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Amicus Brief in Support of the SEC's Appeal of the District Court's Order Denying the Commission's...

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    SKTJI JTFWMGHR HKR _GR UE@GBWIGB]

    Hk. :4-7401

    OH R@G WHORGB URJRGU EKWTR KA J\\GJIU

    AKT R@G BOURTOER KA EKIWMDOJ EOTEWOR[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

    UGEWTOROGU JHB GPE@JHFG EKMMOUUOKH,\gtotokhgr-Jppgiijht,

    v.

    UGEWTOROGU OHQGURKT \TKRGEROKH EKT\KTJROKH,Tgspkhbght-Jppgiigg

    Kh Jppgji arkm t`g Whotgb Utjtgs Bostroet Ekurt akr t`g Bostroet ka EkiumdojEovoi Jetokh Hk. ::-me-160 (TIV)

    JMOEWU EWTOJGDTOGA KA R@G EKWTR-J\\KOHRGB GPJMOHGT,

    R@G KAAOEOJI URJHAKTB OHQGURKTU EKMMORRGG,

    JHB R@G URJHAKTB QOEROMU EKJIOROKH

    OH UW\\KTR KA \GROROKHGT-J\\GIIJHR

    JHB TGQGTUJI KA R@G BOURTOER EKWTRU KTBGT

    URTJUDWTFGT & \TOEG, II\

    Nk`h @gaahgrBostroet ka Ekiumdoj Djr Hk. ::2

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    o

    EGTROAOEJRG JU RK \JTROGU, TWIOHFU, JHB TGIJRGB EJUGU

    Gxegpt akr t`g jmoeo eurojgiostgb dgikw, jii pjrtogs, ohtgrvghkrs, jhb jmoeo

    jppgjrohf dgakrg t`g bostroet ekurt jhb oh t`os Ekurt jrg iostgb oh t`g Ohotoji Droga ka

    t`g Ugeurotogs jhb Gxe`jhfg Ekmmossokh, Jppgiijht>

    Nk`h N. Iottig Ekurt-Jppkohtgb Gxjmohgr(jppkohtgb dy t`g Tgegovgrs`op Ekurt

    dy krbgr bjtgb Jproi 44, 4

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    oo

    RJDIG KA EKHRGHRU

    \jfg

    Egrtoaoejtg js tk \jrtogs, Tuiohfs jhb Tgijtgb Ejsgs o

    Rjdig ka Ekhtghts oo

    Rjdig ka Jut`krotogs ov

    Fikssjry vo

    Egrtoaoejtg ka Ohtgrgstgb \grskhs jhb voooTuig 41.: Boseiksurg Utjtgmght

    Tuig 4?(e)(7) Egrtoaoejtg x

    O. R@G TKIGU KA R@GJMOEO EWTOJG> R@G GPJMOHGT, :R@G OHQGURKTU EKMMORRGG JHB R@GURJHAKTB QOEROMU EKJIOROKH

    J. R`g Gxjmohgr 4

    D. R`g Ohvgstkrs Ekmmottgg 5

    E. R`g Utjhakrb Qoetoms Ekjiotokh 7

    OO. \TOKT \TKEGGBOHFU 7

    OOO. \TGIOMOHJT_ URJRGMGHR 1

    OQ. UWMMJT_ KA R@G JTFWMGHR 6

    Q. JTFWMGHR 0

    J. Aohbohfs jhb Tuiohfs dy t`g Tgegovgrs`op Ekurt jhb 0t`g 7t`Eoreuot Ekhtrjboet t`g Ajets Tgiogb upkh Dgikw

    :. Vjs UODI sgpjrjtg jhb bostohet arkm UFE; :

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    voo

    UGE Ugeurotogs jhb Gxe`jhfg Ekmmossokh

    UFE Utjhakrb Frkup Ekmpjhy, j rgfostgrgb drkcgr-bgjigr jhb UO\E mgmdgr

    UODI Utjhakrb Ohtgrhjtokhji Djhc, Itb.

    UO\J Ugeurotogs Ohvgstkr \rktgetokh Jet ka :?6

    R@G GPJMOHGT, R@G OHQGURKTU EKMMORRGG JHB R@G

    URJHAKTB QOEROMU EKJIOROKH:

    Oh Agdrujry 4

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    4.

    Ohvgstkr \rktgetokh Ekrpkrjtokh (UO\E). Ohtgrgst jhb proheopji pjymghts wgrg

    auhbgb wot` mkhgy ohvgstgb dy sudsgqught UODI EB pure`jsgrs.

    R`g Tgegovgrs`op Ekurt akuhb fkkb ejusg tk dgiogvg t`jt t`g Utjhakrb

    Ghtotogs vokijtgb agbgrji sgeurotogs ijws. Kh Agdrujry :1, 4

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    5.

    bgtgrmohg wkuib dg `gipaui tk t`g Ekurt oh ekhsobgrohf t`g ohtgrgsts ka t`g

    ohvgstkrs oh jhy aohjheoji prkbuets, jeekuhts, vg`oeigs kr vghturgs spkhskrgb,

    prkmktgb kr skib dy jhy Bgaghbjhts oh t`os jetokh (t`g Ohvgstkrs). Tgegovgrs`op

    \rkeggbohf, Bke. Hk. 544, jt :-4 (t`g Gxjmohgr Krbgr).7

    R`g Gxjmohgr Krbgr jut`krozgb t`g Gxjmohgr tk ekhbuet sue` ohvgstofjtokh

    js `g bggms hgegssjry tk prkvobg sue` ohakrmjtokh tk t`g Ekurt, jhb tk usg jhy

    bosekvgry mgt`kbs prkvobgb oh Tuigs 41 t`rkuf` 56. Ob. jt 4. R`g Gxjmohgr

    Krbgr jisk jut`krozgb t`g Gxjmohgr tk aoig Tgpkrts jhb Tgekmmghbjtokhs wot` t`g

    Ekurt js `g s`jii sgg aot, jhb tk aoig drogas oh rgspkhsg tk jhy mktokh aoigb oh t`g

    Tgegovgrs`op \rkeggbohf. Ob.

    D. R`g Ohvgstkrs Ekmmottgg

    Kh Ugptgmdgr ?, 4

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    2.

    R`g Mkvjhts, t`g Tgegovgr, t`g Gxjmohgr, jhb t`g UGE sudsgqughtiy

    rgje`gb jh jfrggmght tk rgskivg t`g mktokh jhb ergjtg jh ohvgstkrs ekmmottgg. Kh

    Jufust :

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    7.

    E. R`g Utjhakrb Qoetoms Ekjiotokh

    R`g Utjhakrb Qoetoms Ekjiotokh (UQE) os j hkt-akr-prkaot ekrpkrjtokh

    krfjhozgb jhb gxostohf uhbgr Rgxjs ijw. Ot wjs akuhbgb dy Ms. Jhfgij U`jw

    Ckfutt, j Utjhakrb ohvgstkr rgsobohf oh Rgxjs. R`g UQE `js mkrg t`jh 2,

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    1.

    OOO. \TGIOMOHJT_ URJRGMGHR

    R`os jmoeusDroga os aoigb nkohtiy dy t`g Gxjmohgr, t`g Ohvgstkrs Ekmmottgg

    jhb t`g UQE oh suppkrt ka t`g \gtotokhgr-Jppgiijht jhb rgvgrsji ka t`g bostroet

    ekurts krbgr. Upgeoaoejiiy, t`g jmoeo sggc tk jbvosg t`os Ekurt ka aohbohfs jhb

    ruiohfs dy t`g Tgegovgrs`op Ekurt jhb t`g 7t` Eoreuot Ekurt ka Jppgjis (7t`

    Eoreuot) t`jt ekhtrjboet mjhy ka t`g ajets upkh w`oe` t`g bostroet ekurt

    jppjrghtiy rgiogb.

    Akr gjsg ka rgagrgheg, t`g jmoeo `jvg jttje`gb twk ruiohfs ka t`g

    Tgegovgrs`op Ekurt t`jt jrg hgot`gr eurrghtiy rgpkrtgb hkr jvjoijdig voj VGURIJV,

    js akiikws>

    Gx`odot :> Bke. Hk. 271 oh Njhvgy v. Jifuorg, Eovoi Jetokh Hk. 5>

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    6.

    EBs s`kuib dg bggmgb eustkmgrs ka UFE uhbgr t`g rgjskhohf ka t`g Kib Hjpigs

    jhb \romgiohgbgeosokhs.0 R`gy jisk suppkrt t`g UGEs jrfumght t`jt ot hggb khiy

    bgmkhstrjtg prkdjdig ejusg tk dgiogvg t`grg jrg eustkmgrs oh hggb ka

    prktgetokh uhbgr UO\J.

    OQ. UWMMJT_ KA JTFWMGHR

    Oh bgeobohf t`os jppgji, t`os Ekurt ejh jhb s`kuib ekhsobgr t`g aohbohfs jhb

    ruiohfs t`jt `jvg dggh mjbg dy t`g Tgegovgrs`op Ekurt jhb t`g 7t`Eoreuot kvgr t`g

    ijst akur ygjrs. Dkt` ekurts `jvg gxtghsovg gxpgrogheg wot` t`g Utjhakrb se`gmg,

    jhb dkt` ekurts `jvg mjbg aohbohfs jhb ruiohfs t`jt ijrfgiy ekhtrjboet t`g ajets

    upkh w`oe` t`g bostroet ekurt rgiogb.

    R`g aohbohfs jhb ekheiusokhs ka t`g Tgegovgrs`op Ekurt jhb t`g 7t`

    Eoreuot

    bgmkhstrjtg t`jt t`g rgjskhohf ka t`g ::t` jhb :

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    0.

    kt`gr Utjhakrb ghtotogs) ohstgjb ka dgohf usgb tk pure`jsg UODI EBs.? Rk pgrmot

    sue` j bostohetokh, ghfohggrgb dy t`g jre`otgets ka t`g se`gmg, tk ekhtrki t`g

    jppioejtokh ka UO\J wkuib ompgrmossodiy gigvjtg akrm kvgr sudstjheg.

    R`g aohbohfs jhb ekheiusokhs ka t`g Tgegovgrs`op Ekurt jhb t`g 7t`Eoreuot,

    jikhf wot` gvobgheg oh t`g rgekrb dgakrg t`g bostroet ekurt, jisk suppkrt t`g UGEs

    pksotokh t`jt ot s`kuib dg `gib khiy tk t`g sjmg prkdjdig ejusg stjhbjrb t`jt

    UO\E must mggt oh ekmmgheohf j ioquobjtokh uhbgr UO\J. V`gh ot ekmgs tk

    UFEs eustkmgrs w`k pure`jsgb UODI EBs, khg sozg bkgs hkt aot jii. R`ksg

    eustkmgrs woii dg oh j ajr dgttgr pksotokh tk gstjdios` t`gor stjtus js eustkmgrs

    uhbgr UO\J kheg j ioquobjtokh prkeggbohf os jetujiiy ekmmghegb. Whtoi sue` tomg,

    pktghtoji eijomjhts `jvg hk kppkrtuhoty tk bgmkhstrjtg t`gor rof`t tk UO\J

    prktgetokh.

    Q. JTFWMGHR

    J. Aohbohfs jhb Tuiohfs dy t`g Tgegovgrs`op Ekurt jhb t`g 7t`

    Eoreuot

    Ekhtrjboet t`g Ajets Tgiogb upkh Dgikw

    R`g Tgegovgrs`op Ekurt `js prgsobgb kvgr t`g Tgegovgrs`op \rkeggbohf akr

    jimkst akur (2) ygjrs, burohf w`oe` ot `js dgekmg ohtomjtgiy ajmoiojr wot` t`g ajets

    jhb eoreumstjhegs surrkuhbohf t`g Utjhakrb Aohjheoji Frkup \khzo se`gmg. R`grg

    ? R`g bostroet ekurt jttgmptgb tk bostohfuos` Kib Hjpigsjhb \romgiohgdy hktohf t`jt dkt` ka

    t`ksg ejsgs ohvkivgb jh ohtrkbueohf drkcgr w`k hgvgr bgpksotgb t`g eioght auhbs jt ossug wot`t`g eigjrohf drkcgr. R`os purpkrtgb bostohetokh os dkt` ohjeeurjtg (jt igjst skmg eioghtauhbs wgrg bgpksotgb wot` j eigjrohf drkcgr oh Kib Hjpigs) jhb ohsuaaoeoght tk bosqujioayUFE eustkmgrs arkm dgohf eustkmgrs oh hggb ka prktgetokh uhbgr UO\J. Uggoharj jt 44.

    WUEJ Ejsg #:4-7401 Bkeumght #:2:14

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    ?.

    jrg hkw mkrg t`jh :

    :< Mjhy ka t`gsg jetokhs `jvg dggh trjhsagrrgb tk t`g Tgegovgrs`op Ekurt akr prgtroji

    ekkrbohjtokh dy t`g Nuboeoji \jhgi kh Muitobostroet Iotofjtokh. Ugg fghgrjiiy,Oh rg UtjhakrbGhtotogs Ugeurotogs Iotofjtokh, MBI Hk. 4

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    :

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    ::.

    R`g Tgegovgr `js s`kwh t`jt Utjhakrb kpgrjtgb t`g ghtorg hgtwkrcka Utjhakrb Ghtotogs js jh ohtgfrjtgb uhot oh krbgr tk pgrpgtrjtg jmjssovg wkribwobg arjub. Rk ofhkrg t`gsg aohbohfs wkuib gigvjtg

    akrm kvgr sudstjheg t`grgdy igfotomozohf t`g ekrpkrjtg strueturg

    t`jt Utjhakrb utoiozgb tk pgrpgtrjtg `os arjubjhb ruhhohf jakui kaAoat` Eoreuot prgegbght ejutokhohf ekurts tk ikkc dgykhb t`gsurajeg. R`us, dgejusg SUODI] bob hkt kdsgrvg ekrpkrjtgakrmjiotogs jhb dgejusg jii t`g Utjhakrb ghtotogs wgrg kpgrjtgb jskhg akr purpksgs ka pgrpgtrjtohf j arjub kh ohvgstkrs Seotjtokhkmottgb], t`g Ekurt pogregs SUODIs] ekrpkrjtg vgoi jhb jffrgfjtgst`g Utjhakrb Ghtotogs.

    E`jptgr :7 Krbgr jt 51 (gmp`jsos jbbgb). R`g UGE jrfugs t`jt t`g bostroet ekurt

    gigvjtgb akrm kvgr sudstjheg dy jb`grohf tk t`g suppksgb ekrpkrjtg akrm ka UODI

    jhb UFE jhb hkt rgekfhozohf t`jt dkt` kpgrjtgb js pjrt ka j sohfig eromohji

    ghtgrprosg. UGE Droga jt 27-2?. R`g Tgegovgrs`op Ekurt jfrggs.

    Oh t`jt sjmg E`jptgr :7 Krbgr, t`g Tgegovgrs`op Ekurt ekheiubgb t`jt t`g

    ajets:1 wkuib nustoay j sudstjhtovg ekhskiobjtokh ka UODI, UFE jhb t`g kt`gr

    Utjhakrb Ghtotogs.:6Ob. jt 57. R`g Tgegovgrs`op Ekurt mjbg somoijr aohbohfs

    w`gh frjhtohf summjry nubfmght tk t`g Tgegovgr oh j arjubuight trjhsagr jetokh

    drkuf`t jfjohst egrtjoh hjtokhji pkiotoeji ekmmottggs. Njhvgy v. Bgmkerjtoe

    :1 Jmkhf t g ajets eotgb dy t`g Tgegovgrs`op Ekurt wgrg> (2) ekmmohfiohf ka auhbs jmkhft`g Utjhakrb Ghtotogs wjs t`g hkrm, (7) Utjhakrb borgetiy kr ohborgetiy kwhgb jii UtjhakrbGhtotogs, .(1) UOD ikjhgb Utjhakrb $:.0 doiiokh wot`kut j fujrjhty, (6) Utjhakrb jhb `osjsskeojtgs trjhsagrrgb jssgts jmkhf t`g Utjhakrb Ghtotogs oh bosrgfjrb ka ekrpkrjtgakrmjiotogs. E`jptgr :7 Krbgr jt 52-57.

    :6 R`g Tgegovgrs`op Ekurt bob hkt sudstjhtovgiy ekhskiobjtg t`g Utjhakrb Ghtotogs dgejusg t jt

    mge`jhosm os hkt jvjoijdig kutsobg j djhcruptey prkeggbohf. E`jptgr :7 Krbgr jt 57, h. 2:.

    WUEJ Ejsg #:4-7401 Bkeumght #:2:14

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    :4.

    Ughjtkroji Ejmpjofh Ekmmottgg, Ohe., 6?5 A.Uupp. 4b 047 (H.B.Rgx. 4

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    :5.

    kdiofjtokhs ka t`g UO\E mgmdgr aorm. Kib Hjpigs, 445 A.5b jt :5

    SR]`g UODI EB prkeggbs bob mkrg t`jh nust cggp t`g djhcjaikjt. Utjhakrb Ghtotogs jhb Utjhakrb `omsgia rgegovgb ijrfgbosdursgmghts ka t`g prkeggbs.

    E`jptgr :7 Krbgr jt 4?. Ugg jisk ob. jt 24 (Mkst ka t`g Utjhakrb Ghtotogs rgvghug

    ejmg arkm sgiiohf EBs.).

    Oh jaaormohf t`g Drkcgr Ohnuhetokh, t`g 7t`Eoreuot somoijriy bgtgrmohgb t`jt

    UODI EB prkeggbs auhbgb t`g kpgrjtokhs ka UFE>

    :0 R`g UGE kaagrgb gvobgheg t`jt jpprkxomjtgiy $140 moiiokh oh UFE ohvgstkr auhbs aikwgbarkm UODI tk UFE burohf t`g aovg ygjr pgrokb arkm 4

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    :2.

    Aohjiiy, t`g AJ Bgaghbjhts Sakrmgr drkcgrs ka UFE] pksotokht`jt UFE s`kuib dg sgpjrjtgb arkm SUODI] os ka hk mkmght.Js mjbg eigjr dy t`g Qjh Rjssgi Bgeijrjtokhs,

    :?UFE rgegovgb

    t`g duic ka ots rgvghug arkm ekmmossokhs akr t`g sjig ka t`g

    SUODI EBs] jhb aggs akr kt`gr sgrvoegs ot prkvobgb tk SUODI]

    rgijtgb tk t`g EB ohvgstmght pkrtakiok.

    Njhvgy v. Jifuorg, 126 A.5b 707, 7?? (7t`

    Eor. 4

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    :7.

    Kib Hjpigs, 445 A.5b jt :5

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    :1.

    Ugg jisk \ghbgrfgst-@kit v. Egrtjoh Whbgrwrotgrs jt Iikybs Ikhbkh, 67:

    A.Uupp.4b 061, 00< (U.B. Rgx. 4

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    :6.

    2. Bob t`g UODI EBs oh ajet gxost;

    R`g bostroet ekurt rgiogb upkh ots ekheiusokh t`jt t`g UODI EBs wgrg oh ajet

    pure`jsgb jhb bob oh ajet gxost akr UFE eioghts. Kp. jt :6. Oh rgje`ohf t`jt

    ekheiusokh, t`g bostroet ekurt rgiogb upkh t`g Utopuijtgb Ajets (Bke. Hk. 5

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    :0.

    Ugekhb, t`g bostroet ekurts trgjtmght ka t`g UODI EBs js rgji ohvgstmghts

    t`jt wgrg oh ajet pure`jsgb jhb oh ajet gxost os jfjoh ekhtrjry tk t`g aohbohfs

    jhb ruiohfs ka t`g Tgegovgrs`op Ekurt jhb t`g 7t`

    Eoreuot. R`g Tgegovgrs`op Ekurt

    `js rgpgjtgbiy akuhb (jhb t`g 7t` Eoreuot `js jaaormgb) t`jt Utjhakrb jhb `os

    ek`krts wgrg kpgrjtohf j eijssoe \khzo se`gmg arkm jt igjst :???. Ugg, g.f.,Njhvgy

    v.Bgmkerjtoe Ughjtkroji Ejmpjofh Ekmmottgg, Ohe., 6?5 A.Uupp. 4b 047, 076

    (H.B.Rgx. 4

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    :?.

    tgstomkhy ekhegrhohf Utjhakrbs ergjtovg rgvgrsg ghfohggrohf ka UODs

    jeekuhtohf rgekrbs>

    Vg akuhb wot`oh UODs jeekuhtohf rgekrbs wkrcs`ggts usgb tkbgrovgaoetotokus UOD rgvghugsdjec tk 4

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    4

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    4:.

    Oh dkt` Kib Hjpigs jhb \romgiohg, t`g eijomjhts wgrg bgjiohf wot`

    ohbovobujis w`k t`gy uhbgrstkkb tk dg (jhb w`k wgrg) jfghts ka j UO\E mgmdgr

    drkcgr. Kib Hjpigs, 445 A.5b jt :5

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    45.

    wot` t`g eigjrohf drkcgr jhb akrwjrbgb tk UODI, wgrg t`gh stkigh dy Utjhakrb akr j

    vjrogty ka omprkpgr purpksgs, oheiubohf t`g auhbohf ka UFE. R`g UGE kaagrgb

    gvobgheg t`jt rgagrrji aggs jhb kt`gr EB-rgijtgb rgvghug jeekuhtgb akr mkrg t`jh

    7

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    42.

    UFEs eigjrohf drkcgr bgaogs ekmmkh sghsg jhb igfotomozgs t`g strueturg ergjtgb

    dy Utjhakrb tk stgji mkhgy bgpksotgb dy UFEs eustkmgrs. R`g Tgegovgrs`op

    Ekurt rgausgb tk gigvjtg akrm kvgr sudstjheg, sgg E`jptgr :7 Krbgr jt 513 t`os

    Ekurt s`kuib js wgii.

    R`grg os hk mgjhohfaui bostohetokh dgtwggh t`os ejsg, Kib Hjpigs jhb

    \romgiohg. R`os Ekurt s`kuib jbkpt t`g rgjskhohf ka Kib Hjpigs jhb \romgiohg

    jhb aohb t`jt skmg (kr jii) ka UFEs eustkmgrs jrg oh hggb ka prktgetokh uhbgr

    UO\J.

    E. Utjhakrbs Eustkmgrs jrg oh t`g Dgst \ksotokh tkGstjdios` t`gor Utjtus js Eustkmgrs uhbgr UO\J

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