:KHQ)RUHFORVXUH7KUHDWHQV(OGHU&DUH

+RPHV

%\/$85,(8'(6.<

3XEOLVKHG$SULO

,Q6HSWHPEHU6JW5LFN7XULQLRIWKH6DQWD&ODUD&RXQW\6KHULII¶V2IILFHGURYHWRDKRXVH
LQ6DQ-RVHWRFDUU\RXWDFRXUWRUGHUHGHYLFWLRQ
:LWKIRUHFORVXUHVLQ%D\$UHDFRXQWLHVQHDUDOOWLPHKLJKVWKHRIILFHKDGEHHQURXWLQHO\HYLFWLQJ
WRKRXVHKROGVDZHHN%XWWKLVSURSHUW\ZDVGLIIHUHQW,WZDVDERDUGDQGFDUHKRPHIRU
WKHHOGHUO\
1HLWKHUWKHUHVLGHQWVQRUWKHLUIDPLOLHVKDGEHHQZDUQHGDERXWDQHYLFWLRQVDLG6HUJHDQW7XULQL
ZKRGRHVQRWUHFDOOWKHKRPH¶VH[DFWDGGUHVV
:KHQKHDUULYHGZLWKKLVSDUWQHUWKHKRXVHZDVVWLOORFFXSLHGDQGWKHGLVWUDXJKWGDXJKWHURIDQ
HOGHUO\EHGULGGHQZRPDQZDVVWUXJJOLQJWRJHWKHUPRWKHULQWRDFDU$FRXSOHRIWHHQDJHUV
GRLQJKRPHZRUNLQWKHOLYLQJURRPORRNHGXSDWWKHRIILFHUVLQVKRFN
³:HJRWDFDOOIURP$GXOW3URWHFWLYH6HUYLFHVOHWWLQJXVNQRZWKDWWKHKRXVHZHZHUHHYLFWLQJ
KDGIRXURUILYHEHGULGGHQUHVLGHQWVDQGWKHJX\ZDVLJQRULQJWKHHYLFWLRQQRWLFH´6HUJHDQW
7XULQLVDLGUHIHUULQJWRWKHRZQHU³,FRXOGQ¶WEHOLHYHLWKDGJRQHWKLVIDU´
+HVDLGWKHVKHULII¶VGHSDUWPHQWZRUNHGZLWKDJHQFLHVWRDUUDQJHIRUWKHIUDJLOHLQKDELWDQWVWREH
WUDQVIHUUHGWRRWKHUIDFLOLWLHVRUVHQWKRPHZLWKUHODWLYHV
³+HUHDWWKHVKHULII¶VRIILFHZH¶UHQRWJRLQJWRSXWDSHUVRQZKRFDQ¶WWDNHFDUHRIWKHPVHOYHVRXW
RQWKHVWUHHW´WKHVHUJHDQWVDLG
%HFDXVHRIDORRSKROHLQWKHODZRZQHUVRIUHVLGHQWLDOFDUHIDFLOLWLHVIRUWKHHOGHUO\²ZKRRIWHQ
GRXEOHDVDGPLQLVWUDWRUV²GRQRWKDYHWRWHOOWKHLUUHVLGHQWVRUWKHUHVLGHQWV¶IDPLOLHVLIWKH\
PLVVPRUWJDJHSD\PHQWVRUDUHRQWKHEULQNRIIRUHFORVXUH
$QDQDO\VLVRIGDWDE\7KH1HZ<RUN7LPHVVKRZVWKDWPRUHWKDQHOGHUFDUHKRPHVLQWKH
%D\$UHDZHUHXQGHUIRUHFORVXUHLQWKHODVWVL[PRQWKVDQGWKDWDVPDQ\DVUHVLGHQWV²
ZKRRIWHQQHHGKHOSZLWKEDWKLQJHDWLQJDQGRWKHUGDLO\DFWLYLWLHV²PD\KDYHIDFHGHYLFWLRQ
$WWKHWLPHWKH\DUHOLFHQVHGE\WKH&DOLIRUQLD'HSDUWPHQWRI6RFLDO6HUYLFHVRZQHUVRIWKH
KRPHVDUHUHTXLUHGWRVKRZHQRXJKILQDQFLDOZKHUHZLWKDORQO\WRFRYHUWKUHHPRQWKVRI
RSHUDWLQJFRVWV8QOHVVFRPSODLQWVDUHPDGHWRWKHDJHQF\FXUUHQWODZUHTXLUHVWKDWWKHVH
KRPHVEHYLVLWHGRQO\HYHU\ILYH\HDUV
³:KRLVPLQGLQJWKHVKRS"´DVNHG$QWKRQ\&KLFRWHODVWDIIODZ\HUZLWKWKH&DOLIRUQLD$GYRFDWHV
IRU1XUVLQJ+RPH5HIRUPZKLFKLVFRVSRQVRULQJOHJLVODWLRQWRLQFUHDVHSURWHFWLRQVIRUHOGHUO\
UHVLGHQWVLQWKHVHKRPHV³7KHODZGRHVQ¶WUHDOO\VD\7KHUH¶VQRREOLJDWLRQIRUWKHPWRGR
DQ\WKLQJLIWKH\IDOOLQWRILQDQFLDOGLVWUHVV´
7KLVPHDQVUHVLGHQWVWKHLUIDPLO\PHPEHUVDQGHYHQWKHVWDIISURYLGLQJFDUHPD\QRWILQGRXW
DERXWDSURSHUW\¶VILQDQFLDOWURXEOHVXQWLOWKH\VHHDQHYLFWLRQQRWLFHRUDVKHULIIDWWKHGRRU
$UPHGSROLFHRIILFHUVFRXOGIRUFLEO\UHPRYHUHVLGHQWVIURPWKHLUKRPHV³ZLWKRXWDQ\QRWLFH
ZLWKRXWSUHSDUDWLRQZLWKRXWDQ\DUUDQJHPHQWVIRUDQDOWHUQDWLYHUHVLGHQFH´0U&KLFRWHO
VDLG³1RWRQO\DUHWKH\ORVLQJWKHLUKRPHEXWWKH\DUHORVLQJWKHVHUYLFHVWKDWDOORZWKHPWR
OLYH´
7LSS\,UZLQH[HFXWLYHGLUHFWRURIWKH2PEXGVPDQ6HUYLFHVRI6DQ0DWHRVDLGWKLVWUHQGRI
RXVWLQJHOGHUO\UHVLGHQWVZLWKRXWZDUQLQJZDV³XQSUHFHGHQWHG´+HURIILFHKDVKDQGOHGHLJKW
IRUHFORVXUHVRIHOGHUFDUHKRPHVLQWKHODVWWZR\HDUVDQGIHZRZQHUVJDYHZDUQLQJWR
UHVLGHQWVRUWKHLUIDPLOLHV
0V,UZLQVDLGKHUVWDIIKDGWRVFUDPEOHWRILQGQHZSODFHVIRUWKHUHVLGHQWV
³,QRQHUHVLGHQFHZHJRWZLQGWKDWWKHVKHULIIKDGLVVXHGDWKUHHGD\QRWLFHWRPRYHSHRSOHLQ
WKHKRXVHDQGWKDWZDVD)ULGD\´VKHVDLG³:HKDGWRPRYHWKHPDOOLQRQHGD\,W¶VQRWWKH
ZD\LWVKRXOGKDSSHQ´
³(YHU\RQHRIWKHVHRZQHUVKDVEHHQLQGHQLDO´0V,UZLQFRQWLQXHG³7KH\WKHPVHOYHVDUH
JRLQJWKURXJKKHOO7KH\¶UHORVLQJWKHLUKRPHVDQGWKHLUEXVLQHVVHV1RWRQHRIWKHPKDV
DFNQRZOHGJHGZKDW¶VKDSSHQLQJ´
%UHQGD:LQJH[SHULHQFHGWKLVGHQLDOILUVWKDQGLQ)HEUXDU\ZKHQVKHZHQWWRYLVLWKHU\HDU
ROGIDWKHULQWKH1RUWKVWDU0DQRUFDUHKRPHLQ:RRGODQG:KHQVKHDUULYHG0V:LQJVDLG
WKHUHZHUHWKUHHSDSHUVVWDSOHGWRWKHGRRUWKDWVDLGWKHKRXVHZDVJRLQJWREHVROGDWDXFWLRQ
6KHFDOOHG6WHSKDQLH.KDQWKHDGPLQLVWUDWRUDQGZDVWROGWKDWLWZDVDPLVXQGHUVWDQGLQJWKDW
WKHRZQHUVZHUHUHILQDQFLQJ
7KHQRQ$SULOWKHVKHULIIVHUYHGDQHYLFWLRQQRWLFH0V:LQJVDLG6KHFDOOHGDJDLQDQG0V
.KDQDJDLQVDLGLWZDVDPLVXQGHUVWDQGLQJ
7KHQ0V:LQJVDLGWKHFRQYHUVDWLRQWXUQHGXJO\
³6KHZDVUHDOO\DQJU\DQGVDLGµ<RX¶UHDVNLQJPHDERXWSHUVRQDOILQDQFHV¶´0V:LQJVDLG³,
VDLGµ1R,¶PDVNLQJ\RXLIP\GDGLVJRLQJWREHSXWRXWRQWKHVWUHHW¶,WZDVVXFKDKLGHRXV
FRQYHUVDWLRQWKDW,KDGWRKDQJXS´
0V.KDQFRQILUPHGWKHFRQYHUVDWLRQDQGWKHSRVWLQJRIWKHHYLFWLRQQRWLFHEXWVDLGWKDWDORDQ
PRGLILFDWLRQZDVEHLQJQHJRWLDWHGDQGWKDWWKHEDQNKDGORVWWKHSDSHUZRUN
³,ZRXOGQ¶WWHOOKHUDERXWP\PRP¶VILQDQFLDOEXVLQHVVXQOHVVLWDIIHFWVWKHUHVLGHQWV´0V.KDQ
VDLG³DQGWKHORDQPRGLILFDWLRQDWWRUQH\VDLGWKDWLWZRQ¶WDIIHFWWKHUHVLGHQWV´
6KHUHIXVHGWRLGHQWLI\WKHORDQPRGLILFDWLRQODZ\HUEXWVDLGWKDWLIVKHDQGKHUPRWKHUKDG
EHHQWROGWRHYDFXDWHWKHSUHPLVHVVKHZRXOGKDYHWROGWKHUHVLGHQWVDQGWKHLUIDPLOLHV
³,ZRXOGWHOOWKHPWRILQGDOWHUQDWLYHKRXVLQJDQGJLYHWKHPHQRXJKWLPH´0V.KDQVDLG
5HFRUGVIURP'DWD4XLFNDILUPWKDWWUDFNVPLOOLRQSURSHUWLHVLQWKH8QLWHG6WDWHVVKRZWKDW
1RUWKVWDU0DQRUZDVIRUHFORVHGRQDQGLVQRZRZQHGE\:HOOV)DUJR%DQN.HYLQ:DHWNHD
:HOOV)DUJR+RPH0RUWJDJHVSRNHVPDQFRQILUPHGWKHEDQN¶VRZQHUVKLSEXWVDLGWKDWDVVRRQ
DVWKHEDQNOHDUQHGLWZDVDFDUHIDFLOLW\ZLWKHOGHUO\UHVLGHQWVLWGHOD\HGWKHHYLFWLRQ
³:HDUHZRUNLQJFORVHO\ZLWKWKHIDPLOLHVDQGKDYHDVVXUHGWKHPWKDWZHZLOOSURYLGHDOOWKHWLPH
WKH\QHHGWRUHORFDWHWKHUHVLGHQWVLQDSSURSULDWHKRXVLQJKRZHYHUORQJLWWDNHV´0U:DHWNH
VDLG
$OH[DQGUD0RUULVDJHURQWRORJLVWZRUNLQJZLWKWKH$O]KHLPHU¶V$VVRFLDWLRQRI1RUWKHUQ
&DOLIRUQLDVDLGWKDWPDQ\RFFXSDQWVRIWKHVHKRPHVKDGGHPHQWLDDQGWKDWDQDEUXSWFKDQJH
FRXOGFDXVHVHYHUHDQ[LHW\DQGGHFOLQHNQRZQDVWUDQVIHUWUDXPD
³3HRSOHZLWKGHPHQWLDIRFXVRQIDPLOLDUSHRSOHDQGIDPLOLDUDVSHFWVRIDQHQYLURQPHQW´0V
0RUULVVDLG³7KDW¶VWKHLUDQFKRUDQGWKH\FDQTXLWHOLWHUDOO\IHHODGULIWZKHQWKH\KDYHWRPRYH´
$JHQFLHVWKDWRYHUVHHWKHVHUHVLGHQWLDOFDUHIDFLOLWLHVIRUWKHHOGHUO\²ZKLFKW\SLFDOO\KRXVHXS
WRVL[SDWLHQWV²KDYHQRUHOLDEOHGDWDRQZKLFKKRPHVDUHWKUHDWHQHGZLWKIRUHFORVXUHRUKDYH
FORVHGEHFDXVHRILW
%XWD1HZ<RUN7LPHVDQDO\VLVRIOLFHQVLQJDQGIRUHFORVXUHGDWDLQGLFDWHGWKDWDERXWSHUFHQW
RIWKH%D\$UHDSURSHUWLHVOLFHQVHGDVVPDOOUHVLGHQWLDOFDUHKRPHVKDVEHHQLQVRPH
VWDJHRIIRUHFORVXUHVLQFH-XQH$FFRUGLQJWR5HDOW\7UDFDFRPSDQ\WKDWFRPSLOHV
IRUHFORVXUHUHFRUGVWKDWLQFOXGHVPRUHWKDQKRPHVXQGHUIRUHFORVXUHLQWKHODVWVL[PRQWKV
,WLVLPSRVVLEOHWRWHOOIURPWKHGDWDKRZPDQ\RIWKHVHZHUHRSHUDWLQJDVUHVLGHQWLDOFDUHKRPHV
GXULQJWKHIRUHFORVXUHSURFHHGLQJVRUWKHUHDIWHU%XWWKRVHSURSHUWLHVKRXVHGDVPDQ\DV
HOGHUO\UHVLGHQWV
7KHOPD7DQ¶VHOGHUFDUHKRPH$SULO*DUGHQLQ6DUDWRJDZDVDPRQJWKHSURSHUWLHVLQ
IRUHFORVXUHRQDOLVW5HDOW\7UDFXSGDWHG$SULO0V7DQVDLGVKHZRUNHGRXWDGHDOZLWKKHU
OHQGHURQ$SULODQGGHIHQGHGKHUGHFLVLRQWRNHHSVWDIIDQGUHVLGHQWVLQWKHGDUN
³7KHUH¶VQRQHHGWRDODUPWKHIDPLOLHV´VKHVDLG³2IFRXUVHLIVRPHWKLQJGUDVWLFZDVJRLQJWR
KDSSHQZH¶UHUHTXLUHGWRJLYHWKHPQRWLFH´
&KDUOHV6NRLHQ-UGLUHFWRURIWKH&RPPXQLW\5HVLGHQWLDO&DUH$VVRFLDWLRQRI&DOLIRUQLDVDLG
KHZDVXQDZDUHRIWKHVSDWHRIIRUHFORVXUHVDQGHYLFWLRQVLQHOGHUFDUHIDFLOLWLHV+HVDLGWKH
OLFHQVLQJDJHQF\VKRXOGEHLQWKRVHIDFLOLWLHVORQJEHIRUH³VRPHWKLQJOLNHWKDWLVJRLQJGRZQ´
$VNHGDERXWOHJLVODWLRQWKDWZRXOGWLJKWHQUHTXLUHPHQWV0U6NRLHQVDLG³,WKLQNZHKDYH
DGHTXDWHUHJXODWLRQVQRZ,GRQ¶WWKLQNZHQHHGPRUH´
6WDWH6HQDWRU0DUN/HQR'HPRFUDWRI6DQ)UDQFLVFRKDVLQWURGXFHGOHJLVODWLRQWKDWZRXOG
PDNHLWOHVVOLNHO\WKDWWKHHOGHUO\UHVLGHQWVLQWKHVHFDUHIDFLOLWLHVZRXOGKDYHQRZDUQLQJRID
SHQGLQJIRUHFORVXUH,WZRXOGUHTXLUHSHRSOHOLFHQVHGWRUXQVXFKIDFLOLWLHVWRQRWLI\WKHOLFHQVLQJ
GLYLVLRQRIWKH'HSDUWPHQWRI6RFLDO6HUYLFHVDQGWKHUHVLGHQWVRUWKHLUOHJDOUHSUHVHQWDWLYH
ZLWKLQKRXUVRIQRWLILFDWLRQRIIRUHFORVXUHEDQNUXSWF\PLVVLQJDPRUWJDJHSD\PHQWRUWKH
SURVSHFWRIDXWLOLW\FXWRII
7KHELOOZRXOGDOVRILQHRZQHUVZKRIDLOHGWRGRVRDGD\DQGSHUPDQHQWO\GLVTXDOLI\WKHP
IURPRSHUDWLQJHOGHUFDUHKRPHVLQ&DOLIRUQLD$YRWHRQWKHPHDVXUHLVQRWH[SHFWHGEHIRUH
-XQH
0V,UZLQWKH6DQ0DWHRRPEXGVPDQKRSHVLWZLOOSDVV
³:H¶YHKDGDWHUULEOHWLPHLQWKLVFRXQW\DQGZHNLFNHGXSDVWRUP´VKHVDLG³:HQHHGWKHVH
SURWHFWLRQVLQWKHODZ´

KWWSZZZQ\WLPHVFRPXVVIIRUHFORVHKWPO"BU  SDJHZDQWHG  UHI HOGHUFDUH