Galapagos Global Capital Management Llc

Event Detail: CHARGED ON SEPTEMBER 21, 2017 BY THE BRAZILIAN FEDERAL PUBLIC PROSECUTOR WITH ONE COUNT OF TWO BRAZILIAN FELONY CRIMES, EACH FOR ALLEGED ANTI-COMPETITIVE TRADE ACTIVITIES. SEE FOR MORE DETAILS ITEM 5 BELOW. Status: Pending Disposition: PROCEEDING WAS CONDITIONALLY SUSPENDED ON MAY 08, 2023, CONDITIONED, AMONG OTHERS, ON PAYMENT OF BRL 200,000 (APPROXIMATELY USD 40,000) IN 10 INSTALLMENTS. SEE FURTHER DETAILS IN ITEM 5 BELOW. Summary: SERGIO ZANINI, THE CHIEF INVESTMENT OFFICER OF THE REGISTRANT, WAS CHARGED ON SEPTEMBER 21, 2017 BY THE BRAZILIAN FEDERAL PUBLIC PROSECUTOR FOR ALLEGED ANTI-COMPETITIVE TRADE ACTIVITIES IN 2008/2009 WHILE EMPLOYED BY ROYAL BANK OF CANADA RELATED TO ALLEGED BRL INTERBANK OFFSHORE DERIVATIVE SPREADS FIXING AND OBSTRUCTING OTHER PLAYERS FROM PARTICIPATING IN THE INTERBANK OFFSHORE NDF BRL MARKET. FOLLOWING SERGIO ZANINI'S VIGOROUS PRELIMINARY DEFENSE OF THESE CHARGES, WHICH INCLUDED EXPLAINING THE NATURE OF THE OFFSHORE BRL NON-DELIVERABLE FORWARD ("NDF") MARKET AND ITS COUNTERPART CREDIT RESTRICTIONS, THE BRAZILIAN PROSECUTOR'S OFFICE DECIDED NOT TO PURSUE THE CRIMINAL PROCEEDING AND, AS PER BRAZILIAN LEGAL PROCEDURES, GRANTED SERGIO ZANINI A CONDITIONAL SUSPENSION OF THE PROCEEDING, WHICH WAS ACCEPTED BY SERGIO ZANINI, CONFIRMED BY THE BRAZILIAN 2ND FEDERAL CRIMINAL COURT OF THE JUDICIAL SUBSECTION ON MAY 08, 2023, AND IMPOSED THE FOLLOWING CONDITIONS: (I) MONTHLY APPEARANCE BY SERGIO ZANINI IN COURT TO BE PERFORMED BY VIDEOCONFERENCING OR E-MAIL AND (II) PAYMENT OF BRL 200,000 (APPROXIMATELY USD 40,000) IN 10 INSTALLMENTS. PURSUANT TO BRAZILIAN LAW, THIS SUSPENSION DOES NOT IMPLY THE ADMISSION OF GUILT BY SERGIO ZANINI. ONCE THE 2-YEAR PERIOD IS CONCLUDED AND THE ABOVE CONDITIONS ARE MET, THE CRIMINAL PROCEEDING WILL BE AUTOMATICALLY TERMINATED WITHOUT ANY REGISTRATION ON SERGIO ZANINI'S CRIMINAL RECORDS.

Allegations: SERGIO ZANINI, THE CHIEF INVESTMENT OFFICER OF THE REGISTRANT, HAS BEEN NAMED ON JULY 1, 2015 IN AN ADMINISTRATIVE PROCEEDING BY THE BRAZILIAN ADMINISTRATIVE ANTI-COMPETITIVE AUTHORITY (CONSELHO ADMINISTRATIVO DE DEFESA ECONÔMICA - CADE) WITH REGARDS TO ALLEGED ANTI-COMPETITIVE TRADE ACTIVITIES IN 2008/2009 WHILE EMPLOYED BY ROYAL BANK OF CANADA BY, AMONG OTHERS, ALLEGED ARTIFICIAL FIXING OF PRICES IN THE DERIVATIVES MARKET INVOLVING NON-DELIVERABLE FORWARD PRODUCTS RELATED TO BRAZILIAN REAIS (BRL) AND US DOLLAR (USD) FOREIGN EXCHANGE SPREAD. THE PROCEEDING ALLEGED THE VIOLATION OF PROVISIONS OF THE BRAZILIAN COMPETITION LAW (LAW 12.529/2011). Status: Pending Sanction Detail: SEE FURTHER DETAILS IN ITEM 13 BELOW. Summary: SERGIO ZANINI, THE CHIEF INVESTMENT OFFICER OF THE REGISTRANT, HAS BEEN NAMED ON JULY 1, 2015 IN AN ADMINISTRATIVE PROCEEDING BY THE BRAZILIAN ADMINISTRATIVE ANTI-COMPETITIVE AUTHORITY (CONSELHO ADMINISTRATIVO DE DEFESA ECONÔMICA - CADE) WITH REGARDS TO ALLEGED ANTI-COMPETITIVE TRADE ACTIVITIES IN 2008/2009 WHILE EMPLOYED BY ROYAL BANK OF CANADA BY, AMONG OTHERS, ALLEGED ARTIFICIAL FIXING OF PRICES IN THE DERIVATIVES MARKET INVOLVING NON-DELIVERABLE FORWARD ("NDF") PRODUCTS RELATED TO BRAZILIAN REAIS (BRL) AND US DOLLAR (USD) FOREIGN EXCHANGE SPREAD. THE PROCEEDING ALLEGED THE VIOLATION OF PROVISIONS OF THE BRAZILIAN COMPETITION LAW (LAW 12.529/2011). ROYAL BANK OF CANADA AND CADE ENTERED INTO A CEASE AND DESIST AGREEMENT ("TCC") ON JUNE 13, 2018, WHICH INCLUDED AN ADHESION CLAUSE THAT ENABLED RELATED INDIVIDUALS TO ADHERE TO THE AGREEMENT AND BE ENTITLED TO ITS BENEFITS. THROUGH THE TCC, ROYAL BANK OF CANADA (I) ACKNOWLEDGED PARTICIPATION IN PART OF THE CONDUCT UNDER INVESTIGATION BY CADE, WITH REGARDS TO SHARING SENSITIVE INFORMATION WITH COMPETITORS AND WITH REGARDS TO SPREADS IN THE NDF BRL MARKET BUT NOT WITH REGARD TO FIXING THE BRL CURRENCY EXCHANGE RATE CALCULATED BY THE BRAZILIAN CENTRAL BANK ("PTAX") OR CURRENCY INDEX MANIPULATION, (II) AGREED TO COOPERATE WITH THE INVESTIGATION, AND (III) AGREED TO PAY A PECUNIARY CONTRIBUTION. SERGIO ZANINI'S REQUEST FOR ADHESION TO THE TCC WAS GRANTED BY CADE´S TRIBUNAL ON MARCH 20, 2019. HE PAID A PECUNIARY CONTRIBUTION OF BRL 150,000 (APPROXIMATELY USD 30,000). AS A RESULT, THE PROCEEDING WAS SUSPENDED IN RELATION TO ROYAL BANK OF CANADA AND SERGIO ZANINI AND CURRENTLY AWAITS JUDGMENT BY THE CADE´S TRIBUNAL, WHEN IT IS EXPECTED THAT THERE WILL BE RECOGNITION OF COMPLIANCE BY SERGIO ZANINI WITH THE OBLIGATIONS SET OUT IN THE TCC AND THEREFORE NO CONDEMNATION OF SERGIO ZANINI BY CADE.