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Privileged & Confidential
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
Independent Workplace Investigation: Allegations Concerning Marcus Hale, President, Aurelius Pacific Studios Inc.
Prepared by Calderwood & Harkness LLP for the Board of Directors of Aurelius Global Media Group PLC
Presented to the People & Culture Committee (Chair: Dame Cordelia Ashworth) and Audit & Risk Committee (Chair: Raymond Okoro)
Joint Session — Secure Videoconference — August 16, 2023
Presenters: Bernard Crawford (Responsible Partner) and Devon Archer (Lead Associate), Calderwood & Harkness LLP
Matter No. 1017-00005
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Agenda
1. Background & Engagement Overview
2. Investigation Scope & Methodology
3. Summary of Allegations
4. Key Factual Findings — Sexual Harassment (Jenna Morales)
5. Key Factual Findings — Sexual Harassment (Claire Ngo)
6. Key Factual Findings — Retaliation (Darren Whitfield)
7. Prior Complaint History
8. Credibility Assessment Summary
9. Policy Deficiencies Identified
10. Legal Framework — California FEHA
11. Investigation Conclusions
12. Recommended Remedial Actions
13. Insurance & Financial Considerations
14. Next Steps & Questions
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Background & Engagement Overview
April 18, 2023: Written complaint filed via Meridian Compliance Solutions ethics hotline (Case Ref: MCS-1014-00001) by Jenna Morales, VP of Development, Aurelius Pacific Studios Inc.
April 19, 2023: Morales self-identified; complaint escalated by Victor Gallegos (VP HR, APS) to Fiona Blackwood (GC) and Patricia Sung (CPO)
April 20, 2023: Demand letter received from Nakamura Reeves LLP (Sandra Reeves, Partner) on behalf of Morales alleging violations of California FEHA
April 24, 2023: Corroborating complaint filed by Claire Ngo, Senior Director of Talent Relations
April 26, 2023: Voluntary report by Darren Whitfield, SVP of Physical Production, alleging retaliation
April 28, 2023: People & Culture Committee and Audit & Risk Committee jointly resolved to retain independent outside counsel; CEO Elliot Vane formally recused
May 2, 2023: Calderwood & Harkness LLP formally engaged; investigation opened
May 3, 2023: Marcus Hale placed on paid administrative leave; system access suspended; Hale retained Graham Thornfield of Thornfield & Associates LLP as personal counsel
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Investigation Scope & Methodology
Scope: Allegations of sexual harassment, hostile work environment, and retaliation against Marcus Hale under California FEHA and AGMG/APS policies
Calderwood & Harkness investigation team: Bernard Crawford (Responsible Partner, $1,350/hr), Renata Vasquez (Billing Partner, $1,275/hr), Devon Archer (Lead Associate, $875/hr), Nadia Petrov (Working Associate, $725/hr), plus contract review attorneys and paralegals
Forensic collection by Linden Forensics Group Inc. (retained May 8, 2023): 9 custodians; ~847,000 documents collected → ~214,000 after de-duplication → ~38,600 after search-term and date-range filtering
Document review: 38,600 items reviewed; 4,218 identified as relevant/responsive; 312 coded as 'hot' (highly relevant)
27 witness interviews conducted May 22 – July 14, 2023: 3 complainants, 16 current employees, 4 former employees, 3 third-party production contractors, 1 subject (Hale)
Marcus Hale interviewed June 15, 2023 at C&H Los Angeles office (4 hours 20 minutes); personal counsel Graham Thornfield in attendance
14-page written position statement submitted by Thornfield & Associates on June 5, 2023 on behalf of Hale
Cross-border privilege protocol established jointly with Pendleton & Warwick LLP (UK corporate counsel to AGMG)
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Summary of Allegations
Category 1 — Sexual Harassment (Jenna Morales, VP of Development): Unwanted sexual advances and sexually explicit comments from ~September 2022 through March 2023, including hotel room invitations, sexually suggestive text messages, inappropriate comments about physical appearance, and unwanted physical contact; retaliatory reassignment after rejection
Category 2 — Sexual Harassment (Claire Ngo, Senior Director of Talent Relations): Sexually suggestive comments about attire and personal questions at company off-site retreat (Monarch Valley Resort, Ojai, CA, February 17–18, 2023); subsequent exclusion from three key talent-relations strategy meetings in March and April 2023
Category 3 — Retaliation (Darren Whitfield, SVP of Physical Production): Retaliatory reassignment of Project Meridian and Project Halcyon (combined budgets $187M) from Whitfield to SVP Cameron Briggs on February 6, 2023, following Whitfield raising concerns about Hale's treatment of female employees at January 23, 2023 leadership meeting
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Key Factual Findings — Sexual Harassment (Jenna Morales)
(a) Vancouver production trip (October 2022): Morales reported Hale invited her to his hotel room on two occasions; 3 witnesses corroborated hearing about the invitations contemporaneously
(b) Text messages (November 14, November 29, December 8, 2022): Forensic recovery of text messages from Hale's device confirmed sexually suggestive content consistent with Morales's account
(c) One-on-one meeting (January 11, 2023): Morales reported inappropriate comment about her physical appearance; executive assistant corroborated Morales's visibly upset state immediately after
(d) Company dinner (February 3, 2023): Morales reported unwanted physical contact; 2 witnesses directly observed Hale's hand placement; 1 additional witness corroborated from the same evening
Total: 7 corroborating witnesses across the four sub-categories
Documentary evidence (recovered text messages and email chains) is consistent with Morales's timeline and account
Hale denied all allegations, characterizing interactions as 'normal workplace collegiality'
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Key Factual Findings — Sexual Harassment (Claire Ngo)
Company off-site at Monarch Valley Resort, Ojai, CA (February 17–18, 2023): Ngo reported Hale made sexually suggestive comments about her attire and asked if she was 'seeing anyone'
2 witnesses corroborated Ngo's account of the off-site comments
Following the off-site: Ngo reported being excluded from three key talent-relations strategy meetings in March and April 2023
Calendar and email evidence confirmed Ngo's exclusion from three meetings she had previously attended regularly; no documented business justification identified
Ngo reported a colleague she confided in was later approached by Hale asking about Ngo's reaction
Hale denied making suggestive comments; stated Ngo's meeting exclusions were based on a 'reorganization of attendee lists' — no corroborating documentation of any such reorganization was found
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Key Factual Findings — Retaliation (Darren Whitfield)
January 23, 2023: Whitfield raised concerns about Hale's treatment of female employees at a leadership team meeting; multiple attendees corroborated this
February 6, 2023: Hale reassigned Project Meridian and Project Halcyon (combined budgets $187M) from Whitfield to SVP Cameron Briggs
Email evidence: Hale directed the reassignment the day after Whitfield's complaint — email chain contained no performance-related justification
Cameron Briggs confirmed in interview that Hale provided no substantive explanation beyond stating it was a 'strategic realignment'
No documented performance concerns regarding Whitfield's handling of either project found in HR records or email
Hale's position: Reassignment was based on 'production scheduling needs' — no corroborating documentation identified
Temporal proximity (14 days between complaint and reassignment) and absence of documented justification support the retaliation finding
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Prior Complaint History
July 2021: Former Executive Assistant Serena Whitcomb (employed April 2019 – September 2021) made an informal complaint alleging inappropriate comments by Hale
Complaint handled internally by Victor Gallegos (VP HR, APS) without a formal investigation
August 2, 2021: Gallegos issued a verbal counseling to Hale
No written documentation of the verbal counseling was retained in Hale's personnel file
Whitcomb separated from the company in September 2021
Investigation identified the lack of documentation and the absence of a formal investigation as a significant policy deficiency
Serena Whitcomb was interviewed during this investigation (June 22, 2023) and corroborated the prior complaint
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Credibility Assessment Summary
Assessment criteria: consistency with documentary evidence, corroborating witness testimony, specificity and detail, contemporaneous reporting, and demeanor during interviews
Jenna Morales: Account consistent with recovered text messages and email evidence; corroborated by 7 witnesses; detailed timeline; contemporaneous disclosures documented in Meridian Solutions messages
Claire Ngo: Account corroborated by 2 witnesses; calendar and email evidence confirmed meeting exclusions; consistent and detailed narrative
Darren Whitfield: Account supported by email evidence showing the reassignment directive and its timing; corroborated by multiple leadership meeting attendees
Marcus Hale: General denials; characterization of complaints as performance-related grievances not supported by documentary evidence; explanations for project reassignment and meeting exclusions lacked corroboration; position statement did not engage specific factual evidence
Conclusion: Complainants' accounts are credible and substantiated; Hale's denials are not supported by the weight of the evidence
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Policy Deficiencies Identified
Failure to document the August 2, 2021 verbal counseling of Hale in his personnel file — contrary to APS Employee Handbook (CA Supplement) Section 8.1
2021 Whitcomb complaint handled informally without a formal investigation, contrary to Section 8.1 and California employer obligations under Cal. Gov. Code § 12940(k)
Gaps in escalation procedures between Meridian Compliance Solutions hotline and internal HR — no clear protocol for timely escalation of complaints involving senior executives
Anti-Harassment Policy (Section 5.3) lacks specific provisions for complaints against C-suite or division-president-level executives (no bypass mechanism to route complaints to the Board)
Anti-Retaliation Policy (Section 5.7) lacks concrete examples of retaliatory conduct; does not specifically address project reassignments or meeting exclusions
AGMG Global Code of Conduct (v4.2, effective January 1, 2022) and Board Corporate Governance Guidelines (Section 12: Executive Conduct Standards) were not effectively cascaded to APS leadership
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Legal Framework — California FEHA
California Fair Employment and Housing Act (Cal. Gov. Code §§ 12940 et seq.) governs the allegations
Sexual harassment: FEHA prohibits quid pro quo and hostile work environment harassment by supervisors; employer is strictly liable for harassment by a supervisor (Cal. Gov. Code § 12940(j)(1))
Retaliation: FEHA prohibits retaliation against employees who oppose prohibited practices or participate in complaints/investigations (Cal. Gov. Code § 12940(h))
Employer duty: California law requires employers to take all reasonable steps to prevent harassment and discrimination, including conducting fair, timely, and thorough investigations (Cal. Gov. Code § 12940(k))
Hale's substantiated conduct exposes Aurelius Pacific Studios Inc. and AGMG to potential liability for harassment, retaliation, and failure to prevent harassment
Potential remedies under FEHA include compensatory damages, punitive damages, injunctive relief, attorneys' fees, and costs
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Investigation Conclusions
SUBSTANTIATED: Sexual harassment of Jenna Morales — all four categories of alleged conduct (hotel room invitations, suggestive text messages, inappropriate comment, unwanted physical contact) substantiated
SUBSTANTIATED: Sexually inappropriate comments to Claire Ngo at the February 17–18, 2023 company off-site, and subsequent exclusion from meetings
SUBSTANTIATED: Retaliation against Darren Whitfield — reassignment of Project Meridian and Project Halcyon following his January 23, 2023 complaint, with no documented business justification
Marcus Hale's conduct violated the AGMG Global Code of Conduct (v4.2), APS Employee Handbook Sections 5.3 and 5.7, AGMG Board Corporate Governance Guidelines Section 12, and California FEHA
Significant policy and procedural deficiencies identified in APS complaint-handling and documentation practices
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Recommended Remedial Actions
1. Termination of Marcus Hale for cause under Section 9.2(b) of his January 7, 2019 employment agreement with Aurelius Pacific Studios Inc.
2. Mandatory enhanced anti-harassment training for all senior leaders (VP level and above) at APS — to be conducted within 90 days
3. Revision of APS Employee Handbook (CA Supplement) Sections 5.3, 5.7, and 8.1 — including addition of a bypass escalation mechanism for complaints involving senior executives
4. Revision of hotline escalation procedures with Meridian Compliance Solutions LLC to ensure automatic flagging of complaints involving VP-level and above executives for GC and Board review
5. Engagement of an independent workplace culture assessment at Aurelius Pacific Studios Inc.
6. Appropriate remedial measures for Morales, Ngo, and Whitfield (restoration of responsibilities, protection against retaliation, and consideration of other appropriate relief)
7. Improvement of HR documentation practices — all counseling, discipline, and complaint-handling actions must be memorialized in writing and retained in personnel files
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Insurance & Financial Considerations
Total investigation cost: $1,437,250 (Calderwood & Harkness: $1,247,850; Linden Forensics: $189,400)
EPLI coverage: Northbridge Mutual Insurance Co., Policy No. NM-EPLI-2023-00417; per-claim limit $10M; aggregate limit $25M; self-insured retention $500,000
Investigation costs submitted to Northbridge; amounts above $500K SIR subject to carrier approval
D&O coverage: Precautionary notice provided to Castlemaine Underwriters Ltd. under Policy No. CU-DO-2023-11283 (tower limit $50M)
Insurance broker Kessler & Dunn Insurance Brokers Ltd. notified of both potential claims
External auditor Greystone Advisors LLP notified — Hale's employment agreement contains change-of-control and termination-for-cause provisions affecting compensation accruals
Potential litigation exposure: Morales's counsel (Nakamura Reeves LLP) has already submitted a demand letter; claims by Ngo and Whitfield also possible
For-cause termination avoids severance and accelerated equity vesting that would be triggered by without-cause termination
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Next Steps
Committee feedback on draft investigation report — Calderwood & Harkness to incorporate and finalize by August 19, 2023
Board consideration and authorization of for-cause termination of Marcus Hale
Coordination with Fiona Blackwood and employment counsel on termination mechanics under Section 9.2(b) of the Hale employment agreement
Engagement with Patricia Sung and Victor Gallegos on remedial measures for Morales, Ngo, and Whitfield
Initiation of policy revisions and enhanced training programs (target: 90 days)
Continued coordination with Northbridge Mutual on EPLI coverage for investigation costs and any subsequent claims
Engagement of independent firm to conduct workplace culture assessment at Aurelius Pacific Studios Inc.
Privilege and document retention protocols to be maintained per Calderwood & Harkness's guidance
Calderwood & Harkness to issue formal investigation closing letter upon delivery of final report
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Questions & Discussion
Bernard Crawford and Devon Archer available for questions
All discussion remains subject to attorney-client privilege
Reminder: Draft report feedback requested by August 18, 2023 for finalization by August 19, 2023