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18.114. Misconduct of Employees and of Service Providers

Misconduct or misrepresentations by employees of the Manager or the Investment Compartment’s service providers could cause significant losses to the Investment Compartment. Employee misconduct may include binding the Investment Compartment to transactions that exceed authorized limits or present unacceptable risks and unauthorized trading activities, concealing unsuccessful trading activities (which, in any case, may result in unknown and unmanaged risks or losses) or making misrepresentations regarding any of the foregoing. Losses could also result from actions by the Investment Compartment’s service providers, including, without limitation, failing to recognize trades and misappropriating assets. In addition, employees and service providers may improperly use or disclose confidential information, which could result in litigation or serious financial harm, including limiting the Investment Compartment’s business prospects or future marketing activities. Despite the Manager’s due diligence efforts, misconduct and intentional misrepresentations may be undetected or not fully comprehended, thereby potentially undermining the Manager’s due diligence efforts. As a result, no assurances can be given that the due diligence performed by the Manager will identify or prevent any such.