[go: up one dir, main page]

Academia.eduAcademia.edu
1  ,1( 5HWRXFKLQJWKH6RYHUHLJQ % LRFKHPLVWU\RI3HUSHWXDO/HQLQLVP $ / ( ; ( ,  < 8 5 &+ $ . 2 ULJLQDO$QG)DNH :  +$7.,1'2)$%2'<LVO\LQJLQ/HQLQ·V0DXVROHXPLQ0RVFRZ ϮJXUH  ",VLWWKHUHDOERG\RI/HQLQDZD[ϮJXULQHRUDQLPSRVWRU"5XPRUVDERXW LWVIDNHQDWXUHKDYHFLUFXODWHGIRURYHUQLQHW\\HDUV7KH\VWDUWHGHYHQEH IRUH/HQLQ·VGHDWKLQWKHHDUO\VZKHQKHIHOOVHULRXVO\LOODQGGLVDS SHDUHGIURPSXEOLFYLHZ2QHUXPRUFODLPHGWKDW/HQLQKDGDOUHDG\GLHG DQGDQLPSRVWHUSOD\HGKLVUROH ,QWKHϮUVWGD\VDIWHU/HQLQ·VGHDWKLQ -DQXDU\KLVERG\OD\LQVWDWHLQWKH+RXVHRIWKH8QLRQVLQ0RVFRZ ZKHUHHQRUPRXVFURZGVJDWKHUHGWRELGIDUHZHOOWRWKHOHDGHU)RUVRPH WKHH[SHULHQFHRIDQHQGOHVVOLQHVORZO\ϮOLQJSDVW/HQLQ·VERG\HYRNHGWKH FURZGVWKDWKDGJDWKHUHGDWWKH3DQRSWLFRQ0XVHXPLQ6W3HWHUVEXUJD IHZ\HDUVSUHYLRXVO\WRVHHDZD[Hϲ J\RIWKH(J\SWLDQTXHHQ&OHRSDWUDLQD JODVVVDUFRSKDJXV,QDUHHQDFWPHQWRI&OHRSDWUD·VGHDWKHYHU\IHZPLQ XWHVDVQDNHVOLWKHUHGRXWDQGELWKHUH[SRVHGEUHDVW3RHW$OH[DQGHU%ORN ZURWHDERXWEHLQJRQHRIWKHKDQNHULQJJDZNHUVZKR´KDVFRPHWRJOLPSVH WKHJUHDWSURϮOHWRVHHWKHZD[ZRUNVDGYHUWLVHGµ,Q-DQXDU\SD\LQJ UHVSHFWV WR /HQLQ SRHW 9HUD ,QEHU LPLWDWHG WKH UK\WKP DQG LPDJHU\ RI %ORN·V VWDQ]D LQ KHU SRHP ´)LYH 1LJKWV DQG 'D\Vµ ZULWLQJ WKDW VKH ´KDV FRPHWRJOLPSVHWKHSDOHSURϮOHWKHPHGDOUHGXSRQKLVFKHVWµ 7KHGLP KDOO /HQLQ·V OLWXS FRUSVH WKRXVDQGV RI H\HV Ϯ[DWHG RQ KLV SURϮOH³LW DOO UHPLQGHGKHURI&OHRSDWUD·VZD[PRGHO >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 ) ,*85(೏9  ODGLPLU/HQLQ·VHPEDOPHGERG\LQWKH0DXVROHXP 0RVFRZ3XEOLFGRPDLQ :  KHQ/HQLQ·VHPEDOPHGERG\ZDVSXEOLFO\GLVSOD\HGLQWKH0DXVROHXP LQODWHVXPPHU0RVFRZZDVDJDLQDZDVKZLWKUXPRUV7KH\GLGQRW GLVDSSHDUHYHQLQWKHVZKHQUHSHDWLQJWKHPFRXOGJHWRQHDUUHVWHG ,QWKHDWPRVSKHUHRIZLGHVSUHDGGHQXQFLDWLRQVD\RXQJZRPDQUHSRUWHG WRWKHVHFUHWSROLFHWKDWKHUDFTXDLQWDQFHVWKHVLVWHUDQGGDXJKWHURIWKH RQFH SRZHUIXO )HOL[ ']HU]KLQVN\ FODLPHG LQ D SULYDWH FRQYHUVDWLRQ WKDW ´WKHERG\O\LQJLQWKH0DXVROHXPLV¬¬¬DZD[GXPP\µ೓ 7KHVHVSHFXODWLRQV ZHUHUHJXODUO\UHSHDWHGLQ:HVWHUQQHZVSDSHUV7RGLVSHOWKHPLQWKHV WKH&RPPXQLVW3DUW\LQYLWHGDJURXSRI:HVWHUQQHZVPHQWRYLVLWWKH0DXVR OHXP$Q$PHULFDQMRXUQDOLVWUHPHPEHUHGWKDW%RULV=EDUVN\RQHRI/HQLQ·V WZR RULJLQDO HPEDOPHUV ´RSHQHG WKH KHUPHWLFDOO\ VHDOHG JODVV FDVH¬ ¬ ¬ ¬  WZHDNHG/HQLQ·VQRVHDQGWXUQHGKLVKHDGWRWKHULJKWDQGOHIWµGHPRQVWUDWLQJ WKDW´LWZDVQRWZD[,WZDV/HQLQµ 2  QHUHDVRQIRUWKHSHUVLVWHQFHRIWKHVHUXPRUVLVWKDWWKH\VHHPEHOLHY DEOH)RUVRPHWKHVPRRWKVDOORZVNLQRI/HQLQ·VERG\JORZLQJLQWKHOLJKW RIPLQLDWXUHODPSVEULQJVWRPLQGWKHZD[FHOHEULWLHVWKDWSRSXODWH0DGDPH 7XVVDXG·VDQGLWVPDQ\LPLWDWLRQV)RURWKHUVVXFKUXPRUVDUHFUHGLEOHEH FDXVHWKH\VHHPF\QLFDOO\UDWLRQDOZK\ERWKHUZLWKWKHFRPSOH[VFLHQFHRI PDLQWDLQLQJ/HQLQ·VERG\LIFUHDWLQJLWVSHUIHFWZD[UHSOLFDZRXOGGRWKH WULFN",QIDFWGUDZLQJDOLQHEHWZHHQUHDOERGLHVDQGDUWLϮFLDOPRGHOVLVQRW >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 DOZD\VHDV\0DQ\SUHVHUYHGERGLHVWKDWDUHZLGHO\DVVXPHGWREHUHDOFRQ WDLQDUWLϮFLDOSDUWV,QWHUQDOOLTXLGVLQWKHFHOOVRI(YD3HUyQ·VERG\KDYH EHHQVXEVWLWXWHGZLWKZD[SURPSWLQJWKHHPEDOPHUVWRQLFNQDPHKHU´D FDQGOHµ 'HVSLWH D SRSXODU DVVXPSWLRQ WKH ERG\ RI -HUHP\ %HQWKDP DW 8QLYHUVLW\&ROOHJH/RQGRQLVPRUHDUWLϮFLDOWKDQUHDO%HQWKDP·VVNHOHWRQ ZDVSDGGHGRXWZLWKVWUDZGUHVVHGLQKLVFORWKHVDQGVHDWHGRQDFKDLU$Q DWWHPSWWRSUHVHUYH%HQWKDP·VKHDGE\VXVSHQGLQJLWRYHUVXOIXULFDFLGDQG GUDZLQJRϸWKHϰXLGVZLWKDSXPSZHQWKRUULEO\ZURQJZKHQKLVIDFHVKULY HOHG EH\RQG UHFRJQLWLRQ ,QVWHDG D ZD[ UHSOLFD RI %HQWKDP·V KHDG ZDV DWWDFKHGWRKLVVNHOHWRQZKLOHWKHGLVϮJXUHGUHDOKHDGZDVSUHVHUYHGLQD VHSDUDWHER[ , QDIHZGD\VDIWHU0DR·VGHDWKDJURXSRI&KLQHVHPHGLFVZHUHXQ H[SHFWHGO\FKDUJHGZLWKWKHWDVNRISUHVHUYLQJWKHFKDLUPDQ·VERG\+DY LQJQRH[SHULHQFHLQWKHPDWWHUDQGXQDEOHWRWXUQIRUDGYLFHWRWKHPRUH H[SHULHQFHG6RYLHWVFLHQWLVWV 6LQR6RYLHWUHODWLRQVZHUHDWWKHLUZRUVW WKH &KLQHVHKDGWRH[SHULPHQW,WZDVVRXQFHUWDLQZKDWWKHUHVXOWVZRXOGEH UHPHPEHUV0DR·VSHUVRQDOSK\VLFLDQ/L=KLVXLWKDWDZD[FRS\RI0DR·VERG\ ZDVDOVRFUHDWHGDVDEDFNXS%HLMLQJ,QVWLWXWHRI$UWVDQG&UDIWVGLVSDWFKHG WZRVSHFLDOLVWVWR0DGDPH7XVVDXG·VLQ/RQGRQWROHDUQWKHQHZHVWPHWK RGVRIZD[PRGHOLQJ:LWKVXUSULVHDQGVDWLVIDFWLRQWKH\WHOHJUDSKHGEDFN ´WKDWLQWKLVWHFKQLTXHDWOHDVW&KLQDZDVDOUHDG\IDUPRUHDGYDQFHGWKDQ (QJODQGµ0DR·VZD[HQϮJXUHZDVFUHDWHGLQVHFUHF\DQGORRNHGUHPDUN DEO\OLIHOLNH2QO\DKDQGIXORIPHGLFVDUWLVWVDQGSDUW\OHDGHUVZHUHDZDUH RILWVH[LVWHQFH,QERWK0DRVHPEDOPHGDQGZD[HQZHUHWUDQVIHUUHG WRKLVPDXVROHXPRQ7LDQDQPHQ6TXDUH:KLFKRQHLVRQGLVSOD\DWDJLYHQ PRPHQWGHSHQGVRQZKHWKHU0DR·VERG\KDVWRXQGHUJRUHHPEDOPLQJ , QWKHVDIWHUWKH6RYLHWFROODSVHUXPRUVDERXW/HQLQ·VERG\EHLQJD IDNHLQWHQVLϮHG,O\D=EDUVN\VRQRIWKHRULJLQDOHPEDOPHUDQGKLPVHOID ORQJWLPHPHPEHURIWKHHPEDOPLQJWHDPIHOWLWQHFHVVDU\WRZULWHLQKLV PHPRLU´,ZRUNHGLQWKH0DXVROHXPIRUHLJKWHHQ\HDUVDQG,NQRZIRUDIDFW WKDW/HQLQ·VERG\LVLQDYHU\JRRGFRQGLWLRQ¬¬¬$OOVRUWVRIUXPRUVDQGIDE ULFDWLRQVDFFRUGLQJWRZKLFKWKLVLVQRW/HQLQ·VERG\EXWDQHϲ J\¬¬¬RUWKDW QRWKLQJ EXW /HQLQ·V IDFH DQG KDQGV KDYH EHHQ VXFFHVVIXOO\ SUHVHUYHG KDYHQRIRXQGDWLRQLQUHDOLW\µ +RZHYHUWKHPHGLDZDVPRUHUHDG\WR HPEUDFHVWRULHVDERXWIDNH/HQLQDQG=EDUVN\·VVWDWHPHQWZDVIRUJRWWHQ$W WKHVDPHWLPHZKDWKHVDLGLQDODWHULQWHUYLHZZDVPLVLQWHUSUHWHG=EDU VN\UHIHUUHGWRWKHERGLHVRI´/HQLQ·VGRXEOHVµ G YRLQLNL DVODQJWHUPWKH >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 ODE·VVFLHQWLVWVXVHGIRUERGLHVWKDWKDYHEHHQHPEDOPHGLQWKHODEXVLQJ WKHVDPHWHFKQLTXHDV/HQLQ·VERG\7KHVH´GRXEOHVµGRQRWORRNOLNH/HQLQ DQGDUHQRWSUHVHUYHGWREHGLVSOD\HG/DEVFLHQWLVWVXVHWKHPIRUH[SHUL PHQWDOZRUNRQLPSURYLQJSUHVHUYDWLRQWHFKQLTXHV+RZHYHUWKHDOOXVLRQ WR´GRXEOHVµPRUSKHGLQWRDPHGLDVWRU\DERXW´PXOWLSOH/HQLQVµZLWKWKH LPSOLFDWLRQWKDWZKRHYHULVGLVSOD\HGLQWKH0DXVROHXPLWLVQRWWKHUHDO WKLQJ,QLQDQDWWHPSWWRVWRSWKHUXPRU3URIHVVRU<XUL5RPDNRY WKHODE·VGHSXW\GLUHFWRUZHQWRQDSRSXODUUDGLRVKRZWRDVVXUHWKHSXEOLF WKDW/HQLQ·VERG\LVKLVRZQDQGUHTXLUHVQRVXEVWLWXWHV , QD'XPDGHSXW\9ODGLPLU0HGLQVN\³QRZ5XVVLD·VPLQLVWHURIFXO WXUH³DQQRXQFHGIURPWKH'XPDSRGLXPWKDW/HQLQ·VERG\ZDVQRWUHDOIRU DGLϸHUHQWUHDVRQ´'RQRWIRRO\RXUVHOYHVZLWKWKHLOOXVLRQWKDWZKDWLVO\ LQJLQWKH0DXVROHXPLV/HQLQ:KDW·VOHIWWKHUHLVRQO\SHUFHQWRIKLV ERG\µKHVDLGDOOXGLQJWRWKHIDFWWKDWPRVWRI/HQLQ·VLQWHUQDORUJDQVDQG OLTXLGVZHUHJRQH7KHUHVSHFWHGSROLWLFDOZHHNO\9ODVW· UHVSRQGHGZLWKLWV RZQKDOILURQLFFDOFXODWLRQWKDWFKDOOHQJHG0HGLQVN\·VϮJXUHZKDWLVO\LQJ LQWKH0DXVROHXPLWUHSRUWHGLVSHUFHQWRI/HQLQ·VERG\QRWSHUFHQW DVWKHGHSXW\VXJJHVWHG7KHPRVWUDGLFDOWKHRU\ZDVUHSRUWHGE\5XVVLDQ QHZVSDSHUVDQG79LQDSURIHVVLRQDOFULPLQDOLVWLQYHVWLJDWLRQDOOHJ HGO\HVWDEOLVKHGWKDWWKHERG\LQWKH0DXVROHXPLVQRW/HQLQ·V´VLPSO\EH FDXVHVXFKDSHUVRQKDGQHYHUH[LVWHGµ , QIDFWLIZHORRNHGDWWKHPDWHULDOFRPSRVLWLRQRI/HQLQ·VERG\PRUH FORVHO\ZHZRXOGVHHWKDWVRPHRIWKHVHUXPRUVDUHQRWDOWRJHWKHUXQ IRXQGHG 7KH WDVN RI WKH 0DXVROHXP ODE·V VFLHQWLVWV KDV DOZD\V EHHQ WR SUHVHUYHWKHG\QDPLFIRUPRI/HQLQ·VERG\³LWVVKDSHFRORUZHLJKWVXSSOHQHVV ϮUPQHVVϰH[LELOLW\DQGVRIRUWK(YHQWRGD\WKHERG\·VMRLQWVFDQVWLOOEHQG LWVWRUVRDQGQHFNFDQURWDWHLWVEDFNDQGWKLJKVUHPDLQϰH[LEOHLWVVNLQLV ϮUPDQGHODVWLFWKHKDLURQLWVFKHVWDQGKHDGLVDWWDFKHGWRWKHVNLQDQG DOORILWVERGLO\WH[WXUHVDUHVXSSOHϮUPDQGPRLVW+RZHYHUWRDFKLHYHWKLV UHPDUNDEOHIHDWWKHODEKDVEHHQJUDGXDOO\UHSODFLQJWKLVERG\·VFRQVWLWXWLYH ELRPDWWHU³LWVOLTXLGVIDWVIUDJPHQWVRIVNLQPXVFOHWLVVXHERQHVWUXFWXUH DQGVRRQ , QWKH6RYLHWWLPHVVSHFLDOFRPPLVVLRQVRISDUW\OHDGHUVDQGVFLHQWLVWV UHJXODUO\H[DPLQHGHYHU\LQFKRIWKLVERG\LQWKHQDNHGVWDWHFKHFNLQJ LWVDSSHDUDQFHVXSSOHQHVVYROXPHFRORUDQGZHLJKWDQGFRPSDULQJWKHP ZLWKWKHSUHYLRXVH[DPLQDWLRQV7RWKLVSROLWLFDOVFLHQWLϮFJD]HWKHERG\ DSSHDUHGDVϰH[LEOHFKDQJLQJLPSURYLQJ%XWWRUHJXODUYLVLWRUV/HQLQ·V >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 ERG\DOZD\VDSSHDUHGDVVWLϸϮ[HGSUHVHUYHGRQFHDQGIRUDOOLQDGLVWDQW SDVW7KH\VDZLWO\LQJLQWKHVDUFRSKDJXVGUHVVHGLQDGDUNVXLWZLWKRQO\ WKHKHDGDQGKDQGVH[SRVHG7KH\QHYHUKHDUGRIWKHFRQGLWLRQRIWKLVERG\ DVDZKROH7KHH[LVWHQFHRIWKHVHWZRGLVWLQFWUHJLPHVRIYLVLELOLW\³RQHIRU WKHJD]HRIWKHSROLWLFDOUHJLPHWKHRWKHUIRULWVFRPPRQFLWL]HQV³VXJJHVWV WKDWWKHSROLWLFDOUROHRI/HQLQ·VERG\KDVDOZD\VH[FHHGHGWKDWRIDVLPSOH SURSDJDQGDV\PEROGHVLJQHGWRERRVWSRSXODUVXSSRUWIRUWKH6RYLHWVWDWH 7KLVERG\DOVRSOD\HGDGLVWLQFWDQGSXEOLFO\LQYLVLEOHSROLWLFDOUROHWKDW ZDV LPSRUWDQW IRU WKH RUJDQL]DWLRQ DQG UHSURGXFWLRQ RI WKH UHJLPH 7R XQGHUVWDQGWKLVUROHZHPXVWϮUVWUHWXUQWRWKHSHULRGMXVWEHIRUH/HQLQ·V GHDWK /HQLQDQG/HQLQLVP , QVSULQJ/HQLQIHOWLOODQGH[KDXVWHGDQGOHIW0RVFRZIRUWKHFRXQWU\ HVWDWHRI*RUNL+HUHVWHGXQGHUWKHVXSHUYLVLRQRIGRFWRUVEXWFRQWLQXHGWR OHDGWKHSDUW\DQGPDNHRFFDVLRQDODSSHDUDQFHVLQ0RVFRZ%XWLQ0D\ KHKDGDVWURNHDQGWHPSRUDULO\ORVWDELOLW\WRVSHDNUHDGDQGZULWH ,Q UHVSRQVHWKHSDUW\OHDGHUVKLSLQWURGXFHGVWULFWHUUXOHVLVRODWLQJ/HQLQIURP WKHSROLWLFDOOLIH:KLOHQHZUXOHVUHϰHFWHGDUHDOFRQFHUQIRU/HQLQ·VKHDOWK WKH\ZHUHDOVRDQDWWHPSWWRQHXWUDOL]HDSRZHUIXOSROLWLFDOULYDO,Q-XQH DVHFUHWDU\RIWKH&HQWUDO&RPPLWWHHFRPSODLQHGLQDOHWWHUWRDIULHQG WKDW']HU]KLQVN\DQG6PLGRYLFK KDGLVRODWHG/HQLQDQG´JXDUGKLPOLNH WZREXOOGRJV>QRWOHWWLQJ@¬¬¬DQ\RQHFRPHFORVHWRKLPRUHYHQLQWRWKHEXLOG LQJZKHUHKHLVVWD\LQJµ , QWKHQH[W\HDUDQGDKDOI/HQLQ·VFRQGLWLRQZRUVHQHGWKHQLPSURYHG WKHQZRUVHQHGDJDLQ+LVLPSRVHGLVRODWLRQEHFDPHVWULFWHU+HZDVQRW DOORZHGWRUHDGQHZVSDSHUVZULWHHVVD\VRULQWHUDFWZLWKLPSRUWDQWSR OLWLFDOϮJXUHV/HQLQH[SHULHQFHGKLVVLWXDWLRQDVLPSULVRQPHQWVD\LQJWR DIULHQG´,KDYHQ·WGLHG\HWEXWXQGHU6WDOLQ·VVXSHUYLVLRQWKH\DUHDOUHDG\ WU\LQJWREXU\PHµ,QVSULQJKHKDGDWKLUGVWURNHDQGDOPRVWFRP SOHWHO\ORVWWKHDELOLW\WRFRPPXQLFDWHPHDQZKLOHWKHSROLWLFDOULYDOU\LQ WKHOHDGHUVKLSLQWHQVLϮHG /HQLQKDGQRWGLVDSSHDUHGIURPWKHSXEOLFYLHZKRZHYHUKLVSUHVHQFH LQIDFWLQWHQVLϮHGEXWLQDQHZIRUP:KLOHWKHOLYLQJDQGDLOLQJ/HQLQZDV LVRODWHGLQWKH*RUNLHVWDWHDQHZO\FRQVWUXFWHGFDQRQL]HGLPDJHRI/HQLQ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 VWDUWHGWRGRPLQDWHWKHSROLWLFDOGLVFRXUVH0RVWRIWKHIDPLOLDUP\WKROR JL]HGLPDJHVDQGLQVWLWXWLRQVDURXQG/HQLQ·VFXOWWKDWEHFDPHZHOONQRZQ WKURXJKRXWWKH6RYLHWKLVWRU\ZHUHFUHDWHGLQWKRVHϮQDOPRQWKVRIKLVOLIH DQGLQVSLWHRIKLVDFWLYHSURWHVWDWLRQV,QHDUO\WKHWHUP´/HQLQLVPµ ZDVLQWURGXFHGLQWRSXEOLFFLUFXODWLRQDQGHYHU\SDUW\PHPEHUKDGWR SOHGJHDOOHJLDQFHWRLW 2Q0DUFKWKH/HQLQ,QVWLWXWHZDVHVWDE OLVKHGLQ0RVFRZDQGWKHQHZVSDSHU3UDYGDDSSHDOHGWRLWVUHDGHUVWRVHQG ´HYHU\VFUDSRISDSHUEHDULQJDQLQVFULSWLRQRUPDUNPDGHE\/HQLQµWRWKH LQVWLWXWH $  WWKHVDPHWLPHPXFKRIZKDW/HQLQZDVVD\LQJDQGZULWLQJDIWHUWKH DXWXPQRIZDVDFWLYHO\EDQLVKHGIURPWKLVFDQRQL]HGLPDJH /HQLQ ZDVQRWDOORZHGWRFKDQJHKLVHDUOLHUSRVLWLRQVRUSURWHVWDJDLQVWPLVLQWHU SUHWDWLRQVRIKLVHDUOLHUVWDWHPHQWV,WZDVQRZWKH3ROLWEXURWKDWFRQWUROOHG ZKDW/HQLQZDV´UHDOO\µVD\LQJQRW/HQLQKLPVHOI/HQLQWKHSROLWLFDOϮJXUH ZDVGRXEOHG³LQWRRQH/HQLQZKRZDVEDQLVKHGIURPWKHSROLWLFDOZRUOGDQG DQRWKHU /HQLQ ZKR ZDV FDQRQL]HG ZLWKLQ LW ,Q WKHVH WZR VLPXOWDQHRXV SURFHVVHVLQWKHHDUO\VWKHϮJXUHRI´/HQLQLVPµZDVSURGXFHGZKLFK XQWLOWKHHQGRI6RYLHWKLVWRU\VHUYHGDVWKHFHQWUDOIRXQGDWLRQDODQGXQ TXHVWLRQDEOHWUXWKRIWKH6RYLHWSROLW\,QSUDFWLFH/HQLQLVPZDVQRWDVWDWLF GRFWULQHWKDWZDVIRUPXODWHGRQFHDQGIRUDOODQGODWHUVLPSO\UHSHDWHGLW ZDVFRQWLQXDOO\FKDQJHGUHLQWHUSUHWHGDQGUHLQYHQWHG ( YHU\6RYLHWOHDGHUIURP6WDOLQWR*RUEDFKHYSURGXFHGKLVRZQYHUVLRQ RI/HQLQLVPVXSSUHVVLQJUHLQWHUSUHWLQJRUUHLQWURGXFLQJGLϸHUHQWDVSHFWV RI´/HQLQ·VOHJDF\µ,QOHVVWKDQWZR\HDUVEHIRUHWKH6RYLHWVWDWHFRO ODSVHGWKH&RPPXQLVW3DUW\ϮQDOO\DGPLWWHGWKDWHYHU\VLQJOHYHUVLRQRI /HQLQLVPLQYROYHGGLVWRUWLRQVRI/HQLQ·VZRUNV,QKLVVSHHFKRQWKHRFFD VLRQRI/HQLQ·VWKDQQLYHUVDU\LQ$SULO*RUEDFKHYVDLGVRPHWKLQJ XQSUHFHGHQWHG6WDUWLQJZLWKWKHXVXDO´/HQLQVWLOOUHPDLQVZLWKXVDVWKH JUHDWHVWWKLQNHURIWKHWZHQWLHWKFHQWXU\µ*RUEDFKHYTXLFNO\DGGHG´:H PXVWUHWKLQN/HQLQDQGKLVWKHRUHWLFDODQGSROLWLFDOZRUNDQGZHPXVWULG RXUVHOYHVRIWKHGLVWRUWLRQVDQGFDQRQL]DWLRQVRIKLVFRQFOXVLRQV¬¬¬,WLV WLPHWRHQGWKHWKRXJKWOHVVDQGDEVXUGPDQLSXODWLRQRI/HQLQ·VQDPHDQG LPDJHWKDWWXUQVKLPLQWRDQ¶LFRQ·೒µ0RUHRYHUVDLG*RUEDFKHYWLPHKDV FRPHWRDEDQGRQWKHFRQFHSWRI´/HQLQLVPµDOWRJHWKHUEHFDXVHLWUHGXFHV /HQLQ·VFRPSOH[WKRXJKWWRDFROOHFWLRQRIFDQRQLFDOVWDWHPHQWV :  ULWLQJLQDFHQWUDOGDLO\DSKLORVRSK\SURIHVVRUODPHQWHG´2XUWUDJHG\ LVWKDWZHGRQRWNQRZ/HQLQ:HQHYHUUHDGKLVRULJLQDOWH[WVLQWKHSDVW >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 DQG ZH VWLOO GR QRW GR WKLV WRGD\ )RU GHFDGHV ZH KDYH SHUFHLYHG /HQLQ WKURXJKPHGLDWRUVLQWHUSUHWHUVSRSXODUL]HUVDQGRWKHUGLVWRUWHUVµ$KLV WRULDQZURWHLQDZLGHO\FLUFXODWLQJGDLO\WKDW.KUXVKFKHYDQG%UH]KQHY ´ZHUHREYLRXVO\QRW/HQLQLVWVµIRUWKHP/HQLQZDVRQO\´DQLFRQµEHKLQG ZKLFKWKH\FRXOGKLGH$QRWKHUKLVWRULDQFRPSODLQHGWKDWHYHQWKH,QVWL WXWHRI0DU[LVP/HQLQLVPWKHFRXQWU\·VOHDGLQJDXWKRULW\RQ/HQLQ·VWKHR UHWLFDOOHJDF\´IRUVHYHQW\\HDUVVLQFHLWVIRXQGDWLRQKDVEHHQIXOϮOOLQJDQ DEVXUGIXQFWLRQ¬¬¬OHJLWLPDWLQJIRUSXEOLFDWLRQ>/HQLQ·V@WH[WVWKDWPDWFKHG WKHFDQRQRIWKHGD\KRZHYHUGLϸHUHQWIURPUHDO/HQLQ·VZRUGVWKH\ZHUH DQGDOWHULQJRUPRGLI\LQJ>/HQLQ·V@WH[WVWKDWGLGQRWϮWWKDWFDQRQµ $ IRUPHUVSHHFKZULWHUWRWKHSDUW\OHDGHUVKLSPDGHDQDVWRQLVKLQJUHYHODWLRQ 0LNKDLO6XVORYWKHSRZHUIXOFKLHIRILGHRORJ\LQWKH3ROLWEXURIRU\HDUVKDG EHHQVNLOOIXOO\PDQLSXODWLQJ/HQLQ·VLGHDVE\GUDZLQJRQDYDVWFROOHFWLRQ RILVRODWHGTXRWHVSOXFNHGRXWRI/HQLQ·VYROXPLQRXVZULWLQJV8VLQJWKHVH TXRWHVRXWRIFRQWH[W6XVORYDVVLJQHGWKHPZLWKUDQGRPPHDQLQJVQHFHV VDU\WROHJLWLPDWHGLϸHUHQWSROLWLFDOFDPSDLJQVRUVSHHFKHVRIWKH6RYLHWJRY HUQPHQWLQFOXGLQJGLDPHWULFDOO\RSSRVLQJRQHV )RUPDQG&RQWHQW :  KHQ/HQLQGLHGRQ-DQXDU\QRSODQVWRSUHVHUYHKLVERG\H[LVWHG 3URIHVVRU$EULNRVRYFRQGXFWHGDQDXWRSV\DQGSHUIRUPHGVKRUWWHUPHP EDOPLQJWKDWZRXOGDOORZ/HQLQ·VERG\WREHGLVSOD\HGLQDQRSHQFRϲ QIRU WKHϮYHGD\VRIWKHSXEOLFIDUHZHOO7KHLQFLVLRQVWKDW$EULNRVRYPDGHLQWKH ERG\FXWDFURVVLWVPDMRUDUWHULHVDQGEORRGYHVVHOV/DWHUKHUHPDUNHGWKDW KDGWKHSODQVWRSUHVHUYH/HQLQ·VERG\IRUSRVWHULW\H[LVWHGDWWKHWLPHRI WKHDXWRSV\KHZRXOGQRWKDYHFXWWKHVHDUWHULHVDQGEORRGYHVVHOVEHFDXVH LQORQJWHUPSUHVHUYDWLRQWKH\DUHXVHGWRGHOLYHUHPEDOPLQJOLTXLGVWRDOO FRUQHUVRIWKHERG\ ) URP-DQXDU\/HQLQ·VERG\OD\LQVWDWHLQWKH+RXVHRIWKH7UDGH8QLRQV LQ0RVFRZZLWKKXJHFURZGVRISHRSOHIURPDOORYHUWKHFRXQWU\ZDLWLQJLQDQ HQRUPRXVOLQHLQH[WUHPHO\FROGWHPSHUDWXUHVWRELGIDUHZHOOWRWKHOHDGHU ,WZDVDQQRXQFHGWKDW/HQLQZRXOGEHEXULHGRQ-DQXDU\LQDQHZO\EXLOW PDXVROHXPRQWKH5HG6TXDUHQHDUWKHH[LVWLQJWRPEVRIIDOOHQUHYROXWLRQ DULHV+RZHYHUWKHFURZGVFRPLQJWRVHHWKHERG\KDGQRWJURZQDQ\VPDOOHU $WWKHVDPHWLPHWKHERG\VKRZHGQRVLJQVRIGHWHULRUDWLRQGXHWRWKHH[ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 WUHPHO\FROGWHPSHUDWXUHVWKDWZLQWHUDQGSUREOHPVZLWKKHDWLQJLQDZDU GHYDVWDWHGFRXQWU\ HYHQLQVLGHWKH+RXVHRIWKH8QLRQVWHPSHUDWXUHQHYHU URVHPXFKDERYHWKHIUHH]LQJSRLQW )RUWKHVHGLϸHUHQWUHDVRQVWKHRϲ FLDO EXULDORIWKHERG\LQDWHPSRUDU\ZRRGHQPDXVROHXPLQIDFWDPRXQWHGWR SODFLQJLWLQDQRSHQVDUFRSKDJXVLQRUGHUWRH[WHQGWKHSXEOLFIDUHZHOO7KH IXQHUDOWKDWVWDUWHGRQ-DQXDU\ZDVQRW\HWFRPSOHWHGWKHLQWHUUHJQXP ZDVH[WHQGHGLQWRWKHLQGHϮQLWHIXWXUH7KHERG\ZDVGLVSOD\HGIRUDQRWKHU WZRPRQWKVXQWLOODWH0DUFKZKHQZDUPHUVSULQJZHDWKHUϮQDOO\DUULYHG DQGWKHϮUVWWKUHDWHQLQJVLJQVRIGHFRPSRVLWLRQZHUHGLVFRYHUHG 7  KHH[WHQGHGSHULRGGXULQJZKLFKWKHERG\UHPDLQHGLQDQRSHQVDU FRSKDJXVDOORZHGWKHSDUW\OHDGHUVKLSDQGVFLHQWLVWVWRGLVFXVVLWDWHQG OHVVPHHWLQJVDJDLQDQGDJDLQ,WZDVWKHQWKDWWKHLGHDWKDWWKHERG\VKRXOG EHSUHVHUYHGDQGGLVSOD\HGIRUSRVWHULW\JUDGXDOO\ZRQ$WϮUVWPDQ\SDUW\ OHDGHUVFRQVLGHUHGWKLVLGHDFRXQWHUUHYROXWLRQDU\7URWVN\%XNKDULQDQG 9RURVKLORYDUJXHGWKDWSUHVHUYLQJ/HQLQ·VERG\ZRXOGEHDNLQWRFUHDWLQJD UHOLJLRXVUHOLF³DQDFWWKDWYLRODWHG0DU[LVW/HQLQLVWSULQFLSOHV %RQFK %UXHYLFKVWUHVVHGWKDWZKLOHLWZDVLPSRUWDQWWRFUHDWHDSXEOLFPHPRULDO IRU/HQLQKLVERG\VKRXOGEHEXULHGLQDFORVHGWRPE%XWIRUPDQ\RWKHUV LWVHHPHGLPSRUWDQWWRFRQWLQXHGLVSOD\LQJ/HQLQ·VERG\IRUVRPHWLPHSR WHQWLDOO\IRUDQLQGHϮQLWHIXWXUHDOORZLQJPRUHSHRSOHIURPDOORYHUWKH ZRUOGWRSD\WKHLUUHVSHFWVWRWKHOHDGHU &  RQFOXGLQJDQLPSRUWDQWPHHWLQJRIWKHOHDGHUVKLSRQ0DUFK$YHO (QXNLG]HDPHPEHURIWKH&HQWUDO([HFXWLYH&RPPLWWHHVDLGWKDWWKHERG\ VKRXOGEHSUHVHUYHGDQGGLVSOD\HGEXW´ZLWKRXWSURPLVLQJWRDQ\RQHWKDW WKLVLVGRQHIRUSRVWHULW\µ,ILWGLGQRWKROGXSDIWHUDSHULRGRIWLPH´ZH ZLOOKDYHWRHQFORVHLWµ೓,QODWH0DUFKLWZDVGHFLGHGWRWU\DQH[SHULPHQWDO HPEDOPLQJSURFHGXUHSURSRVHGE\SURIHVVRURIPHGLFLQH9ODGLPLU9RURE·HY DQGELRFKHPLVW%RULV=EDUVN\1HLWKHUZDVFHUWDLQLIWKHH[SHULPHQWZRXOG VXFFHHG 9RURE·HYDQG=EDUVN\ZRUNHGIRUIRXUPRQWKVDQGLQODWH-XO\ UHSRUWHGWRWKHOHDGHUVKLSWKDWLI/HQLQ·VERG\ZDVUHJXODUO\WUHDWHGDQG UHHPEDOPHGDFFRUGLQJWRWKHPHWKRGWKH\GHYHORSHGLWFRXOGEHSUHVHUYHG IRUTXLWHDORQJWLPH7KH\GLGQRWVSHFLI\IRUKRZORQJ )ROORZLQJWKHLU VXFFHVVRQ-XO\WKH´&RPPLVVLRQIRUWKH,PPRUWDOL]DWLRQRI/HQLQ·V 0HPRU\µLVVXHGDSXEOLFVWDWHPHQW  HGLGQRWZDQWWRWXUQWKHERG\RI9ODGLPLU,O·LFKLQWRVRPHNLQGRI´UHOLFµ : E\PHDQVRIZKLFKZHFRXOGSRSXODUL]HDQGSUHVHUYHKLVPHPRU\+HKDG >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 DOUHDG\LPPRUWDOL]HGKLPVHOIHQRXJKZLWKKLVEULOOLDQWWHDFKLQJDQGUHYR OXWLRQDU\DFWLYLWLHV¬¬¬:HZDQWHGWRSUHVHUYHWKHERG\RI9ODGLPLU,O·LFK¬¬¬ >EHFDXVH@LWLVRIJUHDWLPSRUWDQFHWRSUHVHUYHWKHϮ]LFKHVNLLREOLN >SK\VLFDO ORRNVKDSHIRUP@RIWKLVUHPDUNDEOHOHDGHUIRUWKHQH[WJHQHUDWLRQDQGDOO WKHIXWXUHJHQHUDWLRQV 7  KHORQJGHEDWHVDERXW/HQLQ·VERG\DPRQJWKHSDUW\OHDGHUVKLSLQVSULQJ DVZHOODVWKHUHWURVSHFWLYHVWDWHPHQWDERXWLWVSUHVHUYDWLRQLQ-XO\ VXJJHVWWKDWWKHSDUW\OHDGHUVKLSLQFUHDVLQJO\VDZWKLVERG\LQWZRGLVWLQFW ZD\V7KLVGXDOLW\LVUHPLQLVFHQWRIKRZWKH\KDGWUHDWHG/HQLQLQWKHϮQDO PRQWKV RI KLV OLIH ZKHQ WKH ϰHVKDQGEORRG /HQLQ ZDV EDQLVKHG IURP SROLWLFDOOLIHZKLOHWKHQHZO\FRQVWUXFWHG´/HQLQLVPµZDVFDQRQL]HGZLWKLQLW 1RZ/HQLQ·VERG\ZDVWUHDWHGLQWKLVGXDOZD\³LWZDVRϲ FLDOO\´EXULHGµEXW FRQWLQXHGWREHRQGLVSOD\LWZDVSUHVHUYHGIRUDQLQGHϮQLWHIXWXUHEXW QRWWKHSDUW\FODLPHGWRLPPRUWDOL]HDQ\FRQFUHWHLQGLYLGXDOLWZDVWKH ELRORJLFDO FRUSVH RI D SHUVRQ EXW DOVR D SK\VLFDO IRUP WKDW WUDQVFHQGHG LQGLYLGXDOELRORJ\7KHERG\LQRWKHUZRUGVZDVERWKWKHFRUSVHRI´/HQLQµ DQGWKHHPERGLPHQWRIVRPHWKLQJWKDWZDVGLϸHUHQWIURP/HQLQDQGELJJHU WKDQKLP 7  KLVZD\RIWKLQNLQJDERXW/HQLQ·VERG\LQLVVWULNLQJO\VLPLODUWR KRZWKHVFLHQWLVWVDWWKH0DXVROHXPODEKDYHYLHZHGWKHJRDOVRIWKHLUZRUN VLQFH$FDGHPLFLDQ9DOHULL%\NRYWKHGLUHFWRURI9,/$5,QVWLWXWHXQGHU ZKRVHDXVSLFHVWKHODERSHUDWHVWRGD\GHVFULEHVWKLVWDVNDVWKHSUHVHUYD WLRQRI/HQLQ·V´DQDWRPLFDOLPDJHµ DQDWRPLFKHVNLLREUD] 7KLVVXJJHVWVWKDW PDLQWDLQLQJWKHERG\·VIRUPLVRIJUHDWHUVLJQLϮFDQFHWKDQSUHVHUYLQJLWV RULJLQDOELRPDWWHU$FDGHPLFLDQ<XULL/RSXNKLQIRUVHYHUDOGHFDGHVDOHDG LQJVFLHQWLVWDWWKHODESUHIHUVWRGHVFULEH/HQLQ·VERG\DV´OLYHVFXOSWXUHµ ] KLYDLDVNXO·SWXUD /RSXNKLQ·VSKUDVHLVDQDWWHPSWWRFDSWXUHDPELJXLWLHV WKDWVXFKWHUPVDV´FRUSVHµ´PXPP\µRU´UHOLFµGRQRWUHϰHFW$IWHUGH FDGHVRIEHLQJUHHPEDOPHGDQGUHVFXOSWHGWKHERG\KDVFKDQJHGVRFRQ VLGHUDEO\IURPLWVRULJLQDOELRORJLFDOFRPSRVLWLRQ/RSXNKLQDUJXHVWKDWLQ VRPHZD\LWLVFORVHUWRDUHSUHVHQWDWLRQRI/HQLQ·VERG\WKDQWKDWERG\LWVHOI $WWKHVDPHWLPH/RSXNKLQVWUHVVHVWKLVLVQRWDQH[WHUQDOUHSUHVHQWDWLRQ DVLQVFXOSWXUHRUSDLQWLQJEHFDXVHWKLVLVXQGHQLDEO\WKHDFWXDOERG\LWVHOI ´/LYHVFXOSWXUHµWULHVWRFDSWXUHWKLVDPELJXLW\³UHIHUULQJWRDERG\WKDW ERWKLV DQGLVQRW DUHSUHVHQWDWLRQDVLIWRVD\WKDWWKLVLVDVFXOSWXUHRIWKH ERG\WKDWLVEHLQJFRQVWUXFWHGRXWRIWKHERG\LWVHOI7KHWHUP´VFXOSWXUHµKRZ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 HYHUGRHVQRWIXOO\VDWLVI\/RSXNKLQHLWKHUVLQFHLWWHQGVWRVXJJHVWDVWLϸ DQGKDUGERG\ZKLOH/HQLQ·VERG\LVPDLQWDLQHGWREHϰH[LEOHDQGVXSSOH $UWDQG%LRORJ\ 7  R NHHS WKLV ERG\·V PDWHULDO IRUP DQG G\QDPLF SURSHUWLHV H[SODLQV /RSXNKLQ´RQHPXVWQRWRQO\NQRZWKHEDVLFVRIDQDWRP\SK\VLFDOFKHP LVWU\DQGKRZWRPDLQWDLQWKHZDWHUEDODQFH¬¬¬2QHPXVWDOVRSRVVHVVDQ DUWLVWLFVHQVH¬¬¬7KLVLVZK\QRWHYHU\RQHLVFDSDEOHRIGRLQJWKLVZRUNµ 3URIHVVRU9ODGLVODY.R]HO·WVHYDQRWKHUYHWHUDQVFLHQWLVWRIWKHODEPDNHVD VLPLODUSRLQWGXULQJPDMRUUHHPEDOPLQJDQGUHFRQVWUXFWLQJSURFHGXUHV ´HYHU\QHZZULQNOHFDYLW\RUSURWUXVLRQ>LQ/HQLQ·VERG\@PXVWEHϮ[HG:H DUHWDONLQJDERXWWLQ\GLPHQVLRQV6RPHDPRXQWRIDUWLϮFLDOVXEVWLWXWHVKDV WREHLQWURGXFHGZKLFKLVTXLWHGLϲ FXOW2QHQHHGVH[SHULHQFHDQGDUWLVWLF  VHQVHWRSHUIRUPWKLVZRUNµ  '  XULQJWKH6RYLHWSHULRGSDUW\FRPPLVVLRQVUHJXODUO\H[DPLQHGWKHERG\ DQGLVVXHGGHWDLOHGUHSRUWVRQLWVFRQGLWLRQ2Q-DQXDU\D´&RP PLVVLRQRIWKH3HRSOH·V&RPPLVVDULDWRI+HDOWKIRUWKH([DPLQDWLRQRI/HQ LQ·V %RG\µ UHSRUWHG WKDW /HQLQ·V QRVH ZKLFK ORVW LWV RULJLQDO IRUP ZKHQ /HQLQ·VFRUSVHZDVH[SRVHGWRH[WUHPHFROGDIWHUGHDWKϮQDOO\KDGEHHQ UHEXLOWDQGZDV´LQDYHU\JRRGFRQGLWLRQµ7KHUHSRUWDOVRZURWHDSSURY LQJO\WKDWWKH´HODVWLFLW\RIWKHH\HOLGVµKDGEHHQSUHVHUYHGDQGWKHIDFH ´PDNHVDFRPSOHWHLPSUHVVLRQRIDVOHHSLQJSHUVRQUDWKHUWKDQDFRUSVHµ $FHQWUDOFULWHULRQIRUPDLQWDLQLQJ/HQLQ·VERG\WKDWLVXQGHUVFRUHGLQWKHVH UHSRUWVZDVWRDYRLGDQDSSHDUDQFHRIDVWLϸFRUSVHZKLFKLQYRNHVDJDLQ /RSXNKLQ·VSKUDVH´OLYHVFXOSWXUHµ%XWWKHUHZHUHDOVRVRPHSUREOHPVWKDW QHHGHGDWWHQWLRQ3URIHVVRU1LNRODL%XUGHQNRIRXQGQHZVSRWV´RQWKHRXWHU VLGHRIWKHOHIWIRUHDUPµDQG´LQWKHORZHUSDUWRIWKHERG\HVSHFLDOO\LQWKH SHOYLFDUHDµ$OH[HL%XVDORYGLUHFWRURIWKHPHGLFDODGPLQLVWUDWLRQRIWKH .UHPOLQUHPDUNHGWKDW´RQWKHVROHVDQGWRHVWKHUHDUHVRPHVLJQVRIPXP PLϮFDWLRQ,QWKHSHOYLFDUHDWKHUHDUHKLQWVRIZULQNOLQJDQGWKLQQLQJ>RI WKHVNLQ@µ7KHODEVFLHQWLVWVKDGWRVROYHWKHVHSUREOHPV 2  QHUHDVRQIRUWKHGHYHORSPHQWRIQHZZULQNOHVFDYLWLHVDQGVSRWVRQ WKHERG\LVK\GURO\VLV³WKHSURFHVVLQZKLFKLQWHUQDOVROLGIDWVLQVNLQDQG RWKHUWLVVXHVOLTXHI\DQGPRYHDZD\IURPWKHLUDUHDV$QH[DPLQDWLRQFRP PLVVLRQWKUHH\HDUVODWHUIRXQGWKDWWKHZULQNOHVVSRWVDQGGHSUHVVLRQV >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 GHVFULEHGHDUOLHUKDGEHHQHOLPLQDWHGVXFFHVVIXOO\$QLPSRUWDQWEUHDN WKURXJK ZDV WKH GHYHORSPHQW RI DQ DUWLϮFLDO PDWHULDO WKDW VROYHG WKH SUREOHPRIK\GURO\VLV7KHPDWHULDOKDGVLPLODUSK\VLFDOFKDUDFWHULVWLFV WRVXEFXWDQHRXVIDWV WKHVDPHFRQVLVWHQF\VRIWQHVVDQGϮUPQHVV EXW XQOLNHWKHPLWZDVFKHPLFDOO\QHXWUDODQGFRXOGQRWOLTXHI\LQQRUPDOWHP SHUDWXUHV,Q1RYHPEHU=EDUVN\H[SODLQHGWRWKHSDUW\OHDGHUVKLS $  IWHUPDQ\H[SHULPHQWVZHGHYHORSHGDPL[RISDUDϲ QJO\FHULQDQGFDUR WHQHZLWKWKHPHOWLQJSRLQWRIGHJUHHV&HOVLXV7KLVPL[LQOLTXHϮHGIRUP FDQEHLQMHFWHGXQGHUWKHVNLQZKHUHLWTXLFNO\KDUGHQVLQWRDVROLGPDVVWKDW FDQEHHDVLO\VKDSHG$IWHUH[SHULPHQWVLQWKHODELWEHFDPHSRVVLEOHWRVXE VWLWXWHK\GURO\]HGIDWVZLWKWKLVQHZPDVV)URPWKHFKHPLFDOSRLQWRIYLHZ WKLVPDVVLVLQHUWDQGFDQEHSUHVHUYHGZLWKRXWFKDQJH¬¬¬7ZR\HDUVRIH[ SHULPHQWVLQWKLVDUHDSURGXFHGVXFKJRRGUHVXOWVWKDWWKH\FRXOGEHDSSOLHG WRϮ[LQJGHIHFWVLQ/HQLQ·VERG\ 7  KHPDWHULDOZDVDSSOLHGE\PLFURLQMHFWLRQVWRYDULRXVSDUWVRIWKHERG\ ZKHUH´GHSUHVVLRQRUFKDQJHRIYROXPHµZDVIRXQGVXEVWLWXWLQJ´IRUWKH IDWW\PDWHULDOVWKDWXQGHUZHQWK\GURO\VLVµ*HRUJLL0LWHUHY3HRSOH·VFRP PLVVDURIKHDOWKDVNHG=EDUVN\´6R\RXLQVHUWDUWLϮFLDOPDVV¬¬¬'RHVWKLV PHDQWKDWDIWHUDSHULRGRIWLPHDOOIDWV>LQWKHERG\@ZLOOEHUHSODFHGZLWK WKLVQHZDUWLϮFLDOPDVV"µ=EDUVN\UHSOLHGSRVLWLYHO\DQG0LWHUHYDQGRWKHU GLJQLWDULHVVHHPHGVDWLVϮHG7KHFRPPLVVLRQDOVRVWUHVVHGWKDWWKHHODVWLF LW\DQGSUHVVXUHVRIWKHVNLQDQGDOOWLVVXHVDQGWKHϰH[LELOLW\RIDOOVPDOO DQG ODUJH MRLQWV KDG EHHQ SHUIHFWO\ PDLQWDLQHG DQG LQ VRPH FDVHV LP SURYHG )URPWKHFRPPLVVLRQ·VSRLQWRIYLHZVXEVWLWXWLQJRULJLQDOELR PDWWHUZLWKDUWLϮFLDOPDWHULDOVZDVQRWDSUREOHPDVORQJDVLWKHOSHGWR PDLQWDLQWKHG\QDPLFIRUPRIWKHERG\³WKHVKDSHYROXPHDQGHODVWLFLW\ RILWVWLVVXHVWKHVPRRWKQHVVDQGϮUPQHVVRILWVVNLQDQGWKHϰH[LELOLW\RI LWVMRLQWV 0RUWDODQG,PPRUWDO :  K\ZDVPDLQWDLQLQJWKHDXWKHQWLFLW\RIWKLVϰH[LEOHIRUPPRUHLPSRUWDQW WKDQSUHVHUYLQJWKHELRPDWWHU":K\GLGWKHVFLHQWLVWVODERUWRPDLQWDLQ WKHSUHFLVHVKDSHϰH[LELOLW\DQGVXSSOHQHVVLQWKRVHSDUWVRIWKHERG\WKDW >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 XQOLNHWKHKHDGDQGKDQGVZHUHQHYHUPHDQWIRUSXEOLFGLVSOD\":KDWZDV WKHSROLWLFDOUROHRIVXFKDSURMHFW"6RPHDVSHFWVRIWKLVUROHPD\EHFRPH FOHDUHULIZHFRPSDUHWKLVERG\ZLWKWKHERGLHVRIVRYHUHLJQUXOHUVLQGLI IHUHQWFXOWXUDODQGKLVWRULFDOFRQWH[WV:HVWHUQ(XURSHDQNLQJVIDPRXVO\ DQDO\]HGE\(UQVW.DQWRURZLF]DUHDXVHIXOSRLQWRIGHSDUWXUH.DQWRUR ZLF]IRFXVHGRQODWHPHGLHYDODQGHDUO\PRGHUQOHJDOWKHRULHVWKDWOLQNHG PRQDUFKLFVRYHUHLJQW\DQGWKHNLQJ·VERG\$Q\VRYHUHLJQSRZHULVDEVROXWH QRWRQO\VSDWLDOO\ZLWKLQVRYHUHLJQERUGHUVEXWDOVRWHPSRUDOO\LWLVSRWHQ WLDOO\DEOHWRUHSURGXFHLWVHOISHUSHWXDOO\VXUYLYLQJWKHGHPLVHRIDFRQFUHWH DJHQWRIVRYHUHLJQW\%XWLQZKDWPDWHULDOIRUPLVWKHWHPSRUDOSHUSHWXLW\ RIVRYHUHLJQW\PDQLIHVWHGFRQVLGHULQJWKDWERGLHVDUHPRUWDO":KHQWKLV TXHVWLRQ EHFDPH LPSRUWDQW IRU SROLWLFDO DQG WKHRORJLFDO UHDVRQV LQ ODWH PHGLHYDO(QJODQGDQG)UDQFHLWOHGWRWKHGHYHORSPHQWRIDOHJDOGRFWULQH RI´WKHNLQJ·VWZRERGLHVµ:LWKWKHVKLIWWRZDUGDQHZVHFXODUL]HGPRGHO RIPRQDUFK\WKHNLQJ·VOHJLWLPDF\FRXOGQRORQJHUEHEDVHGVROHO\RQWKH DSSURYDODQGFRQVHFUDWLRQE\WKHFKXUFKDQGLQVWHDGEHFDPHSXUHO\´G\ QDVWLFµFRPLQJQRWIURPJUDFHEXWIURPQDWXUH´5R\DOTXDOLWLHVDQGSRWHQ FLHVµZHUHQRZVHHQDVQDWXUDOWUDLWVWKDWGZHOOHGGLUHFWO\LQWKHNLQJ·VEORRG FUHDWLQJ´DUR\DOVSHFLHVRIPDQµ೓$FFRUGLQJWRWKLVYLHZWKHSK\VLFDOERG\ RI WKH NLQJ XQOLNH WKDW RI UHJXODU PRUWDOV ZDV GRXEOHG FRQVLVWLQJ RI WZR ERGLHVWKDWFRH[LVWHGZLWKLQRQHϰHVK³WKHPRUWDOERG\ ERG\RIQDWXUH DQG WKHLPPRUWDOERG\ ERG\RIJUDFH 7KHNLQJ·VGHDWKZDVWKHGHPLVHRIKLV PRUWDOERG\ZKLOHWKHLPPRUWDOERG\VXUYLYHGDQGDIWHUWKHSHULRGRILQ WHUUHJQXPUHLQKDELWHGWKHϰHVKRIWKHQH[WNLQJ '  XULQJWKHLQWHUUHJQXPWKHGRXEOLQJRIWKHPRQDUFK·VERG\DFTXLUHG DQ H[SOLFLWO\ PDWHULDO PDQLIHVWDWLRQ ZKLFK FDPH WR EH UHϰHFWHG LQ WKH FRQVWUXFWLRQRIWKHPRQDUFK·VHϲ J\7KHHϲ J\ORRNHGXQFDQQLO\VLPLODUWR WKHGHFHDVHGPRQDUFKEXWZDVGLϸHUHQWIURPKLVRUKHUH[WHUQDOUHSUH VHQWDWLRQ:KLOHVFXOSWXUHVDQGLPDJHVRIWKHGHDGDUHFRPPRQLQPDQ\ IXQHUDOFHUHPRQLHVDURXQGWKHZRUOGWKH\XVXDOO\IXQFWLRQDVDUHSUHVHQWD WLRQRIWKHGHDGSHUVRQ³WKDWLVDVDVXEVWLWXWHIRUWKHPLVVLQJFRUSVH%XWWKH UROHSOD\HGE\WKHHϲ J\ZDVGLϸHUHQWLWDSSHDUHGRQO\GXULQJDVKRUWSHULRG RIWLPHEHIRUHDQGGXULQJWKHIXQHUDODOZD\VFRH[LVWLQJZLWKWKHGLVSOD\HG FRUSVHRIWKHPRQDUFKLQVWHDGRIVXEVWLWXWLQJIRULW 7  KH SDLU RI WKH FRUSVH DQG WKH Hϲ J\ PDQLIHVWHG WKH DFWXDO PDWHULDO GRXEOLQJRIWKHPRQDUFK·VERG\7ROHDYHQRGRXEWWKDWWKLVZDVWKHVDPH ERG\ RQO\ GRXEOHG Hϲ JLHV ZHUH PDGH WR ORRN OLNH DQ H[DFW KHDOWK\ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 VXUYLYLQJ  YHUVLRQ RI WKH PRQDUFK³VR H[DFW WKDW VRPHWLPHV HYHQ WKH FRXUWLHUV PLVWRRN WKH Hϲ J\ IRU WKH OLYLQJ NLQJ (ϲ JLHV ZHUH SURGXFHG LQ VHFUHWZLWKJUHDWDUWLVWLFHϸRUWVVXPPRQHGIRUWKLVWDVN7KH\ZHUHPDGHRI ZD[OHDWKHUDQGZRRG7KHLUIDFHVZHUHPHWLFXORXVO\PRGHOHGRQWKHGHDWK PDVNRIWKHPRQDUFKDQGFDUHIXOO\SDLQWHGWRORRNDVDOLYHDVSRVVLEOH5HDO KDLU ZDV XVHG DUWLϮFLDO H\HODVKHV ZHUH LQVHUWHG OLPEV ZHUH FUHDWHG ZLWK PRYLQJ MRLQWV ,Q VL[WHHQWKFHQWXU\ )UDQFH DQG (QJODQG GXULQJ SUHSDUD WLRQVIRUWKHPRQDUFK·VIXQHUDOWKHHϲ J\ZDVGLVSOD\HGDVSURPLQHQWO\DV WKHFRUSVH%XWEHFDXVHLWIXQFWLRQHGDVWKHVXUYLYLQJ ERG\RIWKHVRYHUHLJQ RIWHQPRUHDWWHQWLRQZDVSDLGWRLWWKDQWRWKHFRUSVH7KHHϲ J\ZDVGUHVVHG LQWKHPRQDUFK·VFORWKHVDQGVHDWHGRQWKHWKURQHPHGLFVSUHWHQGHGWRWDNH LWVSXOVHDQGOLVWHQWRLWVEUHDWKLWZDVVHUYHGIRRGDQGZLQHDQGDIWHUPHDOV LWVPRXWKDQGKDQGVZHUHZLSHG'XULQJWKHIXQHUDOSURFHVVLRQWKHPRQ DUFK·VFRUSVHDQGHϲ J\ERWKZHUHFDUULHGWKURXJKWKHFLW\&RXUWLHUVRIWHQ MRVWOHGZLWKHDFKRWKHUIRUWKHSRVLWLRQQHDUHVWWRWKHHϲ J\LJQRULQJWKH FRUSVH SD\LQJPRUHDWWHQWLRQWRWKHVXUYLYLQJSHUSHWXDOKDOIRIWKHVRYHU HLJQ :LWKWKHFRURQDWLRQRIWKHQH[WPRQDUFKWKHPRUWDODQGLPPRUWDO ERGLHVEHFDPHRQFHDJDLQUHXQLWHGZLWKLQRQHSHUVRQ·VϰHVK7KHFRUSVHRI WKHSUHYLRXVPRQDUFKZDVEXULHGDQGKLVHϲ J\FRXOGQRORQJHUEHSXEOLFO\ VHHQDQGZDVKLGGHQRUGHVWUR\HG , QKLVERRN.DQWRURZLF]GLVFXVVHVWKHWKHRU\RIWKHNLQJ·VWZRERGLHVDV DQDUWLIDFWRIODWHPHGLHYDO²HDUO\PRGHUQ&KULVWLDQ:HVWHUQ(XURSH+RZ HYHUDVDQWKURSRORJLVWVDQGKLVWRULDQVKDYHVKRZQPDQ\FRPSDUDEOHULWX DOVRIWKHSHUSHWXDOUHJHQHUDWLRQRIVRYHUHLJQSRZHUKDYHH[LVWHGLQGLYHUVH VRFLRFXOWXUDODQGKLVWRULFDOFRQWH[WV7KHWKLUGHGLWLRQRI6LU-DPHV)UD]HU·V 7KH*ROGHQ%RXJK$6WXG\LQ&RPSDUDWLYH5HOLJLRQSXEOLVKHGLQGHVFULEHV WKHULWXDOVRIUR\DOVXFFHVVLRQLQWKH6KLOOXNNLQJGRPRIVRXWKHUQ6XGDQ ZKLFKHFKRWKRVHGHVFULEHGE\.DQWRURZLF]LQVRPHGHWDLOLQFOXGLQJWKH ULWXDOVRIGRXEOLQJWKHUR\DOERG\DQGXVLQJDZRRGHQHϲ J\&RPSDUDEOH FRVPRORJLHVDQGULWXDOVGHYHORSHGLQRWKHUSDUWVRIWKHZRUOGDQGSHULRGV³ IURP(DVW,QGLDWRSUHPRGHUQ-DSDQIURPDQFLHQWLPSHULDO5RPHWRWKH PRGHUQ9DWLFDQ ,WDSSHDUVWKDWDWHPSRUDOGLVFRQWLQXLW\EHWZHHQWKH LPSHUPDQHQFHRIWKHVRYHUHLJQ·VKXPDQERG\DQGWKHSHUPDQHQFHRIWKHVRYHU HLJQRϲ FHFRXSOHGZLWKDQDWWHPSWWRDYRLGDFULVLVRISRZHUDVDUHVXOWRI WKLV GLVFRQWLQXLW\ OHG WR WKH HPHUJHQFH RI FRPSDUDEOH FRVPRORJLHV DQG ULWXDOVRIERGLO\GRXEOLQJLQPDQ\GLϸHUHQWFRQWH[WV >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 7  KHFDVHH[SORUHGE\.DQWRURZLF]WKHUHIRUHDSSHDUVWREHDVLJQLϮFDQW EXW FXOWXUDOO\ VSHFLϮF YDULHW\ RI D EURDGHU SKHQRPHQRQ ,Q WKH /HQLQLVW V\VWHPDGLVWLQFWSROLWLFDOFRVPRORJ\WKDWOLQNHGDGRXEOLQJRIWKHIRXQGD WLRQDOERG\ZLWKWKHVRYHUHLJQW\RIWKHSROLWLFDOUHJLPHKDGDOVRHPHUJHG 7KHOLQNRIWKLVSROLWLFDOFRVPRORJ\ZLWKWKHERG\WKDWLVSUHVHUYHGIRUSRV WHULW\ZDVQRWIRUPXODWHGDWRQFHEXWGHYHORSHGJUDGXDOO\:LWKWLPHWKLV SROLWLFDOFRVPRORJ\VKDSHGWKHSHFXOLDUUHTXLUHPHQWVDQGFRQVWUDLQWVRIWKH VFLHQWLϮFSUDFWLFHWKDWZDVGHVLJQHGWRDFKLHYHSUHVHUYDWLRQ7KLVLVQRWDQ DUJXPHQWDERXWGLUHFWFDXVDOLW\7KHVWUXFWXUHRI/HQLQLVWVRYHUHLJQW\GLG QRWGHYHORSDVDGLUHFWWUDQVIRUPDWLRQRIVRYHUHLJQSULQFLSOHVWKDWH[LVWHG LQWKH5XVVLDQPRQDUFK\RULQWKHLQVWLWXWLRQVDQGEHOLHIVRIWKH2UWKRGR[ FKXUFK$V0LFKDHO&KHUQLDYVN\DVWXGHQWRI.DQWRURZLF]KDVDUJXHGDGRF WULQH FRPSDUDEOH WR WKDW RI WKH NLQJ·V WZR ERGLHV LQ )UDQFH DQG (QJODQG QHYHUGHYHORSHGLQWKH5XVVLDQF]DULVWVWDWH+RZHYHULQWKH/HQLQLVWSRO LW\WKHSHUSHWXDOGLPHQVLRQRIVRYHUHLJQW\DWVRPHSRLQWDOVREHFDPHPDQ LIHVWHGPDWHULDOO\LQWKHIRUPRIDGRXEOHGVRYHUHLJQERG\7KHLPSRUWDQFH RIWKLVGRXEOHGERG\LQWKHSROLWLFDOUHJLPHRIWKH%ROVKHYLNVWDWHZDVHQ DEOHGQRWE\WKHSUHYLRXVLQVWLWXWLRQDOVWUXFWXUHVRIWKHSUHUHYROXWLRQDU\ 5XVVLDQVWDWH,WGHYHORSHGUDWKHUWKURXJKDFRPELQDWLRQRIFLUFXPVWDQFHV³ WKHUHODWLYHO\ORQJSUHVHQFHRIWKHXQEXULHGERG\LQWKHPRQWKVDIWHU/HQ LQ·VGHDWKWKHSROLWLFDOGLVVRFLDWLRQRI/HQLQIURPWKHDUWLϮFLDOO\FRQVWUXFWHG ´/HQLQLVPµDQGWKHSHFXOLDUFRPELQDWLRQRIWKHPRGHUQUHYROXWLRQDU\HWKRV DQGWUDGLWLRQDOIRUPRISRZHUWKDWGHϮQHGWKH%ROVKHYLNVWDWH7RFODULI\WKHVH SRLQWVZHPXVWFRPSDUHWKH%ROVKHYLNIRUPRISRZHUZLWKWKDWLQPRGHUQ GHPRFUDFLHVDQGDEVROXWLVWPRQDUFKLHV 7KH.LQJWKH3HRSOHDQGWKH3DUW\ &  ODXGH/HIRUWDUJXHVWKDWWKHSROLWLFDOLQVWLWXWLRQRIVRYHUHLJQSHUSHWXLW\ LQPRGHUQOLEHUDOGHPRFUDF\EHFDPHQHJDWLYHO\UHODWHGWRWKDWLQVWLWXWLRQ LQWKHDEVROXWLVWPRQDUFKLHVWKDWLWUHSODFHG,QWKH(XURSHDQDEVROXWLVW PRQDUFKLHVWKHVRYHUHLJQ·VOHJLWLPDF\ZDVJXDUDQWHHGE\WKHPRQDUFK·VOLQN WR´DQRWKHUSODFHµ³DSODFHWKDWZDVH[WHUQDO WRWKHSROLWLFDOZRUOGRIWKH PRQDUFK\ZKHUHWKHHWHUQLW\RIWKDWVRYHUHLJQSRZHUZDVDQFKRUHG,W ZDVLQWKDWH[WHUQDORWKHUSODFHWKDWWKHSK\VLFDOERG\RIHDFKPRQDUFKZDV >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 ´ORFDWHGµXQWLOWKDWPRQDUFKGLHG,QDFRQVWLWXWLYHSDUDGR[RIDEVROXWLVW VRYHUHLJQW\HDFKPRQDUFKRFFXSLHGWKHSRVLWLRQRILPPRUWDOLW\EXWRQO\ WHPSRUDULO\,QFRQWHPSRUDU\OLEHUDOGHPRFUDFLHVDUJXHV/HIRUWWKHFHQ WHURIVRYHUHLJQSRZHULVDOVRDQFKRUHGLQWKHLPPRUWDO´RWKHUSODFHµEXW QRZWKDWSODFHLVHPSW\'HPRFUDWLFUXOHUVFDQQRWRFFXS\LWDVWKHDEVROXW LVWPRQDUFKGLGEXWWKH\PXVWDFWLQWKHQDPHRIWKDWSODFHDQGUHIHUWRLWIRU OHJLWLPDF\,WLVLQWKDWSODFHWKDWWKHIRXQGDWLRQDO7UXWKRIOLEHUDOGHPRF UDF\ LWVVRXUFHRIOHJLWLPDF\ LVDQFKRUHG ( ULF6DQWQHUKDVDOVRDUJXHGWKDWLQOLEHUDOGHPRFUDF\ZLWKWKHGLVDS SHDUDQFHRIWKHNLQJ·VERG\WKHORFXVRIVRYHUHLJQW\PLJUDWHGLQWRDQHZ ORFDWLRQ%XWXQOLNH/HIRUWKHGHϮQHVWKDWORFDWLRQDVWKHH[WUDSHUVRQDO ERG\RIWKH3HRSOH SRSXODWLRQQDWLRQ  , QIDFWGHVSLWHWKHLUVHHPLQJLQFRQVLVWHQF\/HIRUW·VDQG6DQWQHU·VDUJX PHQWVWDNHQWRJHWKHUGHVFULEHKRZWKHGRXEOLQJRIWKHVRYHUHLJQ·VERG\ PDQLIHVWVLWVHOILQPRGHUQOLEHUDOGHPRFUDF\7KLVERG\LVVSOLWEHWZHHQ 6DQWQHU·VH[WUDSHUVRQDOERG\RIWKHSRSXODWLRQDQG/HIRUW·VH[WHUQDO´HPSW\ VSDFHµ7KHIRUPHULVWKHFROOHFWLRQRIKXPDQERGLHVWKDWFRQWLQXRXVO\VXF FHHGWKHSUHYLRXVRQHVLQWKHSHUSHWXDOOLIHRIWKHQDWLRQWKLVLVWKHPRG HUQHTXLYDOHQWRIWKHVXFFHVVLRQRIWKHPRUWDOERGLHVRINLQJVLQDQDEVROXWLVW G\QDVW\7KHODWWHULVWKHH[WHUQDOSODFHZKHUHWKHIRXQGDWLRQDO7UXWKRIWKH SROLWLFDOV\VWHPLVORFDWHGWKLVLVWKHPRGHUQHTXLYDOHQWRIWKHNLQJ·VLP PRUWDOERG\7KHIRXQGDWLRQDO7UXWKLVH[WHUQDODQGSULRUWRWKHV\VWHPLW FDQQRWEHTXHVWLRQHGLQWKHSROLWLFDOWHUPVRIWKHV\VWHPDQGSURYLGHVWKH V\VWHPZLWKOHJLWLPDF\,QGLϸHUHQWPRGHUQV\VWHPVWKLVSULRU7UXWKLVDU WLFXODWHGLQGLϸHUHQWWHUPV³LQWKHZRUGVRIWKH)RXQGLQJ)DWKHUV 8QLWHG 6WDWHV LQWKHPD[LPVRI0DU[LVP/HQLQLVP 6RYLHW8QLRQ DQGVRIRUWK &  RPSDULQJWKHVWUXFWXUHRIVRYHUHLJQW\LQWKHSUHPRGHUQDEVROXWLVWPRQ DUFK\ DQG LQ PRGHUQ OLEHUDO GHPRFUDF\ LV KHOSIXO IRU XQGHUVWDQGLQJ WKH VWUXFWXUHRIVRYHUHLJQW\LQWKH/HQLQLVWSROLW\ZKHUHLWORRNHGOLNHDSHFX OLDUFRPELQDWLRQRIWKHWZR 1RDFWLQJ6RYLHWOHDGHUDIWHU/HQLQ·VGHDWK FRXOGRFFXS\WKHFHQWHURIVRYHUHLJQSRZHUOLNHWKHDEVROXWLVWPRQDUFK GLGEHFDXVHWKHUHODWLRQRIHYHU\OHDGHUWRWKDWSRZHUZDVPHGLDWHGE\WKH ϮJXUHRI´/HQLQLVPµ(YHU\6RYLHWOHDGHUHYHQ6WDOLQDWWKHKHLJKWRIKLV SRZHUVKDGWRUHIHUWR/HQLQLVPIRUOHJLWLPDF\DQGFRXOGQRWTXHVWLRQLW $Q\SROLWLFDOϮJXUHLQ6RYLHWKLVWRU\ZDVJUDQWHGOHJLWLPDF\LILWFRXOGEH GHPRQVWUDWHGWKDWKHRUVKHZDVIDLWKIXOWR/HQLQLVPDQGZDVGHOHJLWL PL]HGLQDQLQVWDQWLILWZDVVKRZQWKDWKHRUVKHYLRODWHG/HQLQLVP7KH >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 HPHUJHQFHRI6WDOLQ·VSHUVRQDOLW\FXOWDQGWKHFROODSVHRIWKDWFXOWDIWHUKLV GHDWKZKLFKGLGQRWOHDGWRWKHFROODSVHRIWKHSDUW\DQGWKH6RYLHWV\VWHP LOOXVWUDWH WKLV SRLQW $W ϮUVW 6WDOLQ ZDV FHOHEUDWHG DV WKH PRVW IDLWKIXO /HQLQLVWVRPHRQHZKRKDGXQLTXHDFFHVVWR7UXWK%XWDIWHUKLVGHDWKLQ 6WDOLQZDVDFFXVHGRISUHFLVHO\WKHRSSRVLWH³RIKDYLQJGLVWRUWHGWKH 7UXWKRI/HQLQLVP/LNHRWKHU6RYLHWOHDGHUV6WDOLQGLGQRWDQGFRXOGQRW RFFXS\WKHFHQWHURIVRYHUHLJQSRZHU%XWZKHUHZDVWKDWFHQWHUORFDWHG" $QGZKDWZDVWKHSRVLWLRQRI/HQLQ·VERG\LQUHODWLRQWRLW" .  HQ-RZLWWDUJXHVWKDWSRZHULQWKH/HQLQLVWV\VWHPZDVFHQWHUHGQHLWKHU LQWKHWUDGLWLRQDOFKDULVPDWLFOHDGHU DVLQWKHDEVROXWLVWPRQDUFK\RUWKH 1D]LVWDWH QRULQGHSHUVRQDOL]HGPRGHUQEXUHDXFUDF\ DVLQOLEHUDOGHPRF UDF\ EXWLQVWHDGLQDQLQVWLWXWLRQWKDWZDVRUJDQL]HGDVDFRPELQDWLRQRI WKHWZR³WKH/HQLQLVWSDUW\-RZLWWGHϮQHVWKDWLQVWLWXWLRQDVQHRWUDGLWLRQDO EHFDXVHLWHPHUJHGZKHQWZRVHHPLQJO\LQFRPSDWLEOHSULQFLSOHVZHUHDE VRUEHGLQWRRQHRUJDQL]DWLRQDOVWUXFWXUHWKHWUDGLWLRQDOSULQFLSOHRI´LQGL YLGXDOKHURLVPµDQGWKHPRGHUQSULQFLSOHRI´RUJDQL]DWLRQDOLPSHUVRQDOLVPµ &RPSDULQJWZRNLQGVRI´WRWDOLWDULDQLVPµ/HQLQLVPDQG1D]LVP-RZLWWSRLQWV RXWWKDWWKH\ERWKHPSKDVL]HGD´KHURLFHWKLFµKRZHYHUZKDWDJHQW HDFK V\VWHPGHVLJQDWHGDVKHURLFZDVGLϸHUHQW,QWKH1D]LVWDWHWKDWDJHQWZDV WKH LQGLYLGXDO FKDULVPDWLF /HDGHU WKH )KUHU 1D]LVP ZDV EDVHG RQ WKH )KUHUSULQ]LS³RQWKHSHUVRQDOFKDULVPDRIWKH/HDGHUZKR´FODLPVDXWKRULW\ EHFDXVHKHLQFRUSRUDWHVWKHLGHDLQKLVSHUVRQµ,QWKH/HQLQLVWV\VWHPWKDW DJHQWZDVQRWDQLQGLYLGXDOEXWWKHSDUW\ZKRVH´KHURLVP>ZDV@GHϮQHGLQ RUJDQL]DWLRQDOQRWLQGLYLGXDOWHUPVµDQGWKHUHIRUHLWVSULQFLSOHRIRUJDQL]D WLRQZDV´FKDULVPDWLFLPSHUVRQDOLVPµ 7  KH/HQLQLVWSDUW\ZDVIRXQGHGRQDQGKHOGWRJHWKHUE\WKH´FRUUHFWOLQHµ DYHUVLRQRIWKHIRXQGDWLRQDO7UXWK(YHU\OHDGHULQWKH/HQLQLVWV\VWHP FODLPHGDXWKRULW\RQWKHEDVLVRIKLVNQRZOHGJHRIWKH´FRUUHFWOLQHµDQG QROHDGHUFRXOGTXHVWLRQLW$WWKHHQGRI/HQLQ·VOLIHDQGDIWHUKLVGHDWKWKH FRUUHFW OLQH EHFDPH DUWLFXODWHG DV WKH QHZO\ FRQVWUXFWHG GRFWULQH RI ´/HQLQLVPµ +RZHYHU VLQFH WKDW GRFWULQH ZDV LPSHUVRQDO QR RQH FRXOG SHUVRQDOO\DXWKRURURSHQO\TXHVWLRQLWDQGHYHU\RQHKDGWRUHIHUWRLWIRUOH JLWLPDF\ LWSRWHQWLDOO\DOORZHGIRUGLϸHUHQWLQWHUSUHWDWLRQV7KLVZDVZK\ DUJXHV -RZLWW WKH /HQLQLVW 3DUW\ DOZD\V JHQHUDWHG PDQ\ PRUH LQWHUQDO IDFWLRQVWKDQWKH1D]L3DUW\ $QGWKLVZDVDOVRZK\WKH/HQLQLVW3DUW\DO ZD\VKDGWKHOHJLWLPDWHSRWHQWLDOWRFULWLFL]HDQ\OHDGHULQFOXGLQJWKHJHQHUDO VHFUHWDU\LIDJURXSLQWKHSDUW\OHDGHUVKLSPDGHDVXFFHVVIXOFODLPWKDW >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 WKDW OHDGHU KDG YLRODWHG /HQLQLVP 7KLV ZDV ZKDW .KUXVKFKHY FODLPHG ZKHQKHDWWDFNHG6WDOLQ·VFXOWRISHUVRQDOLW\DWWKH7ZHQWLHWK3DUW\&RQJUHVV LQ $QGLWZDVDOVRZKDWKDSSHQHGWR.KUXVKFKHYZKHQKHZDVGH SRVHGE\WKH3ROLWEXURLQ - RZLWW·VDUJXPHQWFRPELQHGZLWK/HIRUW·VDQG6DQWQHU·VDGGVFODULW\WR KRZVRYHUHLJQSRZHULQWKH/HQLQLVWV\VWHPZDVRUJDQL]HG7KHFHQWHURI VRYHUHLJQW\KHUHZDVORFDWHGQHLWKHULQWKHWZLQQHGERG\RIWKHFKDULVPDWLF /HDGHU WKHDEVROXWLVWPRQDUFK QRULQWKHGXDOLW\RI´HPSW\SODFHµDQGFRO OHFWLYHERG\RIWKHSRSXODWLRQ OLEHUDOGHPRFUDF\ EXWUDWKHULQDPL[WXUH RIWKHWZR³WKH/HQLQLVWSDUW\7KHSDUW\DVDKHURLFDJHQWZDVLPSHUVRQDO FROOHFWLYHDQGGRXEOHG LQWRPRUWDODQGLPPRUWDOERGLHV,WVPRUWDOERG\ZDV WKHFROOHFWLRQRIDOOSDUW\PHPEHUVZKRVHRQJRLQJVXFFHVVLRQ OLNHWKHSRS XODWLRQ LQOLEHUDOGHPRFUDF\ PDGHWKHFRQWLQXRXVH[LVWHQFHRIWKHSDUW\ WKURXJKRXW 6RYLHW KLVWRU\ SRVVLEOH ,WV LPPRUWDO ERG\ ZDV WKH GRFWULQH RI /HQLQLVP³WKHIRXQGDWLRQDOXQTXHVWLRQDEOH7UXWKORFDWHGRXWVLGHWKHV\VWHP :  KDWZDVWKHUROHRI/HQLQ·VERG\LQWKLVVWUXFWXUHRISRZHU"7KDWERG\ VHUYHGWKHUROHRIWKHPDWHULDOPDQLIHVWDWLRQ RIWKHGRXEOHGERG\RIWKHSDUW\ DNLQWRWKHUROHSOD\HGWRJHWKHUE\WKHFRUSVHDQGWKHHϲ J\LQWKHDEVROXWLVW PRQDUFK\ &RQWLQXRXVO\UHSURGXFLQJ´/HQLQLVPµDVWKHIRXQGDWLRQDOWUXWK RI WKH 6RYLHW V\VWHP LQYROYHG QRW RQO\ PDQLSXODWLQJ DQG UHLQWHUSUHWLQJ /HQLQ·VWH[WVDQGIDFWVRIKLVOLIHEXWDOVRUHVFXOSWLQJDQGUHFRQVWUXFWLQJKLV SK\VLFDOERG\LQWKH0DXVROHXP6LPLODUO\WKHRQJRLQJUHIRUPVSXUJHVDQG UHFRQVWUXFWLRQVRIWKHSDUW\ZHUHFRPSDUDEOHWRWKHFRQWLQXRXVUHJHQHUDWLRQ RIWKHSRSXODWLRQLQOLEHUDOGHPRFUDF\³WKDWLVWRWKHSUDFWLFHVRIELRSROLWLFV 5HSURGXFLQJ/HQLQ·VERG\DWWKHOHYHORISK\VLFDOIRUP ZKLOHDOWHULQJDQG VXEVWLWXWLQJLWVELRORJLFDOPDWWHUDPRXQWHGWRGRXEOLQJWKLVERG\LQWRDERG\ FRUSVH PRUWDOELRORJLFDOUHPDLQV DQGERG\Hϲ J\ LPPRUWDOSK\VLFDOIRUP  7  RWKHFRPPRQYLVLWRUWRWKH0DXVROHXP/HQLQ·VERG\KDVDOZD\VDS SHDUHGDVWKHERG\FRUSVH³LQWDFWSUHVHUYHGRQFHDQGIRUDOOϮ[HGLQWKH PRPHQWRIGHDWK%XWWRWKHJD]HRIWKHSROLWLFDOUHJLPH WKHSDUW\OHDGHUVKLS DQGWKHODE·VVFLHQWLVWV /HQLQ·VERG\DSSHDUHGDVWKHERG\Hϲ J\³G\QDPLF UHJXODUO\UHVFXOSWHGORFDWHGLQWKHSRLQWRIVRYHUHLJQLPPRUWDOLW\ , QDZD\/HQLQ·VLPPRUWDOERG\Hϲ J\ZDVUHPLQLVFHQWRIWKHHϲ JLHVRI PHGLHYDONLQJV+RZHYHUWKHUHZDVDQLPSRUWDQWGLϸHUHQFH7KHNLQJ·VHI ϮJ\H[LVWHGRQO\WHPSRUDULO\GXULQJDVKRUWLQWHUUHJQXPZKHQWKHWZLQQHG ERG\RIWKHPRQDUFKZDVPDWHULDOO\GRXEOHGLQWRFRUSVHDQGHϲ J\&RQ YHUVHO\/HQLQ·VERG\ZDVGRXEOHGLQWRFRUSVHDQGHϲ J\ZLWKLQRQHDQGWKH >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 VDPHERG\DQGDVDSHUSHWXDOO\UHQHZHGFRQGLWLRQ7KHUHJXODU´ELJSURFHGXUHVµ RIUHHPEDOPLQJDQGUHFRQVWUXFWLQJ/HQLQ·VERG\WKDWWKHODEKDVSHUIRUPHG HYHU\RQHDQGDKDOI\HDUVKDYHSOD\HGDUROHWKDWFDQEHSDUDOOHOHGWRWKDW RIWKHLQWHUUHJQXPDQGUHQHZDORINLQJVLQWKHPRQDUFK\7REHPRUHSUH FLVHERWKIXQFWLRQHGDVPHFKDQLVPVRIVRYHUHLJQSHUSHWXLW\ 'HDG/HDGHUDQG/LYLQJ3DWLHQWV 7  KH´ELJSURFHGXUHVµODVWDERXWWZRPRQWKV'XULQJWKDWWLPHDOOHPEDOP LQJOLTXLGVDUHGUDLQHGIURP/HQLQ·VERG\DQGVXEMHFWHGWRDYDULHW\RIELR FKHPLFDODQDWRPLFDODQGSK\VLFDOWHVWVWRLGHQWLI\XQZDQWHGELRORJLFDODQG FKHPLFDOSURFHVVHV6DPSOHVRIGLϸHUHQWWLVVXHVLQWKHERG\DUHFROOHFWHG DQGWHVWHG+XQGUHGVRISKRWRJUDSKVRIWKHERG\·VVXUIDFHVDUHWDNHQZLWK SUHFLVLRQFDPHUDVDQGFRPSDUHGZLWKWKHSKRWRJUDSKVWDNHQSUHYLRXVO\WR LGHQWLI\FKDQJHV0LFURLQMHFWLRQVRIDUWLϮFLDOVXEVWDQFHVLQIXVLRQVRIHP EDOPLQJDQGRWKHUOLTXLGVDQGDSSOLFDWLRQVRISODVWLFVDQGRWKHUPDWHULDOV DUHXVHGWRUHFRQVWLWXWHWKHRULJLQDOYROXPHRIERG\SDUWVODQGVFDSHRI LWVVXUIDFHVVNLQSUHVVXUHMRLQWϰH[LELOLW\FRORUDQGZHLJKW$OOWKLVFRQFHUQV QRWRQO\WKHVPDOOSDUWVRIWKHERG\YLVLEOHWRWKHSXEOLF KHDGDQGKDQGV EXW WKHSDUWVWKHSXEOLFFDQQHYHUVHH7KHQWKHERG\LVVXEPHUJHGIRUVXEVWDQWLDO SHULRGVRIWLPH GD\VRUZHHNV LQEDWKVZLWKGLϸ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rought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 ZKLFKKDYHHQWHUHGUHJXODUPHGLFLQHDQGHYHQIRXQGWKHLUZD\LQWR:HVW HUQPHGLFDOSUDFWLFH&RQVLGHUWZRH[DPSOHV , QWKHV<XULL/RSXNKLQDQGDWHDPRIODEVFLHQWLVWVZRUNHGRQDQ LPSURYHGPHWKRGIRUPDLQWDLQLQJWKHIRUPDQGYROXPHRIGLϸHUHQWWLVVXHV DQGRUJDQVLQ/HQLQ·VERG\7KH\ZRUNHGRQDYHUVLRQRISHUIXVLRQ³WKHϰRZ LQJRIOLTXLGV LWFDQEHEORRGRUSUHVHUYDWLRQOLTXLGV WKURXJKWKHFDSLOODU\ V\VWHPRIDQRUJDQWRPDLQWDLQLWVVWUXFWXUHDQGYROXPHRYHUWLPH3HUIX VLRQLVDOVRXVHGLQUHJXODUPHGLFLQHWRPDLQWDLQRUJDQVRIUHFHQWO\GHFHDVHG SHUVRQVLQDYLDEOHFRQGLWLRQRXWVLGHWKHERG\PDNLQJWKHPDYDLODEOHIRU RUJDQWUDQVSODQWDWLRQ$QDSSURDFKWRWKLVSUREOHPWKDW/RSXNKLQGHYHO RSHGLQ/HQLQ·VODEKHODWHUDGDSWHGIRUKLVZRUNRQNLGQH\WUDQVSODQWDWLRQ LQOLYLQJSDWLHQWV$OWKRXJKPDLQWDLQLQJWLVVXHVLQ/HQLQ·VGHDGERG\LVQRW WKHVDPHDVPDLQWDLQLQJWKHYLDELOLW\RIDQRUJDQVRPHWHFKQLFDOGHVLJQV WKDWQHHGHGWREHLQYHQWHGWRSHUIRUPFRPSOH[SHUIXVLRQLQERWKSURMHFWV ZHUHVLPLODU/RSXNKLQ·VORQJWLPHFROOHDJXH3URIHVVRU.R]HO·WVHYH[SODLQHG WRPHWKHFRQQHFWLRQEHWZHHQWKHVHWZRSURMHFWV <  RXVHHGXULQJWKHSURFHGXUHRIUHHPEDOPLQJLWLVFUXFLDOWKDWWKHDQDWRP LFDOLPDJH>YROXPHDQGG\QDPLFFKDUDFWHULVWLFVRIWLVVXHV@LVSUHVHUYHGDEVR OXWHO\LQWDFW,WLVLPSRUWDQWWRPDLQWDLQSUHFLVHYROXPH7RSXWLWVLPSO\ QRWLVVXHVKRXOGVZHOORUVKULQNZKHQOLTXLGVDUHDGGHGRUGUDLQHG:KHQ /RSXNKLQZRUNHGRQWKLVFKDOOHQJLQJWDVNKHDUULYHGDWDYHU\LQWHUHVWLQJ LGHDZKLFKKHODWHUDSSOLHGWRKLVZRUNRQNLGQH\WUDQVSODQWDWLRQ$NLGQH\ LV DQ DSSURSULDWH RUJDQ IRU WKLV DSSURDFK EHFDXVH LW·V UHODWLYHO\ LVRODWHG LQVLGHWKHERG\OLNHDVHSDUDWHYHVVHOZLWKDQLQSXWDQGDQRXWSXWRIOLT XLGV8VLQJDFRPSOH[VHWRILQVWUXPHQWVWKDWHQDEOHGSHUIXVLRQRIGLϸHU HQWWLVVXHVZKHQVROXWLRQVϰRZWKURXJKWKHP/RSXNKLQODWHUDSSOLHGWKLVWR PDLQWDLQLQJWKHOLIHDQGYROXPHRIDNLGQH\RXWVLGHRIWKHERG\7RSUHSDUH NLGQH\VIRUWUDQVSODQWDWLRQ7KHϮUVWLQVWUXPHQWDOVHW>SULERUQRHRIRUPOHQLH@ KHGHVLJQHGKHUHLQWKH>0DXVROHXP@ODE / RSXNKLQGHVFULEHGWKHLQVWUXPHQWDOVHWKHLQYHQWHGDVDFROOHFWLRQRI´V\ ULQJHVIXQQHOVDQGFDQQXODV³WKLQWKLFNORQJVKRUWVWUDLJKWFURRNHG RIGLϸHUHQWVL]HVFDSDEOHRIGHOLYHULQJOLTXLGVWRYDULRXVKLGGHQSODFHVLQ WKHERG\ZKHUHVLJQVRIVRIWHQLQJRUGHFRPSRVLWLRQRIWLVVXHVKDVEHHQ GHWHFWHGµ7KH\DUHXQLTXHDQGWKHLUPRGLϮFDWLRQVDUHVWLOOXVHGWRGD\´,I \RXVDZZKDWLQVWUXPHQWVWKH0DXVROHXPJURXSVWLOOKDVDWLWVGLVSRVDO\RX >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 ZRXOGEHDPD]HGµ/RSXNKLQDGGHGZLWKSULGH,QIRUKLVZRUNRQGH YHORSLQJDPHWKRGRINLGQH\WUDQVSODQWDWLRQ/RSXNKLQZRQWKH6WDWH3UL]H RIWKH8665 2  QHUHTXLUHPHQWRIWKHZRUNRQ/HQLQ·VERG\KDVEHHQWKDWWLVVXHVVKRXOG EH GDPDJHG DV OLWWOH DV SRVVLEOH QHZ SXQFWXUHV VKRXOG EH DYRLGHG )RU H[DPSOHLWZDVLPSRUWDQWWRGHYHORSQRQLQYDVLYHPHWKRGVRIWHVWLQJWKH LQWHUQDOFRPSRVLWLRQRIWKHHSLGHUPLVWKHRXWPRVWOD\HUVRIVNLQZLWKRXW FXWWLQJWKHVNLQ$WHVWPHWKRG/RSXNKLQGHYHORSHGLQWKLVZRUNODWHULQIRUPHG UHVHDUFKRQQRQLQYDVLYHWHFKQLTXHVIRUPHDVXULQJFKROHVWHUROOHYHOV LQ WKH VNLQRIOLYLQJSDWLHQWVZKLFKKHGHVLJQHGZLWKDJURXSRIFROOHDJXHVDWWKH 5HVHDUFK,QVWLWXWHRI3K\VLFR&KHPLFDO0HGLFLQH 7KHPHWKRGNQRZQDV WKH´WKUHHGURSWHVWµLQYROYHVSXWWLQJRQWKHVXUIDFHRIWKHSDOPDGURSRI DUHDJHQWZKLFKHQWHUVLQWRDUHDFWLRQZLWKVNLQFKROHVWHURODSSO\LQJDVHF RQGGURSRIDQRWKHUUHDJHQWWRWKHϮUVWVROXWLRQWRWLHLWDQGWKHQDSSO\LQJ DWKLUGGURSRIDGLϸHUHQWUHDJHQWWRWKDWVSRWWRFKDQJHWKHFRORURIWKHUH VXOWDQWPL[ZKLFKFDQEHDFFXUDWHO\PHDVXUHGZLWKDVSHFWURSKRWRPHWHU 7KDWFRORUFRUUHODWHVZLWKWKHOHYHORIFKROHVWHUROLQWKHVNLQDQGWKHPHWKRG FDQTXLWHDFFXUDWHO\SUHGLFWWKHRYHUDOOOHYHORIFKROHVWHUROLQWKHERG\ VLQFH DSSUR[LPDWHO\SHUFHQWRIWKHKXPDQERG\·VFKROHVWHUROLVFRQWDLQHGLQ WKHVNLQ :KLOHRQHUHVHDUFKIRFXVHGRQDGHDGERG\DQGWKHRWKHUUHVHDUFK IRFXVHGRQOLYLQJSDWLHQWVERWKGHDOWZLWKDSUREOHPWKDWUHTXLUHGQRQLQ YDVLYHGLDJQRVWLFVZKLFKDOORZHG/HQLQ·VGHDGERG\WRDϸHFWWKHZRUNRQ OLYLQJSDWLHQWV,Q/RSXNKLQGHVFULEHGWKHWKUHHGURSWHVWLQDQ(QJ OLVKODQJXDJH SXEOLFDWLRQ DQG LQ  LW UHFHLYHG D 86 SDWHQW ,W ZDV GHYHORSHG LQWR DQ )'$DSSURYHG SRLQWRIFDUH GLDJQRVWLF WHVW FDOOHG WKH ´3UH9XWHVWµE\WKH&DQDGLDQFRPSDQ\0LUDFXOLQV7RGD\WKHFRPSDQ\VXF FHVVIXOO\PDUNHWVLWLQ&DQDGD(XURSHDQGWKH8QLWHG6WDWHVDV´WKHZRUOG·V ϮUVWDQGRQO\QRQLQYDVLYHVNLQFKROHVWHUROWHVWµ7KHSURPRWLRQDOPDWH ULDOVPDNHQRPHQWLRQRILWVOLQNWR/HQLQ·VERG\  , QKHUVWXG\RIWKH/HQLQFXOWKLVWRULDQ1LQD7XPDUNLQVXJJHVWHGWKDWWKH %ROVKHYLNOHDGHUVKLSFRXOGKDYHSUHVHUYHG/HQLQ·VERG\WRFUHDWHD´VDFUHG UHOLFµWKDWZRXOG´FRQWLQXHWROHJLWLPDWH6RYLHWSRZHUDQGPRELOL]HWKHSRS XODWLRQµZKLFKZDVGHHSO\2UWKRGR[ODUJHO\LOOLWHUDWHDQGIDPLOLDUZLWK VDLQWV +RZHYHUZKLOHWKHGLVSOD\RIWKLVERG\PD\VHHPUHPLQLVFHQWRI UHOLJLRXVUHOLFVWKHSUREOHPZLWK7XPDUNLQ·VDUJXPHQWLVWKDWWKHSDUW\ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 OHDGHUVIURPWKHEHJLQQLQJRIWKLVSURMHFWH[SOLFLWO\WULHGWRGLVWDQFHLWIURP DQ\DVVRFLDWLRQZLWKUHOLFVDQGPLUDFOHVDQGWKH\DOZD\VHPSKDVL]HGWKDWWKH SUHVHUYDWLRQRI/HQLQ·VERG\ZDVDJUHDWDFKLHYHPHQWRIWKH6RYLHWVFLHQFH,W KDVEHHQDOVRVXJJHVWHGWKDWWKHGHFLVLRQWRSUHVHUYH/HQLQFRXOGKDYHEHHQ LQϰXHQFHGE\1LNRODL)HGRURY·VSKLORVRSK\RI´FRPPRQFDXVHµZKLFK´VRXJKW KXPDQVDOYDWLRQLQWKHSK\VLFDOUHVXUUHFWLRQRIWKHϰHVKµ7KLVDUJXPHQW KRZHYHULVDOVRSUREOHPDWLFVLQFHWKHPHWKRGRISUHVHUYLQJ/HQLQ·VERG\DV, KDYHDUJXHGLQFOXGHVFRQWLQXRXVVXEVWLWXWLRQRILWVϰHVKZLWKQHZLQRUJDQLF VXEVWDQFHVSURGXFLQJDNLQGRITXDVLDUWLϮFLDOϰHVKWKDWLVTXLWHLQFRPSDW LEOHZLWKWKH´UHPDLQVµWKDW)HGRURYVRXJKWWRUHVXUUHFW 7  RXQGHUVWDQGZKDWWKHSROLWLFDOPHDQLQJRI/HQLQ·VERG\ZDVLQ6RYLHW WLPHVDQGZKDWUROHLWFRQWLQXHVWRSOD\WRGD\LWLVLQVXϲ FLHQWWRDQDO\]HLW RQO\DWWKHOHYHORIV\PEROLVPDVDWRRORIWKLVRUWKDWLGHRORJ\,WLVHTXDOO\ LPSRUWDQWWRLQYHVWLJDWHWKHPDWHULDOLW\RIWKLVERG\³WKHFRQGLWLRQRILWVWLV VXHVFHOOVDQGMRLQWVWKHSURFHGXUHVDQGWHVWVWRZKLFKLWKDVEHHQVXEMHFWHG DQGWKHVFLHQWLϮFNQRZOHGJHWKDWKDVGHYHORSHGDURXQGLW/HQLQ·VERG\KDV SOD\HGDFULWLFDOUROHLQWKHV\VWHPRI/HQLQLVWVRYHUHLJQW\7KDWVRYHUHLJQW\ ZDVYHVWHGQHLWKHULQWKHϮJXUHRIWKHUXOHU¬ DVLQWKH´SUHPRGHUQµDEVROXWLVW PRQDUFK\ QRULQWKHDEVWUDFW¬SRSXODWLRQ DVLQWKH´PRGHUQµOLEHUDOGHPRF UDF\ EXWLQWKHFROOHFWLYHDJHQWWKDWFRPELQHGSURSHUWLHVRIWKHWZRWKH /HQLQLVWSDUW\7KLVDJHQWWUDQVFHQGHGHYHU\RQHRILWVPHPEHUV³HDFKSDUW\ PHPEHULQFOXGLQJWKHSDUW\OHDGHUFRXOGEHIRXQGWREHZURQJDQGLOOHJLWL PDWH EXW WKH FROOHFWLYH SDUW\ ZDV DOZD\VDOUHDG\ OHJLWLPDWH DQG ULJKW 7KHOHJLWLPDF\RIWKLVDJHQWZDVJXDUDQWHHGE\WKHIRXQGDWLRQDO7UXWKRI /HQLQLVPWRZKLFKWKHSDUW\KDGXQLTXHDFFHVV7KHLPSHUVRQDOFROOHFWLYH WZLQQHGERG\RIWKHSDUW\ZDVPDQLIHVWHGLQRQHFRQFUHWHPDWHULDOIRUP³ /HQLQ·V ERG\ 5HSURGXFLQJ DQG UHDGMXVWLQJ ´/HQLQLVPµ DV WKH IRXQGDWLRQDO WUXWKRIWKH6RYLHWV\VWHPLQYROYHGFRQVWDQWPDQLSXODWLRQDQGUHLQWHUSUH WLRQRI/HQLQ·VWH[WVDQGIDFWVRIKLVOLIHDQGFRQVWDQWUHVFXOSWLQJDQGUHFRQ VWUXFWLRQRIKLVSK\VLFDOERG\DVDFRPELQDWLRQRIDERG\FRUSVH YLVLEOHWR WKHSXEOLF DQGERG\Hϲ J\ YLVLEOHRQO\WRWKH3DUW\OHDGHUVKLS  ,QWKHHQGSHUVLVWHQWUXPRUVDERXW/HQLQ·VERG\EHLQJDZD[SXSSHWKDYH EHHQQHLWKHUTXLWHDFFXUDWHQRUDOWRJHWKHUZURQJ7KLVERG\LVUHDODQG\HW FRQVWUXFWHGLWVELRPDWHULDOFRPSRVLWLRQLVFKDQJLQJEXWLWVG\QDPLFIRUP UHPDLQVWKHVDPH,QGHHGIRFXVLQJRQSUHVHUYLQJLWVRULJLQDOELRORJLFDO PDWWHUZRXOGEHDSUREOHPIRUWKHSROLWLFDOUHJLPH,WZRXOGUHGXFHWKLV ERG\WRWKDWRIDFRQFUHWHELRORJLFDOLQGLYLGXDOXQGHUPLQLQJLWVUROHDVWKH >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1 LPPRUWDOVRYHUHLJQERG\WKDWWUDQVFHQGVLQGLYLGXDOPRUWDOFRQFUHWHQHVV 7KLVERG\PXVWLQKDELW/HQLQLVPEXWEHGLϸHUHQWIURP/HQLQ,WPXVWIHHO OLNH/HQLQEXWH[FHHGFRQFUHWHSHUVRQKRRG7KLVLVZKDW/RSXNKLQ·VWHUP ´OLYHVFXOSWXUHµLQWXLWLYHO\VWULYHVWRFRQYH\ 7  KLVSURMHFWHPHUJHGDQGHYROYHGDVSDUWRIDFRPSOH[SROLWLFDOFRVPRO RJ\WKDWPRVWSDUWLFLSDQWV³SROLWLFLDQVDQGVFLHQWLVWV³GLGQRWQHFHVVDULO\ VHHIRULWVXQGHUO\LQJFXOWXUDODQGSROLWLFDOORJLF7KHFXOWLYDWLRQRI/HQLQ·V ERG\LQWKH6RYLHWSHULRGZDVDOZD\VSHUIRUPHGLQVWULFWVHFUHF\EHKLQG FORVHGGRRUVYLVLEOHRQO\WRWKHJD]HRIWKHSROLWLFDOOHDGHUVKLS7KHUHDVRQ IRUWKLVVHFUHF\ZDVWKHVDPHDVWKHUHDVRQIRUPDNLQJLQYLVLEOHFRQVWDQW PDQLSXODWLRQVRI/HQLQ·VZRUGVWKRXJKWVDQGIDFWVRIKLVOLIH7KLVDS SURDFKDOORZHGIRU´/HQLQLVPµWRDSSHDUDVWKHIRXQGDWLRQDODKLVWRULFDO XQFKDQJLQJ7UXWK³DNLQGRIWUXWKWKDWZDVDQFKRUHGRXWVLGHRIWKH6RYLHW SROLWLFDOSURFHVVDQGIXQFWLRQHGDVWKHOHJLWLPDWHVRXUFH RIWKHSDUW\·VDF WLRQVLQVWHDGRIEHLQJDSURGXFWRILWVDUELWUDU\PDQLSXODWLRQV :  LWKWKHGHPLVHRIWKHSDUW\WKH&RPPXQLVWSURMHFWDQGWKH6RYLHWSRO LW\LQ/HQLQ·VERG\EHFDPHVHYHUHGIURPWKLVFRPSOH[SROLWLFDOV\VWHP DQGORVWLWVUROHLQWKHV\VWHPRIVRYHUHLJQW\7KHQHZ5XVVLDQVWDWHQHLWKHU FORVHGWKH0DXVROHXPQRUSDLGPXFKDWWHQWLRQWRLW,QWKHSDVWWZHQW\ϮYH \HDUVLWKDVGHIHUUHGDQ\GHFLVLRQRQWKHIDWHRI/HQLQ·VERG\$QGDOWKRXJK WRGD\/HQLQ·VERG\UHPDLQVRQSXEOLFGLVSOD\DQGWKHODEFRQWLQXHVLWVZRUN WKHERG\FRQWLQXHVWRH[LVWPRVWO\E\LQHUWLD³WKHLQHUWLDRIVWDWHLQVWLWX WLRQV KLVWRULFDO LPDJLQDWLRQ DQG VFLHQWLϮF SUDFWLFH ,Q WKLV FRQWH[W RQH WKLQJKDVEHFRPHFOHDUIRUPDQ\VFLHQWLVWVRIWKHODEWKLVSURMHFWKDVORQJ FRQVWLWXWHGϮUVWDQGIRUHPRVWDXQLTXHVFLHQWLϮFH[SHULPHQW7KHLUVFLHQFH KDVFUHDWHGDERG\WKDWKDVQHYHUEHHQVWDWLFDQGSUHVHUYHGLQDϮ[HGVWDWH EXWKDVEHHQG\QDPLFFKDQJLQJDQGHPHUJLQJ7KHFROODSVHRIWKH6RYLHW SROLW\GLGQRWDXWRPDWLFDOO\VSHOOWKHHQGRIWKLVHPERGLHGPRPHQWXPGLG QRWWXUQWKLVERG\LQWRDFRUSVHDQGGLGQRWUHGXFHLWWRDQHϲ J\ 1RWHV   2OJD9HOLNDQRYD7KH3XEOLF3HUFHSWLRQRIWKH&XOWRI/HQLQ%DVHGRQ$UFKLYDO0DWHUL DOV /HZLVWRQ1<(GZLQ0HOOHQ3UHVV    ´&OHRSDWUDµ  ,QWKHWUDQVODWLRQRIWKLVVWDQ]D,GUHZRQ$QGUH\.QHOOHU·V YHUVLRQEXWFKDQJHGLWWREHFORVHUWRWKHRULJLQDO$OH[DQGHU%ORN7KH6WUDQJHU 6HOHFWHG3RHWU\WUDQV$QGUH\.QHOOHU QS&UHDWH6SDFH  >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576   9HUD,QEHU´3LDW·QRFKHLLGQHLµLQ/HQLQ6ERUQLNGOLDUDERFKLNK 9ODGLPLU9ODG LPLUVNRHNQLJRL]GDWHO·VWYR QS WUDQVODWLRQPLQH    2PU\5RQHQ´/HNVLFKHVNLHLULWPRVLQWDNWLFKHVNLHSRYWRUHQLLDL¶QHNRQWUR OLUXHP\LSRGWHNVW·೒µ,]YHVWLLD5$1VHULLDOLWHUDWXU\LLD]\NDQR  ²   ']HU]KLQVN\GLUHFWHGWKH&K.DQGWKHQ*38 SUHGHFHVVRUVRIWKH.*%    ´'HQXQFLDWLRQZULWWHQE\(3DYORYDµTXRWHGLQ$OH[DQGU.KLQVKWHLQ7DLQ\/X ELDQNL 0RVFRZ2/0$0HGLD*UXSS    /RXLV)LVFKHU7KH/LIHRI/HQLQ 1HZ<RUN+DUSHU    &DOYLQ6LPV´(YD3HURQ·V&RUSVH&RQWLQXHVWR+DXQW$UJHQWLQDµ1HZ<RUN7LPHV -XO\   )5RVHQ´%HQWKDP-HUHP\ ² µ2[IRUG'LFWLRQDU\RI1DWLRQDO%LRJUDSK\ 2[IRUG2[IRUG8QLYHUVLW\3UHVV KWWSZZZR[IRUGGQEFRPYLHZDUWLFOH    1LFKRODV-%RRWK´$&RQVHUYDWLRQ,QVSHFWLRQRI-HUHP\%HQWKDP·V0XPPLϮHG +HDGµ8&/0XVHXPVDQG&ROOHFWLRQV%ORJ6HSWHPEHUKWWSVEORJVXFO DFXNPXVHXPVMHUHP\EHQWKDPVPXPPLϮHGKHDG   0DRKDGSXEOLFO\YRLFHGKLVZLVKWRKDYHKLVERG\FUHPDWHGVRWKH3ROLWEXUR GHFLVLRQWRSUHVHUYHLWFDPHDVDVXUSULVH   /L=KLVXL7KH3ULYDWH/LIHRI&KDLUPDQ0DR 1HZ<RUN5DQGRP+RXVH    0RQLFD+HVVH´6WLϸ&KDOOHQJH+RZ.LP-RQJ,ODQG2WKHU/HDGHUV-RLQWKH 5DQNVRIWKH3UHVHUYHGµ:DVKLQJWRQ3RVW-DQXDU\   ,O\D=EDUVN\´2W5RVVLLGR5RVVLL YRVSRPLQDQLLDXFKHQRJR µLQ3RG´NU\VKHLµ 0DY]ROHLDHG9LNWRU6RORXNKLQDQG,O\D=EDUVN\ 7YHU·3ROLQD ² =EDUVN\ZRUNHGDWWKH/HQLQ0DXVROHXPIURPWR   <XULL5RPDNRY´'YRLQLNRY/HQLQDYE\YVKHLODERUDWRULLSUL0DY]ROHHQHWµLQ WHUYLHZIRU´(NKR0RVNY\µUDGLRVWDWLRQ'HFHPEHUKWWSZZZHFKR PVNUXQHZVKWPO   ´/HQLQVNLLUDVFKHWµ9ODVW· -XO\    $QQD1DGH]KGLQD´90DY]ROHHOH]KLWQH,O·LFK"µ(NVSUHVVJD]HWD 0D\    7KH´ZHWµLQWHUQDORUJDQVWKDWDUHPRVWVXVFHSWLEOHWRGHFRPSRVLWLRQ³ERZ HOVNLGQH\VOLYHUOXQJVKHDUWEUDLQHWF³ZHUHWDNHQRXWRIWKHERG\GXULQJ WKHLQLWLDOWHPSRUDU\HPEDOPLQJLQ-DQXDU\   %RULV5DYGLQ´,VWRULLDRGQRLEROH]QLµ=QDQLHVLOD $SULO    2Q']HU]KLQVN\VHHQRWHDERYH3HWU6PLGRYLFKZDVDPHPEHURIWKH&HQWUDO ([HFXWLYH&RPPLWWHHRIWKH%ROVKHYLNSDUW\   /HWWHU RI WKH &HQWUDO &RPPLWWHH VHFUHWDU\ /¬ 3 6HUHEULDNRY WR 3HRSOH·V &RPPLVVDURQ6RFLDO:HOIDUH$¬19LQRNXURY-XO\TXRWHGLQ<XULL )HO·WLVKLQVNLL´7DLQDVPHUWL/HQLQDµ5RVVLLDLVRYUHPHQQ\LPLUQR   ²   5DYGLQ ´,VWRULLD RGQRL EROH]QLµ $¬ , =HYHOHY ´3R SRYRGX VWDW·L <X* )HO·VKWLQVNRJR¶7DLQDVPHUWL/HQLQD·೒µ9RUSRV\,VWRULL     4XRWHG LQ 9 /HO·FKXN DQG 9 6WDUWVHY ´8URNL GYXNK SXEOLNDWVLLµ =QDQLHVLOD 1RYHPEHU   5DYGLQ´,VWRULLDRGQRLEROH]QLµ²   /¬(*RUHORYD´,VWRULFKHVNRHUDVVOHGRYDQLHµ5XVVNLLPHGLWVLQVNLL]KXUQDO  QR $SULO KWWSZZZUPMUXDUWLFOHVBKWP >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1   %HQQR(QQNHU)RUPLURYDQLHNXO·WD/HQLQDY6RYHWVNRP6RLX]H 0RVFRZ52663(1     0LNKDLO *RUEDFKHY FODLPHG WKDW WKH WHUP ´/HQLQLVPµ ZDV ϮUVW FRLQHG E\ WKH 0HQVKHYLNV %ROVKHYLNULYDOVDPRQJVRFLDOLVWV WRULGLFXOH/HQLQ·VLGHDV 0¬6*RUEDFKHY´6ORYRR/HQLQHSUH]LGHQWD6665JHQHUDO·QRJRVHNUHWDULD WVHQWUDO·QRJRNRPLWHWD.3660¬6*RUEDFKHYDµ3UDYGD$SULO%XW1LQD 7XPDUNLQDUJXHVIRUDGLϸHUHQWRULJLQWKHWHUPZDVLQYHQWHGE\WKH%ROVKH YLNVWKHPVHOYHVDQGϮUVWSXEOLFO\XVHGRQ-DQXDU\1LQD7XPDUNLQ/HQLQ /LYHV7KH/HQLQ&XOWLQ6RYLHW5XVVLD &DPEULGJH0$+DUYDUG8QLYHUVLW\3UHVV     (QQNHU)RUPLURYDQLHNXO·WD/HQLQD   /DWHULWEHFDPHNQRZQDVWKH´,QVWLWXWHRI0DU[LVP/HQLQLVPµ,WZDVFORVHG GRZQLQZKHQWKH6RYLHWVWDWHFROODSVHG   4XRWHGLQ7XPDUNLQ/HQLQ/LYHV   ,Q$SULOWKH&HQWUDO&RPPLWWHHPDGHDGHFLVLRQWKDWQRWRQHGRFXPHQW RUVWDWHPHQWSURGXFHGE\/HQLQFRXOGEHSXEOLVKHGLQWKHFRXQWU\ZLWKRXWEH LQJϮUVWDSSURYHGE\/HQLQ,QVWLWXWH7KHSDUW\·VPRQRSRO\RQ/HQLQLVWGLV FRXUVHEHFDPHFRPSOHWH   7KLVSURFHVVLVLOOXVWUDWHGE\WKHIDWHRIVHYHUDOGRFXPHQWVZKLFK/HQLQGLF WDWHGLQ'HFHPEHU²-DQXDU\DQGZKLFKDUHNQRZQDV/HQLQ·V´/HWWHU WRWKH&RQJUHVVµ7KHOHWWHUZDVDGGUHVVHGWRWKHGHOHJDWHVRIWKH7KLUWHHQWK 3DUW\&RQJUHVVVFKHGXOHGWRPHHWLQ6SULQJ/HQLQZDUQHGWKHGHOHJDWHV RIWKHDXWKRULWDULDQWHQGHQFLHVRIVHYHUDOSDUW\OHDGHUVLQFOXGLQJ7URWVN\DQG HVSHFLDOO\6WDOLQ,Q0D\IRXUPRQWKVDIWHU/HQLQ·VGHDWKWKHOHWWHUZDV UHDGWRWKHGHOHJDWHVRIWKH7KLUWHHQWK&RQJUHVV+RZHYHULWZDVVRRQVXS SUHVVHGRQ6WDOLQ·VRUGHUVDQGQHYHUDSSHDUHGLQWKHSXEOLVKHGWUDQVFULSWRI WKH&RQJUHVV:KHQ6WDOLQEHFDPHWKHSDUW\·VVLQJXODUOHDGHULQWKHHDUO\V /HQLQ·V OHWWHU ZDV DFFXVHG RI EHLQJ D IRUJHU\ SURGXFHG E\ WKH HQHPLHV WR XQGHUPLQHWKHSDUW\XQLW\,WZDVEULHϰ\GLVFXVVHGLQZKHQ.KUXVKFKHY GHQRXQFHG6WDOLQ·VFXOWDIWHU6WDOLQ·VGHDWKEXWLWUHPDLQHGXQNQRZQWRWKH ZLGHU6RYLHWSXEOLFXQWLOZKHQSHUHVWURLNDUHIRUPVH[SRVHGPDQ\6RYLHW VHFUHWV1¬.*XO·ELQVNLL´.OHWLLXVRGQLDUR]KGHQLLD9ODGLPLUD,O·LFKD /HQLQDµ2JRQHN     6HH $OH[HL <XUFKDN ´(VOL E\ /HQLQ E\O ]KLY RQ E\ ]QDO FKWR GHODW· JRODLD ]KL]Q·YR]KGLDµ1HZ/LWHUDU\5HYLHZ  ²DQG´,I/HQLQ:HUH$OLYH 7RGD\+H:RXOG.QRZ:KDWWR'RµLQ5XVVLDQV5HPHPEHUD7XUQLQJ3RLQW HG,ULQD3URNKRURYD /RQGRQ0DF/HKRVH3UHVV    *RUEDFKHY´6ORYRR/HQLQHµ   9 0HO·QLFKHQNR ´9HUD QDGH]KGD /HQLQµ 5 DERFKDLD WULEXQD 'HFHPEHU     5.RVRODSRY´2VWRUR]KQRPDUW\VKL]Pµ/HQLQJUDGVNDLD3UDYGD'HFHPEHU    5DYGLQ´,VWRULLDRGQRLEROH]QLµ   5HPHPEHUHG E\ )\RGRU %XUODWVN\ D IRUPHU DGYLVHU DQG VSHHFKZULWHU WR .KUXVKFKHYDQG$QGURSRY6HH%XUODWVN\9R]KGLLVRYHWQLNL 0RVFRZ3ROLWL] GDW  >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576   &RPPHQWE\9RURE·HY´3URWRNRO]DVHGDQLLDPHGLWVLQVNRLNRPLVVLLSRVRNKUDQH QLLXWHOD9¬,/HQLQDRQPDUWDJµ5RVVLLVNLLJRVXGDUVWYHQQ\LDUNKLY VRWVLDO·QRSROLWLFKHVNRLLVWRULL 5*$63, >5XVVLDQ6WDWH$UFKLYHRI6RFLRSROLWL FDO+LVWRU\0RVFRZ@IRSVSDSNDHGNU7KHODFNRIXQFXWDUWHULHV LQ/HQLQ·VERG\FRQVWLWXWHGDVXEVWDQWLDOSUREOHPIRUWKH0DXVROHXPODELQWKH IROORZLQJ \HDUV IRUFLQJ WKH VFLHQWLVWV WR GHYHORS DOWHUQDWLYH PHWKRGV IRU GHOLYHULQJHPEDOPLQJOLTXLGV   7XPDUNLQ/HQLQ/LYHV   6HHHJ´$NW1RIWKHH[WHUQDOH[DPLQDWLRQRI9¬,/HQLQ8O·LDQRYµ )HEUX DU\ 5*$63,IRSFHGNKU   ´3URWRNROSRRVPRWUXWHOD9,/HQLQDµ 0DUFK 5*$63,IRSF HGNKU   7XPDUNLQ/HQLQ/LYHV(QQNHU)RUPLURYDQLHNXO·WD/HQLQD   (QQNHU)RUPLURYDQLHNXO·WD/HQLQD   ´=DVHGDQLH WVHQWUDO·QRL .RPLVVLL 3UH]LGLXPD 7VHQWUDO·QRJR ,VSROQLWHO·QRJR .RPLWHWDµ 0DUFK 5*$63,IRSFHGNKU   6WDWHPHQWRIWKH´&RPPLVVLRQIRUWKH2UJDQL]DWLRQRI/HQLQ·V)XQHUDOµ0DUFK TXRWHGLQ7XPDUNLQ/HQLQ/LYHV   ´=DVHGDQLH .RPLVVLL 7VHQWUDO·QRJR ,VSROQLWHO·QRJR .RPLWHWDµ -XO\    DSSHQGL[WRSURWRFROQR5*$63,HGNKUSDSND1VWU   ´,VWRULLDEDO·]DPLURYDQLLDWHOD9,/HQLQDµ -XO\ 5*$63,IRS SOHQND1   7KHUHIHUHQFHWRD´UHOLFµDQGWKHGHQLDOWKDWWKLVERG\ZDVRQHHPSKDVL]HG WKLVSRLQW,QWKHFDVHRI&KULVWLDQUHOLFVLWLVFUXFLDOWKDWWKHDXWKHQWLFELRORJL FDOVXEVWDQFHRIWKHSHUVRQ VDLQW LVSUHVHUYHGZKLOHIRU/HQLQ·VERG\DVZH ZLOOVHHELRORJLFDOVXEVWDQFHLVRIVHFRQGDU\LPSRUWDQFH6HH<XUFKDN´,I/HQLQ :HUH$OLYHµ   ´0DY]ROHL/HQLQDVQRYDRWUNRHWVLDGOLDSRVHVKFKHQLLDLDQYDULDJRGDµ 1HZVUXFRP'HFHPEHUZZZQHZVUXFRPUXVVLDGHFOHQLQ KWPO   <XULL/RSXNKLQLQWHUYLHZZLWKDXWKRU0RVFRZ$XJXVW/RSXNKLQZRUNHG LQWKHODEIURPWKHODWHVWRWKHODWHVDQGWRGD\GHVSLWHROGDJHUH PDLQVRQHRIWKHODE·VUHJXODUFRQVXOWDQWV   /RSXNKLQLQWHUYLHZ0RVFRZ2FWREHU   9ODGLVODY.R]HO·WVHYLQWHUYLHZZLWKDXWKRU0RVFRZ-XO\   7KHFRPPLVVLRQVLQFOXGHGWHQWRWZHQW\SHRSOHPHPEHUVRIWKHSDUW\OHDGHU VKLSDQGOHDGLQJPHGLFVDQGELRFKHPLVWV   /HQLQ·VERG\ZDVFDUULHGLQDQRSHQFRϲ QIURPWKH*RUNLHVWDWHWRDQHDUE\ UDLOZD\VWDWLRQLQDWHPSHUDWXUHFORVHWR੒ƒ&   ´3URWRNRO]DVHGDQLLDNRPLVVLL1DUNRP]GUDYD6RLX]D665SRRVPRWUXWHOD9¬, /HQLQDVRVWRLDYVKHJRVLDJRLDQYDULDJRGDY0DY]ROHHµ5*$63,I RSG1FRPPHQWVE\1LNRODL%XUGHQNRDQG$¬$'HVKLQ   ,ELGFRPPHQWVE\%XUGHQNRDQG$OH[HL%XVDORY   ´'RNODG]DVOX]KHQQRJRGHLDWHOLDQDXNLSURIHVVRUD%¬,=EDUVNRJRQRLDEULD JRGDµ5*$63,IRSVSDSNDHGNU   ,ELG >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1   ´3URWRNRO]DVHGDQLLD.RPLVVLLREUD]RYDQQRLVRJODVQRUDVSRULD]KHQLLX61. 66651VSRRVPRWUXWHOD/HQLQDVRVWRLDYVKHPXVLDLLL XOLDJYJRURGH7LXPHQLµ5*$63,IRSFSDSNDHGNU   (UQVW.DQWRURZLF]7KH.LQJ·V7ZR%RGLHV 3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV     7KHVSDWLDOGLPHQVLRQRIVRYHUHLJQW\KDVEHHQPXFKGLVFXVVHGLQUHFHQW\HDUV XQOLNHLWVWHPSRUDOVLGH6HH&DUO6FKPLWW3ROLWLFDO7KHRORJ\)RXU&KDSWHUVRQWKH &RQFHSWRI6RYHUHLJQW\WUDQV*HRUJH6FKZDE &KLFDJR8QLYHUVLW\RI&KLFDJR 3UHVV DQG*LRUJLR$JDPEHQ+RPR6DFHU 6WDQIRUG6WDQIRUG8QLYHUVLW\ 3UHVV    .DQWRURZLF].LQJ·V7ZR%RGLHV²   5DOSK(*LHVH\7KH5R\DO)XQHUDO&HUHPRQ\LQ5HQDLVVDQFH)UDQFH *HQHYD'UR]  (OLDV%LFNHUPDQQ&RQVHFUDWLR/HFXOWHGHVVRXYHUDLQVGDQVO·HPSLUHURPDLQ *HQHYD(QWUHWLHQV+DUGW;,; DQG$JDPEHQ+RPR6DFHUDOOPDNH WKLVREVHUYDWLRQLQWKHFRQWH[WRIDQFLHQW5RPDQIXQHUDOV   7KHHϲ J\IRU+HQU\9,, GLHGLQ ZDVPRGHOHGRQKLVGHDWKPDVNZLWKVXFK GHJUHHRISUHFLVLRQWKDWHYHQ´WKHVOLJKWO\GURRSLQJOHIWVLGHRIWKHPRXWKIDLWK IXOO\UHSURGXFH>G@WKHSK\VLFDOFRQWRUWLRQVRIWKHNLQJ·VIDWDOVWURNHµ-XOLDQ /LWWHQ´7KH)XQHUDO(ϲ J\,WV)XQFWLRQDQG3XUSRVHµLQ7KH)XQHUDO(ϲ JLHVRI :HVWPLQVWHU$EEH\HG$QWKRQ\+DUYH\DQG5LFKDUG0RUWLPHU :RRGEULGJH %R\GHOO ²:KHQ4XHHQ(OL]DEHWKGLHGLQWKHIDFHRIWKHHI ϮJ\WKDWZDVPRGHOHGRQKHUGHDWKPDVNFRQWDLQHGPHWLFXORXVO\UHSURGXFHG ´ZULQNOHVDQGRWKHUIHDWXUHVRIDJHLQJµ-HQQLIHU:RRGZDUG7KH7KHDWUHRI'HDWK :RRGEULGJH%R\GHOO    .DQWRURZLF].LQJ·V7ZR%RGLHV*LHVH\5R\DO)XQHUDO&HUHPRQ\5DOSK( *LHVH\´)XQHUDO(ϲ JLHVDV(PEOHPVRI6RYHUHLJQW\(XURSHWR&HQWXULHVµ OHFWXUHGHOLYHUHGWRWKH&ROOqJHGH)UDQFH-XQH ZZZUHJLHVH\FRP /HFWXUHV)XQHUDOB(ϲ JLHVBDVB(PEOHPVBRIB6RYHUHLJQW\B/HFWXUHB>(QJOLVK@ B&ROOHJHBGHB)UDQFHSGI   *LHVH\5R\DO)XQHUDO&HUHPRQ\   5LFKDUG0RUWLPHU´7KH+LVWRU\RIWKH&ROOHFWLRQµLQ+DUYH\DQG0RUWLPHU )XQHUDO(ϲ JLHVRI:HVWPLQVWHU$EEH\²   6HHWKHGLVFXVVLRQRIWKLVSDUDOOHOLVPLQ'DYLG*UDHEHU´7KH'LYLQH.LQJVKLS RIWKH6KLOOXN2Q9LROHQFH8WRSLDDQGWKH+XPDQ&RQGLWLRQRU(OHPHQWVIRU DQ$UFKDHRORJ\RI6RYHUHLJQW\µ+$8-RXUQDORI(WKQRJUDSKLF7KHRU\QR   ²DQG%XUKDUG6FKQHSHO7ZLQQHG%HLQJV.LQJVDQG(ϲ JLHVLQ6RXWKHUQ6XGDQ (DVW,QGLDDQG5HQDLVVDQFH)UDQFH *|WHERUJ,$66$    6FKQHSHO7ZLQQHG%HLQJV   7KHERG\RIWKHHPSHURULQPRGHUQ-DSDQZDVYLHZHGDV´D¶UHFHSWDFOH· LUH PRQR IRUWKHLPPXWDEOH¶LPSHULDOVSLULW· WHQQRUHL WKDWDWWDFKHGLWVHOIWRHDFK QHZHPSHURUDQGZDVWKHVRXUFHRIWKHHPSHURU·VH[WUDRUGLQDU\DXWKRULW\µ 7DNDVKL)XMLWDQL6SOHQGLG0RQDUFK\3RZHUDQG3DJHDQWU\LQ0RGHUQ-DSDQ %HUNHOH\ 8QLYHUVLW\RI&DOLIRUQLD3UHVV    $ZD[Hϲ J\RIWKH5RPDQHPSHURU$QWRQLXV VHFRQGFHQWXU\&( GXULQJWKH IXQHUDU\SHULRGORRNHGOLNHWKHHPSHURUZRUHKLVFORWKHVDQGOD\LQKLVEHG %LFNHUPDQQTXRWHGLQ$JDPEHQ+RPR6DFHU 6HHDOVR$OHߖ&KDOXSD´+RZ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576 'LG5RPDQ(PSHURUV%HFRPH*RGV"µ$QRGRV6WXGLHVRIWKH$QFLHQW:RUOG ² ² ²DQG-Dߓ(OVQHU,PSHULDO5RPHDQG&KULVWLDQ7ULXPSK 2[IRUG 2[IRUG8QLYHUVLW\3UHVV ²   7KHSULQFLSOHRISDSDOVRYHUHLJQW\XQOLNHWKDWRIPRQDUFK\LVQRWG\QDVWLF ZKLFKLVZK\WKHWKHRU\RIWKHSRSH·VWZRERGLHVQHYHUGHYHORSHG:KDWVXU YLYHVWKHGHPLVHRIHDFKSRSHLVWKH´DEVHQWSUHVHQFHµRIWKHHWHUQDOSDSDF\ LQYHVWHGQRWLQDSRSH·VHϲ J\EXWLQSHUSHWXDOREMHFWVDQGULWXDOVSHUIRUPHG GXULQJWKHQRYHQD LQWHUUHJQXP $JRVWLQR3DUDYLFLQL%DJOLDQL7KH3RSH·V%RG\ &KLFDJR8QLYHUVLW\RI&KLFDJR3UHVV *LOEHUW21DWLRQV3DSDO6RYHUHLJQW\ &LQFLQQDWL6WDQGDUG3XEOLVKLQJ    7KHUHDVRQIRUWKLVZDVWKDWWKH5XVVLDQPRQDUFKLFVWDWHKDGQRWXQGHUJRQH WKHVDPHVHFXODUL]DWLRQWKDWKDSSHQHGLQ(QJODQGDQG)UDQFH0LFKDHO&KHU QLDYVN\7VDUDQG3HRSOH6WXGLHVLQ5XVVLDQ0\WKV 1HZ+DYHQ<DOH8QLYHUVLW\ 3UHVV    &ODXGH/HIRUW´7KH4XHVWLRQRI'HPRFUDF\µ'HPRFUDF\DQG3ROLWLFDO7KHRU\ 0LQ QHDSROLV8QLYHUVLW\RI0LQQHVRWD3UHVV ²&ODXGH/HIRUW´7KH,PDJH RIWKH%RG\DQG7RWDOLWDULDQLVPµLQ7KH3ROLWLFDO)RUPVRI0RGHUQ6RFLHW\ &DP EULGJH0$0,73UHVV ²%HUQDUG)O\QQ7KH3KLORVRSK\RI&ODXGH/HIRUW &KLFDJR1RUWKZHVWHUQ8QLYHUVLW\3UHVV [LLL²[[[   (ULF6DQWQHU7KH5R\DO5HPDLQV7KH3HRSOH·V7ZR%RGLHVDQGWKH(QGJDPHVRI6RYHU HLJQW\ &KLFDJR8QLYHUVLW\RI&KLFDJR3UHVV ²   7KHRSHQLQJZRUGVRIWKH86'HFODUDWLRQRI,QGHSHQGHQFH´ZHKROGWKHVH WUXWKVWREHVHOIHYLGHQWµUHIHUWRWKHSROLWLFDOV\VWHP·VIRXQGDWLRQDOWUXWKV WKDWDUHSULRUWRWKLVV\VWHPDQGFDQQRWEHSURYHQLQLWVSROLWLFDOODQJXDJH7R EHVHHQDVOHJLWLPDWHHYHU\86SROLWLFLDQPXVWWUHDWWKHVHWUXWKVDVDSULRUL XQTXHVWLRQDEOH   /HIRUWDUJXHVWKDWLIWKHOHDGHULQDOLEHUDOGHPRFUDF\UHRFFXSLHGWKH´HPSW\ SODFHµRIVRYHUHLJQSRZHUGHPRFUDF\ZRXOGVOLGHLQWR´WRWDOLWDULDQLVPµ7KLV KDSSHQHGDFFRUGLQJWRKLPLQ*HUPDQ\XQGHU+LWOHUDQGLQWKH6RYLHW8QLRQ XQGHU6WDOLQ /HIRUW´,PDJHRIWKH%RG\µ +RZHYHUZKLOH/HIRUWLVULJKWDERXW 1D]L*HUPDQ\ZKHUHWKH)KUHU·VERG\LQGHHGFRLQFLGHGZLWKWKHFHQWHURIVRY HUHLJQSRZHU VHH.HQ-RZLWW1HZ:RUOG'LVRUGHU7KH/HQLQLVW([WLQFWLRQ>%HUNH OH\8QLYHUVLW\RI&DOLIRUQLD3UHVV@² KLVDVVHVVPHQWRIWKHOHDGHU·VSR VLWLRQLQWKH6RYLHW8QLRQLVLQDFFXUDWH   6WDOLQZDVFODLPHGWREH´WKH*UHDWLQKHULWRU>SURGRO]KDWHO·@RI/HQLQ·VFDXVHµ UDWKHUWKDQWKHRULJLQDWRURIDGLϸHUHQWFDXVH6WDOLQGHSHQGHGRQ´/HQLQµDV WKHVRXUFHRIKLVRZQOHJLWLPDF\DQGFRXOGQRWVXSHUVHGH´/HQLQµDVWKHORFXV RI7UXWKFRQWUDU\WRDZLGHVSUHDGDUJXPHQW³VHHHJ-DQ3ODPSHU7KH6WDOLQ &XOW$6WXG\LQWKH$OFKHP\RI3RZHU 1HZ+DYHQ<DOH8QLYHUVLW\3UHVV  )RUDGLVFXVVLRQVHH$OH[HL<XUFKDN(YHU\WKLQJ:DV)RUHYHU8QWLO,W:DV1R0RUH 7KH/DVW6RYLHW*HQHUDWLRQ 3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV FKDS DQG(WRE\ORQDYVHJGDSRNDQHNRQFKLORVSRVOHGQHHVRYHWVNRHSRNROHQLH 0RVFRZ 1RYRHOLWHUDWXUQRHRER]UHQLH    <XUFKDN´(VOLE\/HQLQE\O]KLYµDQG´,I/HQLQ:HUH$OLYHµ   %XWXQOLNH+LWOHULQ1D]L*HUPDQ\   -RZLWW1HZ:RUOG'LVRUGHU² >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM 5(728&+,1*7+(629(5(,*1   )RUDPDMRUVKLIWLQWKHLQWHUSUHWDWLRQRIWKHGRFWULQHDIWHU6WDOLQ·VGHDWKDV WKH´SHUIRUPDWLYHVKLIWµRILGHRORJLFDOGLVFRXUVHVHH<XUFKDN(YHU\WKLQJ:DV )RUHYHUFKDSDQG(WRE\ORQDYVHJGD)RUWKHFULVLVRIGRFWULQHLQODWHSHUH VWURLNDVHH<XUFKDN´,I/HQLQ:HUH$OLYHµ   -RVHSK1\RPDUNH\´)DFWLRQDOLVPLQWKH1DWLRQDO6RFLDOLVW*HUPDQ:RUNHUV· 3DUW\²7KH0\WKDQG5HDOLW\RIWKH¶1RUWKHUQ)DFWLRQ·೒µ3ROLWLFDO6FL HQFH4XDUWHO\QR     ,QFRQWUDVWLQWKH1D]LV\VWHPWKHUHZDVQRH[WHUQDOϮJXUHRI7UXWKWKDWFRXOG EHXVHGWRGHOHJLWLPL]H+LWOHUIRUYLRODWLQJWKHVSLULWRI´WUXH1D]LVPµ6HH &KULVWRSKHU +LWFKHQV 8  QDFNQRZOHGJHG /HJLVODWLRQ :ULWHUV LQ WKH 3XEOLF 6SKHUH /RQGRQ9HUVR DQG6ODYRMঢLঈHN´%DUEDULVPZLWKD+XPDQ)DFHµ /RQGRQ5HYLHZRI%RRNVQR  ²   ,QKLV´6HFUHW6SHHFKµDWWKH7ZHQWLHWK3DUW\&RQJUHVVLQ.KUXVKFKHY VDLG ´:H VKDUSO\ FULWLFL]H WRGD\ WKH FXOW RI WKH LQGLYLGXDO ZKLFK ZDV VR ZLGHVSUHDGGXULQJ6WDOLQ·VOLIH¬¬¬ZKLFKLVVRDOLHQWRWKHVSLULWRI0DU[LVP /HQLQLVPµ´1LNLWD6.KUXVKFKHY7KH6HFUHW6SHHFK³2QWKH&XOWRI3HUVRQ DOLW\µ,QWHUQHW0RGHUQ+LVWRU\6RXUFHERRNKWWSOHJDF\IRUGKDPHGXKDOVDOO PRGNKUXVKFKHYVHFUHWKWPO   7KH2FWREHUGHFLVLRQRIWKHSUHVLGLXPRIWKH&HQWUDO&RPPLWWHHOD FRQLFDOO\WLWOHG´2Q&RPUDGH.KUXVKFKHY1¬6µVWDWHG´$VDUHVXOWRIWKHPLV WDNHVDQGZURQJDFWLRQVRI&RPUDGH.KUXVKFKHYWKDWYLRODWHWKH/HQLQLVWSULQ FLSOHRIFROOHFWLYHOHDGHUVKLSDQXWWHUO\XQKHDOWK\VLWXDWLRQKDVGHYHORSHGLQWKH 3UHVLGLXPRIWKH&&µ5RVVLLVNLLJRVXGDUVWYHQQ\LDUNKLYQDWVLRQDO·QRLLVWRULL 5*$1, >5XVVLDQ6WDWH$UFKLYHRI1DWLRQDO+LVWRU\0RVFRZ@IRSG O HPSKDVLVDGGHG 7KHVWDWHPHQWZDVDVXQVXEVWDQWLDWHGDVLWZDVGDPQ LQJ.KUXVKFKHYKDGYLRODWHG/HQLQLVP$IWHUWKDWSRLQWDOORWKHUDUJXPHQWV ZHUHVXSHUϰXRXV   6RPHWHVWVRFFXULQWKH&HQWHUIRU6FLHQWLϮF5HVHDUFKRQ.UDVLQ6WUHHWLQ0RV FRZ2WKHUVDUHFRQGXFWHGLQYDULRXVPHGLFDOLQVWLWXWHVDURXQG0RVFRZ$ ZKROHQHWZRUNRIUHVHDUFKLQVWLWXWHVLVUHJXODUO\LQYROYHGLQWKLVRQJRLQJZRUN /RSXNKLQLQWHUYLHZ2FWREHU   $FFRUGLQJWRLQWHUYLHZVZLWKWKHODEVFLHQWLVWV6HHDOVRLQWHUYLHZZLWKDSKRWR WHFKQLFLDQLQ3DYHO/RENRY·VϮOP0DY]ROHL 179WHOHYLVLRQFKDQQHO    .R]HO·WVHYLQWHUYLHZ   /RSXNKLQLQWHUYLHZ-XO\0RVFRZ   6RPHDVSHFWVRIWKLVZRUNDUHGHVFULEHGLQ<XULL0/RSXNKLQDQG%¬0&KHN QHY´%LRFKHPLFDO$VVHVVPHQWRIWKH9LDELOLW\RI&DGDYHU.LGQH\3UHVHUYDWLRQ RI.LGQH\ZLWKWKH8VHRI+\SRWKHUPLDDQG+\SHUEDULF2[\JHQDWLRQµ-RXUQDO RI8URORJ\DQG1HSKURORJ\  ²   7KHZRUNDOVRLQYROYHGVSHFLDOLVWVIURPWKHGHSDUWPHQWRIWKHUDS\DW0RVFRZ·V 6HFKHQRY0HGLFDO8QLYHUVLW\   /RSXNKLQLQWHUYLHZV2FWREHUDQG-XO\   <X0/RSXNKLQ´7KH6NLQDQG$WKHURVFOHURVLV D7KUHH'URS7HVW µ3K\VLR FKHPLFDO$VSHFWVRI0HGLFLQH5HYLHZV 6RYLHW0HGLFDO5HYLHZV6HFWLRQ%    ²   6HHZZZJRRJOHFRPSDWHQWV86 >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM &28576   )RU0LUDFXOLQV·VYLVXDOLOOXVWUDWLRQRIWKH3UH9XWHVWVHHZZZSUHYXFRP86$ SUHYXKWPO   7XPDUNLQ/HQLQ/LYHV)RUDVLPLODUDUJXPHQWVHH*UDHPH*LOO´7KH6R YLHW/HDGHU&XOW5HϰHFWLRQVRQWKH6WUXFWXUHRI/HDGHUVKLSLQWKH6RYLHW8QLRQµ %ULWLVK-RXUQDORI3ROLWLFDO6FLHQFH  ²   6HHDOVR(QQNHU)RUPLURYDQLHNXO·WD/HQLQD2QDQRWKHUPDMRUGLϸHUHQFH EHWZHHQUHOLFVDQG/HQLQ·VERG\VHH$OH[HL<XUFKDN´)RUP9HUVXV0DWWHU0L UDFXORXV5HOLFVDQG/HQLQ·V6FLHQWLϮF%RG\µLQ´'HDWK'\LQJDQG0RUWDOLW\µ VSHFLDO LVVXH RI &ROOHJLXP6WXGLHV$FURVV'LVFLSOLQHVLQWKH+XPDQLWLHVDQG6RFLDO 6FLHQFHV  ²   6HHDOVR7XPDUNLQ/HQLQ/LYHV*HRUJH<RXQJ7KH5XVVLDQ&RVPLVWV7KH (VRWHULF )XWXULVP RI 1LNRODL )HGRURY DQG +LV )ROORZHUV 2[IRUG 2[IRUG 8QLYHUVLW\ 3UHVV DQG9¬$.R]KHYQLNRY2S\WL]OR]KHQLLDXFKHQLLD1¬))HGRURYDSRL]GDQ Q\PLQHL]GDQQ\PSURL]YHGHQLLDPSHUHSLVNHLOLFKQ\PEHVHGDP 0RVFRZ0\VO·   <XUFKDN´,I/HQLQ:HUH$OLYHµ >@ Brought to you by | New York University Authenticated Download Date | 2/8/18 5:09 PM