIIHULQJDQGSURYLVLRQRIFRQVXPHUILQDQFLDOSURGXFWVDQGVHUYLFHVXQGHU³)HGHUDO
FRQVXPHUILQDQFLDOODZV´86&DLQFOXGLQJWKH&)3$86&
7KH%XUHDXKDVLQGHSHQGHQWOLWLJDWLQJDXWKRULW\LQFOXGLQJWKHDXWKRULW\WRHQIRUFHWKH
&)3$86&DE
%HFDXVH%RXQFH%DFN LVDFRUSRUDWLRQLWLVD³SHUVRQ´XQGHUWKH&)3$
86&
$WDOOWLPHVUHOHYDQWWRWKLV&RPSODLQW %RXQFH%DFN
KDVEHHQD³FRYHUHG
SHUVRQ´XQGHUWKH&)3$
EHFDXVHLW³HQJDJHVLQRIIHULQJRUSURYLGLQJDFRQVXPHU
ILQDQFLDOSURGXFWRUVHUYLFH´ 86&$
)$&76
2YHUYLHZ
%RXQFH%DFN,QFLVDSULYDWHO\RZQHGFRPSDQ\EDVHGLQ.DQVDV&LW\0LVVRXUL,W
RSHUDWHVEDFNFKHFNSUHWULDOGLYHUVLRQSURJUDPVRQEHKDOIRIPRUHWKDQGLVWULFW
DWWRUQH\V'$VWKURXJKRXWWKH8QLWHG6WDWHV%RXQFH%DFN¶VSUHWULDOGLYHUVLRQSURJUDP
JHQHUDOO\RSHUDWHVDVIROORZV
0HUFKDQWVSULPDULO\ VXEPLWGLVKRQRUHGFKHFNV
WR%RXQFH%DFNWKURXJKLWV
DIILOLDWH&KHFN&RQQHFWLRQ,QF
$IWHUDPHUFKDQWUHSRUWVDGLVKRQRUHGFKHFNWR&KHFN&RQQHFWLRQ&KHFN
&RQQHFWLRQDGGVLWWRDOLVWRIGLVKRQRUHGFKHFNVE\MXULVGLFWLRQDQGVHQGVLW
WRWKH
SHUWLQHQW'$ IRUUHYLHZ
,QQHDUO\DOOFDVHVZLWKRXWUHFHLYLQJIXUWKHUGLUHFWLRQIURPWKH'$
%RXQFH%DFNWKHQ DWWHPSWVWRHQUROO WKH
FKHFNZULWHUVLQLWVSUHWULDOGLYHUVLRQSURJUDP
ZKLFKUHTXLUHVD
FKHFNZULWHUWRSD\WKHGHEWDQGDOVRHQUROOLQSD\IRUDQGFRPSOHWHD
ILQDQFLDOHGXFDWLRQFRXUVH
2QUDUHRFFDVLRQVPHUFKDQWVVHQGWKHQDPHVRIFKHFN ZULWHUV
GLUHFWO\WR
WKHORFDO'$ZKRWKHQIRUZDUGV WR%RXQFH%DFNWKH
QDPHVRIVSHFLILFFKHFNZULWHUV ZKR
LW ZDQWV HQUROOHGLQWKHSUHWULDOGLYHUVLRQSURJUDP
,QPRVWFDVHVKRZHYHU&KHFN
&RQQHFWLRQJHQHUDWHVDOLVWRIFKHFN
ZULWHUVWKDWLWVHQGVWR%RXQFH%DFNZKLFK HQUROOV
WKRVHFKHFNZULWHUV LQLWVFROOHFWLRQV
SURJUDPZLWKRXWHYHUUHFHLYLQJGLUHFWLRQIURPWKH
'$WRGRVR
%RXQFH%DFNWKHQVHQGVWZRWRIRXUOHWWHUVRQ'$OHWWHUKHDG WRWKHFKHFN
ZULWHUVLQDQHIIRUWWRFROOHFWWKHRXWVWDQGLQJGHEWVDQGHQUROOWKHPLQWKHILQDQFLDO
HGXFDWLRQ FRXUVH
7KHOHWWHUV WHOOFKHFNZULWHUV
WKDWWKH\FRXOGIDFHFULPLQDOSURVHFXWLRQDQG
FRQYLFWLRQEXWWKDWWKH\FDQDYRLGSURVHFXWLRQ E\SD\LQJ
WKHDPRXQWRIWKHGLVKRQRUHG
FKHFNDORQJZLWKFHUWDLQDGPLQLVWUDWLYH IHHV
DQGFRPSOHWLQJDILQDQFLDOHGXFDWLRQ
FRXUVH7KHUHFLSLHQWLVLQVWUXFWHGWRSD\WKHWRWDOIHHVRZHGWRWKH³&KHFN(QIRUFHPHQW
3URJUDP´LQUHDOLW\%RXQFH%DFNLQFOXGLQJDIHHIRUWKHILQDQFLDOHGXFDWLRQFRXUVHWKDW
UDQJHVIURPWR,IWKHFKHFNZULWHU SD\V WKHVHDPRXQWVWKHQ%RXQFH%DFN
VHQGVWKHDPRXQWRIWKHGLVKRQRUHGFKHFNWRWKHPHUFKDQWSD\VVPDOOIHHV
WRWKH
PHUFKDQWDQGWKH'$DQGNHHSVWKHEDODQFH
%RXQFH%DFN GRHVQRW LGHQWLI\ LWVHOIWRFKHFNZULWHUV
DQGGRHVQRWLQIRUP
WKHPWKDWLWLVDGHEWFROOHFWRU
$OWKRXJK%RXQFH%DFN¶VOHWWHUVDSSHDUWRFRPHGLUHFWO\IURPWKH'$ DQG
VXJJHVWWKDWFKHFNZULWHUV
ZLOOIDFHFULPLQDOFKDUJHVLIWKH\GRQRWFRPSO\'$VDOPRVW
QHYHUSURVHFXWHVXFKFDVHV
0RUHRYHUQHDUO\DOOMXULVGLFWLRQVKDYHJLYHQ%RXQFH%DFNRQHVHWRI
FULWHULDIRUVHQGLQJZDUQLQJ OHWWHUVWRFKHFN
ZULWHUVDQGHQUROOLQJWKHPLQDILQDQFLDO
HGXFDWLRQ FRXUVHDQGDVHSDUDWHPRUHVWULQJHQW
VHWRIFULWHULDIRUUHIHUULQJDFDVHEDFN
WRWKH'$IRUSRWHQWLDOSURVHFXWLRQ ZKHQDFKHFNZULWHU
IDLOVWRUHVSRQGWRDOHWWHU
*LYHQWKHVHGLVWLQFWFULWHULD QRWDOOFKHFNZULWHUVZKRUHFHLYH%RXQFH%DFN¶V
ZDUQLQJ
OHWWHUV DUHHYHQHOLJLEOHIRUSURVHFXWLRQ XQGHUWKH'$V¶
SURVHFXWLRQFULWHULD
,Q PRVWFDVHV%RXQFH%DFNGRHVQRW
UHIHUFDVHVIRUSURVHFXWLRQHYHQLIWKH
FKHFNZULWHUIDLOVWRUHVSRQGWRWKHOHWWHUGRHVQRWSD\WKHDOOHJHGRXWVWDQGLQJGHEW
DQG
IHHVRUIDLOV WRFRPSOHWHWKHILQDQFLDOHGXFDWLRQFRXUVH
%RXQFH%DFNKDVVHQWFROOHFWLRQOHWWHUVWRPRUHWKDQFRQVXPHUV
VLQFH-DQXDU\
%RXQFH%DFNLVD'HEW&ROOHFWRU 8QGHUWKH)'&3$
%RXQFH%DFNLVDGHEWFROOHFWRUXQGHU WKH)'&3$
8QGHU86&DDGHEWFROOHFWRULV³DQ\SHUVRQZKRXVHVDQ\
LQVWUXPHQWRULQVWUXPHQWDOLW\RILQWHUVWDWHFRPPHUFHRUWKHPDLOVLQDQ\EXVLQHVVWKH
SULQFLSDOSXUSRVHRIZKLFKLVWKHFROOHFWLRQRIDQ\GHEWVRUZKRUHJXODUO\FROOHFWVRU
DWWHPSWVWRFROOHFWGLUHFWO\RULQGLUHFWO\GHEWVRZHGRUGXHRUDVVHUWHGWREHRZHGRU
GXHDQRWKHU´
7KH)'&3$SURYLGHVWKDWDQHQWLW\RSHUDWLQJ DEDGFKHFNGLYHUVLRQ
SURJUDPWKURXJKDFRQWUDFWZLWKD'$
PD\QRWEHFRQVLGHUHGDGHEWFROOHFWRULIWKH
HQWLW\
FRPSOLHVZLWKFHUWDLQVWDWXWRU\UHTXLUHPHQWV%RXQFH%DFNGLGQRWFRPSO\ZLWK
WKRVHUHTXLUHPHQWV
,QPRVWFDVHV%RXQFH%DFNFRQWDFWV FKHFNZULWHUV DQG DWWHPSWV
WRFROOHFW
RQGLVKRQRUHGFKHFNV DQG HQUROOWKHFKHFNZULWHUV
LQLWVSUHWULDOGLYHUVLRQSURJUDP
ZLWKRXWWKH'$KDYLQJPDGHDGHWHUPLQDWLRQWKDW³SUREDEOHFDXVHRIDEDGFKHFN
YLRODWLRQXQGHU6WDWHSHQDOODZH[LVWVDQGWKDWFRQWDFWZLWKWKHDOOHJHGRIIHQGHUIRU
SXUSRVHVRISDUWLFLSDWLRQ
LQWKHSURJUDPLVDSSURSULDWH´DVUHTXLUHGE\86&
SD&LY,
,QDGGLWLRQ%RXQFH%DFN¶VOHWWHUVGR
QRWFRQWDLQDFOHDUDQGFRQVSLFXRXV
VWDWHPHQWWKDWLIWKHDOOHJHGRIIHQGHUQRWLILHVWKHSULYDWHHQWLW\RUWKH'$
LQZULWLQJQRW
ODWHUWKDQGD\VDIWHUEHLQJFRQWDFWHGIRUWKHILUVWWLPH
SXUVXDQWWR86&
SD&LY WKDWWKHUHLVDGLVSXWH SXUVXDQWWR86&SDWKHQ
IXUWKHUUHVWLWXWLRQHIIRUWVZLOOQRWEHSXUVXHGXQWLOWKH'$
RUDQHPSOR\HHRIWKH '$
DXWKRUL]HG
WRPDNHVXFKDGHWHUPLQDWLRQPDNHVDGHWHUPLQDWLRQWKDWWKHUHLVSUREDEOH
FDXVHWREHOLHYHWKDWDFULPHKDVEHHQFRPPLWWHGDVUHTXLUHGE\86&
SD&Y,,,
)DOVH'HFHSWLYHRU0LVOHDGLQJ 5HSUHVHQWDWLRQV
LQ&RQQHFWLRQZLWK&ROOHFWLQJD'HEW
D %RXQFH%DFNIDOVHO\UHSUHVHQWV WKDWQRQSD\PHQWZLOO
UHVXOWLQFULPLQDOSURVHFXWLRQ
FDQFKDQJHDFFRUGLQJWRLWV SUHIHUHQFHV0RVW'$VPDNH IHZ LIDQ\
FKDQJHVWRWKH
WHPSODWH
%RXQFH%DFN¶VFROOHFWLRQOHWWHUVVWDWH LQVHYHUDO
ZD\VWKDWDFKHFNZULWHU
ZKRGRHVQRWSD\WKHRXWVWDQGLQJFKHFNDPRXQWDQGIHHVIRUWKHSUHWULDOGLYHUVLRQ
SURJUDPPD\IDFH³FULPLQDOFKDUJHV´RU³FULPLQDOSURVHFXWLRQ´
D ³:$51,1*2)&5,0,1$/&+$5*(6´
E ³WKHWRWDODPRXQWPXVWEHUHFHLYHGWRDYRLGSRVVLEOHFULPLQDO
FKDUJHVEHLQJILOHG´
F ³SD\WKHWRWDOOLVWHGEHORZWRDYRLGWKHSRVVLELOLW\ RIFULPLQDO
SURVHFXWLRQ´
G ³,WLVVWLOOSRVVLEOHWRDYRLGD&5,0,1$/&219,&7,21´
H ³:$51,1*<RXKDYHKRXUVWRFRQWDFWWKH&KHFN
(QIRUFHPHQW3URJUDPEHIRUH\RXUFDVHLVIRUZDUGHGWRILQDOUHYLHZ
,IWKHFKHFNVLVQRWWDNHQFDUHRIDFULPLQDOFRPSODLQWDQGD
:$55$17PD\EHLVVXHGFRPPDQGLQJ\RXWRDSSHDULQFRXUWDQG
&5,0,1$/352&((',1*6PD\UHVXOW´
I ³)DLOXUHWRPDNHSD\PHQWLQIXOOZLWKLQ7+,57<'$<6IURP
WKHGDWHRIWKLVQRWLFHPD\EHXVHGDVHYLGHQFHLQDSRVVLEOH
FULPLQDOSURVHFXWLRQ´
J ³,ISD\PHQWFDQEHDUUDQJHGDQGFRPSOLDQFHZLWKWKHFRQGLWLRQVRI
WKH&KHFN(QIRUFHPHQW3URJUDPDUHPHW\RXPD\\HWEHDEOHWR
SUHYHQWWKHSRVVLELOLW\RID:$55$17)25<285$55(67EHLQJ LVVXHG´
K ³72&203/<3D\WKHIXOOGROODUDPRXQWVKRZQZLWKLQWKLUW\
GD\V&RPSOHWHWKH&KHFN:ULWHU¶V)LQDQFLDO7UDLQLQJ&RXUVH´
L ³$//FKHFNZULWHUVZKRVHFKHFNVKDYHEHHQUHIHUUHGWRWKH&KHFN
(QIRUFHPHQW3URJUDP0867FRPSOHWHWKH(GXFDWLRQDO
5HTXLUHPHQWWRGLVFKDUJHWKHFDVHDVSDUWRIWKLVGLYHUVLRQ SURJUDP´
M ³)$,/85(72&203/(7(7+(('8&$7,21$/5(48,5(0(17
&$1&$86(<285&$6(',9(56,2172%(5(92.('´
7KHVHWKUHDWV DUHLQDOPRVWDOOLQVWDQFHVIDOVH
(DFK'$
JLYHV%RXQFH%DFNFULWHULDIRUVHQGLQJRXWLWVFROOHFWLRQOHWWHUV
DQGGLIIHUHQWRIWHQPRUHVWULQJHQW
FULWHULDIRUGHWHUPLQLQJZKLFKFDVHVZLOOEHUHIHUUHG
EDFNWRWKH'$ IRUDUHYLHZIRUSURVHFXWLRQ
%RXQFH%DFN VHQGV FROOHFWLRQOHWWHUVWRFKHFNZULWHUV ZKRGR
QRWPHHWWKH
'$V¶ FULWHULD IRUUHIHUUDO IRUSURVHFXWLRQ
)RUH[DPSOHDWOHDVWRIWKHPRUHWKDQ MXULVGLFWLRQVWKDW%RXQFH%DFN
KDVFRQWUDFWHGZLWKZLOOQRWSURVHFXWHFKHFNZULWHUV
LIWKHGLVKRQRUHGFKHFNLVEHORZD
FHUWDLQDPRXQWEXW%RXQFH%DFNQHYHUWKHOHVVWKUHDWHQV WKRVHFKHFNZULWHUV
ZLWK
SURVHFXWLRQ
0RUHRYHUHYHQLID FKHFNZULWHUTXDOLILHV IRU
SURVHFXWLRQ%RXQFH%DFN
UDUHO\UHIHUV FDVHVIRUSRWHQWLDOSURVHFXWLRQ
0RVW'$VUHIXVHWRSURVHFXWHGLVKRQRUHGFKHFNFDVHVHYHQLIFKHFNZULWHUV
IDLOWRUHVSRQG WR%RXQFH%DFN¶VOHWWHUV
)LQDOO\DOPRVWQRQHRIWKHFKHFNZULWHUV ZKRHQUROOLQWKHILQDQFLDO
HGXFDWLRQFRXUVHUHWXUQWKHFRQILUPDWLRQWKDWWKH\KDYHFRPSOHWHGWKHFRXUVH
DQG
PDQ\
QHYHUFRPSOHWHWKHFRXUVH&RQWUDU\WRWKHWKUHDWVLQ%RXQFH%DFN¶VOHWWHUV
%RXQFH%DFNQHYHUUHIHUVWKRVHFKHFNZULWHUV
WRWKH'$IRUSRVVLEOHSURVHFXWLRQ
E %RXQFH%DFNFUHDWHV WKHIDOVHLPSUHVVLRQWKDWWKH
FROOHFWLRQOHWWHUVLWVHQGV DUH FRPLQJGLUHFWO\IURPD'$
%RXQFH%DFN¶VOHWWHUVDUHVHQWRQ'$OHWWHUKHDGDQGDSSHDUWREH
VWDWHPHQWVIURPWKH'$
)RULQVWDQFHDW\SLFDOOHWWHUEHDUVWKH'$¶VQDPHDQGVHDODWWKHWRS7KH
OHWWHUDOVRWHOOVWKHFKHFNSD\HUWRVHQGSD\PHQWWRWKH³>'$¶V@&KHFN(QIRUFHPHQW
7KHOHWWHUQRZKHUHVWDWHVWKDWLWZDVVHQWE\%RXQFH%DFNHYHQWKRXJKWKH
OHWWHUFRPHVGLUHFWO\IURP%RXQFH%DFNQRWD'$
F %RXQFH%DFN¶VFROOHFWLRQOHWWHUV GR QRWUHYHDOWKDW %RXQFH%DFN
LVDGHEWFROOHFWRU
%RXQFH%DFNVHQGV
OHWWHUVWKDWIDLOWRVWDWHDQ\ZKHUHWKDW%RXQFH%DFNLVD
GHEWFROOHFWRURUWKDWDQ\LQIRUPDWLRQLWREWDLQV ZLOO
EHXVHGIRUFROOHFWLRQV SXUSRVHV
QRUGRHV %RXQFH%DFN
GLVFORVHLQVXEVHTXHQWOHWWHUVRUSKRQHFDOOVZLWKFKHFNZULWHUV
WKDWLWLV DGHEWFROOHFWRU
0RUHRYHUEHFDXVHLWVOHWWHUVDUHVHQWRQ'$OHWWHUKHDGXVLQJWKH'$¶VVHDO
DQGUHIHUWRWKH'$¶V³&KHFN(QIRUFHPHQW3URJUDP´LWLVXQOLNHO\WKDWDUHFLSLHQW
ZRXOG
VXVSHFWWKDWWKHOHWWHULVEHLQJVHQWE\DGHEWFROOHFWRU
G %RXQFH%DFNIDLOV WRLQFOXGHFHUWDLQUHTXLUHGGLVSXWH
QRWLFHVLQLWVFROOHFWLRQOHWWHUV
%RXQFH%DFN¶VFROOHFWLRQOHWWHUVIDLOWRFRQWDLQVHYHUDOUHTXLUHGGLVFORVXUHV
6HYHUDORI%RXQFH%DFN¶VOHWWHUV
VWDWH³<280867(,7+(5&203/<%<
0$.,1*3$<0(1725127,)<7+(&+(&.(1)25&(0(17352*5$0,1
:5,7,1*7+$7<28:,6+72',6387(7+,60$77(512/$7(57+$1'$<6
$)7(55(&(,9,1*7+,6127,&(´DQG³3$<0(1725',6>3@87(0867%(0$'(
:,7+,17+,57<'$<6)5207+('$7(2)7+,6/(77(5´
%XWWKHVHVDPHOHWWHUV GRQRW GLVFORVHWKDWXQOHVVDUHFLSLHQW
GLVSXWHVWKH
YDOLGLW\RIWKHGHEWZLWKLQGD\VWKHGHEWZLOOEHDVVXPHGYDOLGWKDWLIDUHFLSLHQW
GLVSXWHVWKHYDOLGLW\RIWKHGHEWZLWKLQGD\VWKHFROOHFWRUPXVWYHULI\WKHGHEWRU
WKDWLIDUHFLSLHQW
PDNHVDUHTXHVWZLWKLQGD\VWKHFROOHFWRUZLOOSURYLGHWKHRULJLQDO
FUHGLWRU¶VQDPHDQGDGGUHVV
9,2/$7,2162)/$:
&2817²9LRODWLRQV RIWKH)'&3$
)DOVHO\5HSUHVHQWLQJWKDW1RQSD\PHQW:RXOG
5HVXOWLQ&ULPLQDO3URVHFXWLRQ
6HFWLRQHRIWKH)'&3$SURKLELWV³>W@KHUHSUHVHQWDWLRQRU
LPSOLFDWLRQWKDWQRQSD\PHQWRIDQ\GHEWZLOOUHVXOWLQWKHDUUHVWRULPSULVRQPHQWRIDQ\
SHUVRQRUWKHVHL]XUHJDUQLVKPHQWDWWDFKPHQWRUVDOHRIDQ\SURSHUW\RUZDJHVRIDQ\
SHUVRQXQOHVVVXFKDFWLRQLVODZIXODQGWKHGHEWFROOHFWRURUFUHGLWRULQWHQGVWRWDNH
VXFKDFWLRQ´ 86&H
6HFWLRQ
HRIWKH)'&3$SURKLELWV³>W@KHWKUHDWWRWDNHDQ\DFWLRQ
WKDWFDQQRWOHJDOO\EHWDNHQRUWKDWLVQRWLQWHQGHGWREHWDNHQ´ 86&
H
,QFRQQHFWLRQZLWKFROOHFWLQJRUDWWHPSWLQJWRFROOHFWGHEWIURP
FRQVXPHUV%RXQFH%DFN
UHSUHVHQWHGWRFRQVXPHUVGLUHFWO\RULQGLUHFWO\H[SUHVVO\RU
E\LPSOLFDWLRQWKDWQRQSD\PHQWRIDGHEWZRXOG
UHVXOWLQDUUHVWRULPSULVRQPHQW
,QIDFWQHLWKHU%RXQFH%DFN QRUWKH'$VLQWHQGHG WRWDNHVXFKDFWLRQ
7KHVH DFWV DQGSUDFWLFHVYLRODWHG DQGRIWKH)'&3$86&
H
&2817² 9LRODWLRQV RIWKH)'&3$
'LVWULEXWLQJ:ULWWHQ&RPPXQLFDWLRQVWKDW
)DOVHO\5HSUHVHQWHGWREH,VVXHG E\D6WDWH2IILFLDORU$JHQF\
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
6HFWLRQHSURKLELWV WKH³XVHRUGLVWULEXWLRQRIDQ\ZULWWHQ
FRPPXQLFDWLRQZKLFKVLPXODWHVRULVIDOVHO\UHSUHVHQWHGWREHDGRFXPHQWDXWKRUL]HG
ZKLFKFUHDWHVDIDOVHLPSUHVVLRQDVWRLWVVRXUFHDXWKRUL]DWLRQRUDSSURYDO´
86&
H
6HFWLRQHIXUWKHUSURKLELWV³>W@KHXVHRIDQ\EXVLQHVVFRPSDQ\
RURUJDQL]DWLRQQDPHRWKHUWKDQWKHWUXHQDPHRIWKHGHEWFROOHFWRU¶VEXVLQHVV
FRPSDQ\RURUJDQL]DWLRQ´ 86&H
,QFRQQHFWLRQZLWKFROOHFWLQJRUDWWHPSWLQJWRFROOHFWGHEWIURP
FRQVXPHUV%RXQFH%DFN
UHSUHVHQWHGWRFRQVXPHUVGLUHFWO\RULQGLUHFWO\H[SUHVVO\RU
E\LPSOLFDWLRQWKDWZULWWHQFRPPXQLFDWLRQVGLVWULEXWHGWRFRQVXPHUVZHUHLVVXHGIURP
DQRIILFLDORUDJHQF\RID6WDWH
,QIDFWWKHFRPPXQLFDWLRQVZHUH IURP%RXQFH%DFNZKLFK XVHGWKH
QDPHVRIWKH'$V LQFRQQHFWLRQZLWKFROOHFWLQJRUDWWHPSWLQJWRFROOHFWGHEWV
IURP
FRQVXPHUV
86&H
&2817²9LRODWLRQV RIWKH)'&3$ 8VLQJ)DOVH5HSUHVHQWDWLRQVDQG
'HFHSWLYH0HDQVWR&ROOHFWD'HEW
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
6HFWLRQHRIWKH)'&3$SURKLELWV WKH ³XVHRIDQ\IDOVH
UHSUHVHQWDWLRQRUGHFHSWLYHPHDQVWRFROOHFWRUDWWHPSWWRFROOHFWDQ\GHEWRUWRREWDLQ
LQIRUPDWLRQFRQFHUQLQJDFRQVXPHU´ 86&H
%RXQFH%DFNIDOVHO\UHSUHVHQWHGWKDWWKHIDLOXUHWRDSD\WKHIHHVOLVWHG
LQFOXGLQJWKHGLVKRQRUHGFKHFNDPRXQWDGPLQLVWUDWLYHIHHVDQGIHHVIRUWKHILQDQFLDO
HGXFDWLRQ FRXUVHDQGEFRPSOHWHWKHILQDQFLDOHGXFDWLRQ
FRXUVHZRXOGOHDGWR
0RUHRYHU%RXQFH%DFNGHVLJQHGLWVFROOHFWLRQOHWWHUVWR DSSHDUWRFRPH
GLUHFWO\IURPWKH'$ZKHQLQIDFW WKH\ GLGQRW
7KHVH DFWV DQGSUDFWLFHVYLRODWHG RIWKH)'&3$86&
H
&2817²9LRODWLRQV RIWKH)'&3$
)DLOLQJWR5HYHDOWKDW%RXQFH%DFNZDVD'HEW&ROOHFWRU
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
6HFWLRQHRIWKH)'&3$SURKLELWVWKH³>W@KHIDLOXUHWRGLVFORVHLQ
WKHLQLWLDOZULWWHQFRPPXQLFDWLRQZLWKWKHFRQVXPHUWKDWWKHGHEWFROOHFWRULV
DWWHPSWLQJWRFROOHFWDGHEWDQGWKDWDQ\LQIRUPDWLRQREWDLQHGZLOOEHXVHGIRUWKDW
SXUSRVHDQGWKHIDLOXUHWRGLVFORVHLQVXEVHTXHQWFRPPXQLFDWLRQVWKDWWKH
FRPPXQLFDWLRQLVIURPDGHEWFROOHFWRU´ 86&H
%RXQFH%DFN¶VLQLWLDOFRPPXQLFDWLRQVWRFRQVXPHUVGLGQRWLQFOXGHWKDW
UHTXLUHGGLVFORVXUH
7KHVH DFWV DQGSUDFWLFHVYLRODWHG RIWKH)'&3$86&
H
&2817²9LRODWLRQV RIWKH)'&3$
)DLOXUHWR,QFOXGH5HTXLUHG'LVSXWH1RWLFHV
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
6HFWLRQJDRIWKH)'&3$
SURYLGHVWKDW³>Z@LWKLQILYHGD\VDIWHUWKH
LQLWLDOFRPPXQLFDWLRQZLWKDFRQVXPHULQFRQQHFWLRQZLWKWKHFROOHFWLRQRIDQ\GHEWD
GHEWFROOHFWRUVKDOOXQOHVVWKHIROORZLQJLQIRUPDWLRQLVFRQWDLQHGLQWKHLQLWLDO
FRPPXQLFDWLRQRUWKHFRQVXPHUKDVSDLGWKHGHEWVHQGWKHFRQVXPHUDZULWWHQQRWLFH
FRQWDLQLQJ´VHYHUDOVSHFLILFGLVFORVXUHV
$PRQJWKHVHDUHWKHDPRXQWRIWKHGHEWWKHQDPHRIWKHFUHGLWRURZHG
DQGVSHFLILFVWDWHPHQWVDERXWKRZDFRQVXPHUFDQGLVSXWHDGHEWDQGWKHHIIHFWRIGRLQJ
VR 86&JD
%RXQFH%DFN¶VFROOHFWLRQOHWWHUVIDLOHG
WRPDNHWKHVSHFLILFGLVFORVXUHV
UHTXLUHGE\JD
7KHVH DFWV DQGSUDFWLFHVYLRODWHG DRIWKH)'&3$86&
JD
&2817²9LRODWLRQV RIWKH&)3$
'HFHSWLYH5HSUHVHQWDWLRQVWKDW)DLOXUHWR3D\WKH
$OOHJHG'HEWDQG3URJUDP)HHV:RXOG5HVXOWLQ3URVHFXWLRQ
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
%RXQFH%DFN¶VFROOHFWLRQOHWWHUVFRQWDLQHGWKUHDWVWKDWQRWSD\LQJWKH
DOOHJHGGHEWDQGUHTXLUHGSUHWULDOGLYHUVLRQSURJUDPIHHVZRXOGUHVXOWLQSURVHFXWLRQ
ZKHQ LQIDFW LWZRXOGQRW
7KHVH UHSUHVHQWDWLRQVZHUHIDOVHEHFDXVH LQPRVWFDVHV WKH'$VGLG
QRW
LQWHQGWRSURVHFXWHLQGLYLGXDOVZKRUHFHLYHG
FROOHFWLRQOHWWHUVWKUHDWHQLQJIXUWKHUDFWLRQ
RUSURVHFXWLRQ$QGDOPRVWQRQHRIWKHFKHFNZULWHUV
ZKRIDLOHGWRUHVSRQGWR
%RXQFH%DFN¶VFROOHFWLRQOHWWHUVZHUHHYHUUHIHUUHGWRD'$
IRU³UHYLHZIRUSURVHFXWLRQ´
%RXQFH%DFN¶VPLVUHSUHVHQWDWLRQVZHUHOLNHO\WRPLVOHDGFRQVXPHUVDFWLQJ
UHDVRQDEO\XQGHUWKHFLUFXPVWDQFHV
%RXQFH%DFN¶V
PLVUHSUHVHQWDWLRQVZHUHPDWHULDOEHFDXVHWKH\ZHUHOLNHO\
WRDIIHFWWKHFRQGXFWRUGHFLVLRQVRIFRQVXPHUVUHJDUGLQJZKHWKHUWR
SD\WKHDOOHJHG
GHEWDQGDQ\RWKHUSURJUDPIHHV
7KHUHIRUH%RXQFH%DFNHQJDJHGLQGHFHSWLYHDFWVRUSUDFWLFHV
WKDWYLRODWHG
WKH&)3$86&DD%
&2817²9LRODWLRQV RIWKH&)3$
'HFHSWLYH5HSUHVHQWDWLRQVWKDW)DLOXUHWR&RPSOHWH
WKH)LQDQFLDO(GXFDWLRQ&RXUVH:RXOG5HVXOWLQ3URVHFXWLRQ
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
%RXQFH%DFN ¶VFROOHFWLRQOHWWHUVVWDWHGWKDWIDLOXUHWRFRPSOHWH WKH
ILQDQFLDOHGXFDWLRQFRXUVH ZRXOGUHVXOWLQFULPLQDOSURVHFXWLRQ
,QIDFWWKHVHUHSUHVHQWDWLRQVZHUHIDOVHEHFDXVHYHU\IHZFKHFNZULWHUV
UHWXUQHG SURRIWKDWWKH\FRPSOHWHGWKHILQDQFLDOHGXFDWLRQ
FRXUVHEXWQRFKHFNZULWHUV
ZHUHHYHUUHIHUUHGIRUFULPLQDOSURVHFXWLRQIRUWKDWUHDVRQ
%RXQFH%DFN¶VPLVUHSUHVHQWDWLRQVZHUHOLNHO\WRPLVOHDGFRQVXPHUVDFWLQJ
UHDVRQDEO\XQGHUWKHFLUFXPVWDQFHV
%RXQFH%DFN¶VPLVUHSUHVHQWDWLRQVZHUHPDWHULDOEHFDXVHWKH\ZHUHOLNHO\
WRDIIHFWWKHFRQGXFWRUGHFLVLRQVRIFRQVXPHUVUHJDUGLQJZKHWKHUWRSD\
WKHSURJUDP
IHHV IRUWKHILQDQFLDOHGXFDWLRQFRXUVH
7KHUHIRUH%RXQFH%DFN HQJDJHGLQGHFHSWLYHDFWVRUSUDFWLFHV
WKDWYLRODWHG
WKH&)3$86&DD%
&2817²9LRODWLRQV RIWKH&)3$
'HFHSWLYH5HSUHVHQWDWLRQVWKDW1RWLFHV :HUHIURPD'$
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
%RXQFH%DFN¶VFROOHFWLRQOHWWHUVJDYHWKHLPSUHVVLRQWKDW
WKH\FDPHGLUHFWO\
IURPD'$ZKHQ LQIDFW WKH\GLGQRW
%RXQFH%DFN¶VPLVUHSUHVHQWDWLRQVZHUHOLNHO\WRPLVOHDGFRQVXPHUVDFWLQJ
UHDVRQDEO\XQGHUWKHFLUFXPVWDQFHV
%RXQFH%DFN¶VPLVUHSUHVHQWDWLRQVZHUHPDWHULDOEHFDXVHWKH\ZHUHOLNHO\
WRDIIHFWWKHFRQGXFWRUGHFLVLRQVRIFRQVXPHUVUHJDUGLQJZKHWKHUWRSD\WKHDOOHJHG
GHEWDQGSURJUDPIHHV
7KHUHIRUH%RXQFH%DFN HQJDJHGLQGHFHSWLYHDFWVRUSUDFWLFHV
WKDWYLRODWHG
WKH&)3$86&DD%
&2817²9LRODWLRQV RIWKH&)3$
7KH%XUHDXUHDOOHJHVDQGLQFRUSRUDWHVE\UHIHUHQFHSDUDJUDSKV
$ FRYHUHGSHUVRQ¶VYLRODWLRQRIDIHGHUDOFRQVXPHUILQDQFLDOODZ
YLRODWHV
WKH&)3$ 86&D$
%RXQFH%DFN¶V)'&3$YLRODWLRQV DUH HDFK DYLRODWLRQ RI86&
D$
'(0$1')255(/,()
7KH%XUHDXUHTXHVWVWKDWWKH&RXUWDVSHUPLWWHGE\86&
D HQMRLQ%RXQFH%DFN
IURPFRPPLWWLQJIXWXUHYLRODWLRQVRIWKH)'&3$
E HQMRLQ%RXQFH%DFN
IURPFRPPLWWLQJIXWXUHYLRODWLRQVRIWKH&)3$
F DZDUGGDPDJHVRURWKHUPRQHWDU\UHOLHIDJDLQVW%RXQFH%DFN
G RUGHU%RXQFH%DFN WRSD\UHGUHVVWRFRQVXPHUV
H RUGHU GLVJRUJHPHQWRI%RXQFH%DFN¶V LOOJRWWHQJDLQV
I LPSRVHFLYLOPRQH\SHQDOWLHVRQ%RXQFH%DFN
J RUGHU%RXQFH%DFN WRSD\WKHFRVWVLQFXUUHGLQFRQQHFWLRQZLWK
SURVHFXWLQJWKLVDFWLRQDQG
K
DZDUGDGGLWLRQDOUHOLHIDVWKH&RXUWPD\GHWHUPLQHWREHMXVWDQGSURSHU
5HVSHFWIXOO\VXEPLWWHG
7+20$6*:$5' (QIRUFHPHQW'LUHFWRU -())5(<3$8/(+5/,&+
'HSXW\(QIRUFHPHQW'LUHFWRU 2:(10$57,.$1
$VVLVWDQW/LWLJDWLRQ'HSXW\
V6WHSKDQLH'XII2¶%U\DQ 67(3+$1,('8))2¶%5<$1 7;1R1<1R
(QIRUFHPHQW $WWRUQH\ 7HOHSKRQH HPDLO6WHSKDQLH'XII2%U\DQ#FISEJRY
-$0(60($'( '&1R 6HQLRU/LWLJDWLRQ&RXQVHO 7HOHSKRQH
HPDLO-DPHV0HDGH#FISEJRY %XUHDXRI&RQVXPHU)LQDQFLDO3URWHFWLRQ
*6WUHHW1: :DVKLQJWRQ'&
'HVLJQDWHG$WWRUQH\ IRU5HFHLSWRI6HUYLFH