PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT PREPARED AT THE DIRECTION OF COUNSEL
DRAFT — PRIVILEGED INVESTIGATION REPORT
INDEPENDENT WORKPLACE INVESTIGATION INTO ALLEGATIONS OF SEXUAL HARASSMENT, RETALIATION, AND HOSTILE WORK ENVIRONMENT AGAINST MARCUS HALE, PRESIDENT, AURELIUS PACIFIC STUDIOS INC.
Prepared by:
Calderwood & Harkness LLP 1999 Avenue of the Stars, Suite 2800 Los Angeles, California 90067
Prepared for:
The Board of Directors of Aurelius Global Media Group PLC through Fiona Blackwood, General Counsel
Date: August 11, 2023
C&H Matter No.: 1017-00005
CLASSIFICATION: DRAFT — FOR BOARD REVIEW — PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE AND ATTORNEY WORK PRODUCT DO NOT DISTRIBUTE
TABLE OF CONTENTS
Right-click to update Table of Contents
APPENDICES (Referenced but not included in this Draft)
I. EXECUTIVE SUMMARY
A. Overview of Engagement
Calderwood & Harkness LLP ("C&H" or the "Firm") was retained by the Board of Directors (the "Board") of Aurelius Global Media Group PLC ("AGMG") on May 2, 2023, to conduct an independent privileged investigation into allegations of sexual harassment, retaliation, and creating a hostile work environment against Marcus Hale ("Hale"), President of Aurelius Pacific Studios Inc. ("APS"), a wholly owned subsidiary of AGMG.
The engagement was authorized jointly by the People & Culture Committee of the Board, chaired by Dame Cordelia Ashworth, and the Audit & Risk Committee of the Board, chaired by Raymond Okoro, pursuant to a joint resolution adopted on April 28, 2023 (the "Joint Resolution"). The Joint Resolution directed the retention of independent outside counsel to investigate allegations raised by multiple complainants, to make factual findings, and to provide recommendations to the Board.
In light of his direct reporting relationship with Hale — Hale reports to AGMG Chief Executive Officer Elliot Vane — Mr. Vane formally recused himself from all oversight of the investigation as of April 28, 2023. The recusal was documented in writing and communicated to the full Board.
Fiona Blackwood, General Counsel of AGMG, served as the Board's primary liaison with C&H throughout the investigation. Ms. Blackwood coordinated access to company systems, personnel, and records, and facilitated communications between the investigation team and relevant committees of the Board.
The investigation was opened on May 2, 2023. This draft report is delivered to Ms. Blackwood on August 11, 2023 for review by the Board and its relevant committees. The report sets forth the investigation team's factual findings, credibility assessments, legal analysis, and preliminary recommendations.
B. Summary of Allegations
The investigation examined three categories of allegations:
1. Sexual Harassment of Jenna Morales. Morales, Vice President of Development at APS, alleged that Hale engaged in a pattern of sexual harassment over a period of approximately September 2022 through March 2023, encompassing invitations to his hotel room during a Vancouver production trip, sexually suggestive text messages, inappropriate comments about her physical appearance, and unwanted physical contact at a company dinner.
2. Sexually Inappropriate Conduct Toward Claire Ngo. Ngo, Senior Director of Talent Relations at APS, alleged that Hale made sexually suggestive comments about her attire and asked about her romantic status at a company off-site retreat in February 2023, and subsequently excluded her from key strategy meetings in an apparent retaliatory manner.
3. Retaliation Against Darren Whitfield. Whitfield, SVP of Physical Production at APS, alleged that Hale retaliated against him for raising concerns about Hale's treatment of female employees at a January 2023 leadership meeting by reassigning two high-profile production projects (combined budgets of approximately $187 million) to another executive without documented performance-related justification.
These allegations arise under the California Fair Employment and Housing Act ("FEHA"), Cal. Gov. Code §§ 12940 et seq., as well as under AGMG and APS internal policies, including the AGMG Global Code of Conduct, the APS Employee Handbook (California Supplement), and the AGMG Board Corporate Governance Guidelines.
C. Summary of Findings
Based on its review of approximately 4,218 relevant documents (including 312 documents designated as "hot" or highly relevant), 27 witness interviews, and analysis of the totality of the evidence, the investigation team makes the following findings on a preponderance-of-the-evidence standard:
Sexual Harassment — Jenna Morales: The investigation substantiated the allegations of sexual harassment against Jenna Morales across all four alleged categories of conduct: (a) hotel room invitations during the October 2022 Vancouver production trip; (b) sexually suggestive text messages sent by Hale on November 14, November 29, and December 8, 2022; (c) an inappropriate comment about Morales's physical appearance during a one-on-one meeting on January 11, 2023; and (d) unwanted physical contact (hand placed on Morales's lower back and thigh) at a company dinner on February 3, 2023. Seven corroborating witnesses and forensically recovered text messages support Morales's account. Hale's denials were found not credible in material respects.
Sexually Inappropriate Conduct — Claire Ngo: The investigation substantiated the allegations that Hale made sexually suggestive comments about Ngo's attire and inquired about her romantic status at the February 2023 off-site retreat at the Monarch Valley Resort, Ojai, California. The investigation further substantiated that Ngo's subsequent exclusion from three key talent-relations strategy meetings in March and April 2023 was retaliatory. Two corroborating witnesses and documentary evidence (calendar and meeting-invitation records) support Ngo's account.
Retaliation — Darren Whitfield: The investigation substantiated the allegation that Hale retaliated against Whitfield by reassigning Project Meridian and Project Halcyon (combined budgets of $187 million) from Whitfield to SVP Cameron Briggs on February 6, 2023, following Whitfield's January 23, 2023 complaint at a leadership meeting about Hale's treatment of female employees. Email evidence, witness corroboration, and the complete absence of any documented performance-related justification support the finding of retaliatory motive.
Institutional Deficiencies: The investigation also identified significant deficiencies in APS's complaint-handling procedures and documentation practices, including the failure to document a verbal counseling issued to Hale in August 2021 and the failure to conduct a formal investigation of a prior informal complaint against Hale filed in July 2021 by former Executive Assistant Serena Whitcomb.
D. Summary of Recommendations
The investigation team makes the following preliminary recommendations, each of which is discussed in greater detail in Section XI of this report:
1. Termination of Marcus Hale for Cause. Based on the substantiated findings, the Board should authorize APS to terminate Hale's employment for cause under Section 9.2(b) of his employment agreement dated January 7, 2019.
2. Enhanced Anti-Harassment Training. Mandatory enhanced, interactive anti-harassment training should be implemented for all senior leaders (VP level and above) at APS, with a phased rollout to all AGMG US subsidiaries.
3. Revision of Complaint-Handling Protocols. APS should revise its Employee Handbook provisions governing complaint handling, investigation triggers, and documentation requirements, with particular attention to escalation procedures for allegations involving senior executives.
4. Independent Workplace Culture Assessment. A qualified independent third party should be engaged to conduct a comprehensive workplace culture assessment at APS.
5. Remedial Measures for Complainants. Appropriate remedial measures should be implemented for Morales, Ngo, and Whitfield, including restoration of responsibilities, protection from retaliation, and consideration of remedial compensation or other appropriate measures.
6. Improvement of HR Documentation Practices. APS should implement mandatory written memorialization of all counseling, warnings, and disciplinary actions in employee personnel files, subject to periodic audit.
II. SCOPE OF ENGAGEMENT AND PRIVILEGED NATURE OF REPORT
A. Engagement Terms
Calderwood & Harkness LLP was engaged pursuant to an engagement letter executed on May 2, 2023, between C&H and the Board of Directors of Aurelius Global Media Group PLC (the "Engagement Letter"). A copy of the fully executed Engagement Letter is attached as Appendix A.
Under the terms of the Engagement Letter, C&H was retained as counsel to the Board of Directors of AGMG — and not to any individual director, officer, employee, or subsidiary thereof — to conduct an independent privileged investigation into the allegations described herein. The engagement specifically authorized C&H to: (i) identify and interview relevant witnesses; (ii) collect, review, and analyze relevant documents and electronic communications; (iii) make factual findings based on the preponderance-of-the-evidence standard; and (iv) produce a privileged written report setting forth findings and recommendations for the Board's consideration.
This matter has been assigned C&H Matter Number 1017-00005. Bernard Crawford, Responsible Partner in C&H's Labor & Employment practice, served as the lead partner on the engagement, with Renata Vasquez serving as Billing Partner. Devon Archer, Lead Associate, served as the day-to-day investigation lead. The full investigation team is described in Section IV.A below.
B. Privilege and Confidentiality Framework
This report, and the investigation underlying it, is protected by the attorney-client privilege and the attorney work product doctrine. The report was prepared at the direction of counsel, reflects the mental impressions, conclusions, opinions, and legal theories of attorneys, and was prepared in anticipation of potential litigation and in connection with the rendering of legal advice to the Board.
The attorney-client privilege and work product protection belong exclusively to Aurelius Global Media Group PLC and its Board of Directors. The company may waive or choose not to waive the privilege at its sole discretion. No individual director, officer, or employee of AGMG or any of its subsidiaries holds or may waive the privilege independently.
Given AGMG's status as a UK-incorporated, London-listed public company with US operations, a cross-border privilege protocol was developed jointly by C&H and Pendleton & Warwick LLP, AGMG's UK corporate counsel (20 Fenchurch Street, 8th Floor, London EC3M 3BY). The protocol, documented in a joint memorandum dated May 12, 2023 (attached as Appendix N), was designed to ensure that the investigation and this report maintain privilege protection under both US law (including the attorney-client privilege and work product doctrine as recognized under federal and California state law) and UK law (including legal professional privilege under the common law and the Legal Services Act 2007). The protocol addressed, among other matters, the handling of communications between US and UK counsel, the scope of any disclosures to the Board in its capacity as a UK-regulated governing body, and the treatment of the report under UK disclosure obligations in the event of future litigation.
All witnesses interviewed during the investigation were administered an Upjohn warning (also referred to as a "corporate Miranda" warning) at the commencement of their interviews. The standard form of the warning, which is attached as Appendix E, advised each witness of the following: (i) C&H represents Aurelius Global Media Group PLC and its Board of Directors, and does not represent the individual witness; (ii) the purpose of the interview is to gather facts relevant to the investigation; (iii) the interview is protected by the attorney-client privilege; (iv) the privilege belongs to the company, not to the individual witness, and the company may choose to waive or not waive the privilege at any time; (v) the witness should keep the substance of the interview confidential and should not discuss it with other employees or third parties; and (vi) the witness is expected to provide truthful and complete information. Each witness verbally acknowledged their understanding of the Upjohn warning before the substantive portion of the interview commenced, and such acknowledgment was noted in the interview memorandum.
C. Investigation Scope — What Was Investigated
The investigation was tasked with examining the following matters:
1. Allegations of sexual harassment by Marcus Hale against Jenna Morales, Vice President of Development at APS, as set forth in Morales's April 18, 2023 complaint filed through the Meridian Compliance Solutions Ethics & Compliance Hotline (case reference MCS-1014-00001) and as elaborated through subsequent communications and interviews.
2. Allegations of sexually inappropriate conduct by Marcus Hale toward Claire Ngo, Senior Director of Talent Relations at APS, as set forth in Ngo's April 24, 2023 complaint filed with Victor Gallegos, VP of Human Resources at APS.
3. Allegations of retaliation by Marcus Hale against Darren Whitfield, SVP of Physical Production at APS, as reported by Whitfield to Victor Gallegos on April 26, 2023.
4. Adequacy of APS complaint-handling procedures and documentation practices, including the handling of the prior informal complaint against Hale filed by Serena Whitcomb in July 2021.
The investigation applied the following legal framework and company policies:
Applicable Legal Framework:
• California Fair Employment and Housing Act ("FEHA"), Cal. Gov. Code §§ 12940 et seq., including but not limited to Sections 12940(h) (retaliation), 12940(j) (harassment), and 12940(k) (employer obligation to prevent harassment and discrimination).
Applicable Company Policies:
• AGMG Global Code of Conduct, Version 4.2 (effective January 1, 2022).
• APS Employee Handbook, California Supplement (revised March 15, 2022), specifically Section 5.3 (Anti-Harassment & Anti-Discrimination Policy), Section 5.7 (Anti-Retaliation Policy), and Section 8.1 (Complaint & Investigation Procedures).
• AGMG Board Corporate Governance Guidelines, Section 12 (Executive Conduct Standards).
D. Investigation Scope — What Was Not Investigated
The scope of this investigation was defined by the Joint Resolution and the Engagement Letter. Certain matters fell outside the investigation's scope and were not examined:
Damages and Litigation Risk. The investigation did not assess potential claims for damages by any complainant, evaluate the quantum of potential exposure in any civil proceedings, or render opinions regarding the likelihood or outcome of any litigation. Assessment of litigation risk is a separate engagement matter that the Board may wish to address through separate counsel.
Financial Audit and Reporting Implications. The investigation did not conduct a financial audit or assess the financial-reporting implications of any findings. Greystone Advisors LLP, AGMG's external auditor, was separately notified of the investigation through AGMG's Audit & Risk Committee, chaired by Raymond Okoro, in accordance with the company's standard procedures for matters that may have reporting implications.
Insurance Coverage. The investigation did not render opinions on the scope or applicability of insurance coverage under the Employment Practices Liability Insurance ("EPLI") policy issued by Northbridge Mutual Insurance Co. (Policy No. NM-EPLI-2023-00417) or the Directors and Officers liability insurance policy issued by Castlemaine Underwriters Ltd. Timely notice of the underlying claims and the investigation was separately provided to both carriers by AGMG's risk management department, in coordination with Fiona Blackwood's office.
E. Standards Applied
The investigation was conducted to the standard of a fair, timely, and thorough investigation as required under Cal. Gov. Code § 12940(k), which imposes an affirmative obligation on employers to take all reasonable steps necessary to prevent discrimination and harassment, including conducting prompt and thorough investigations of complaints.
All factual findings set forth in this report have been made on a preponderance-of-the-evidence standard — that is, whether the evidence demonstrates that it is more likely than not that the alleged conduct occurred. This standard is the prevailing standard for internal workplace investigations and is consistent with guidance from the California Department of Fair Employment and Housing (now the California Civil Rights Department) and with recognized best practices for workplace investigations.
This is a factual investigation, not a legal proceeding. The formal rules of evidence do not apply. However, principles of reliability and relevance guided the investigation team's assessment of all evidence. The investigation team considered the totality of the evidence — including witness testimony, documentary evidence, electronic communications, and circumstantial evidence — in reaching its findings. Where conflicts in the evidence existed, the investigation team assessed credibility using the factors described in Section VII.A of this report.
III. BACKGROUND
A. Aurelius Global Media Group PLC
Aurelius Global Media Group PLC ("AGMG") is a United Kingdom-headquartered, publicly traded media, entertainment, and e-commerce conglomerate. AGMG is incorporated in England and Wales under the Companies Act 2006, with its registered office at 45 Aldwych House, Kingsway, London WC2B 6AH, United Kingdom. AGMG's ordinary shares are listed on the London Stock Exchange AIM market, and the company has an approximate market capitalization of £3.8 billion as of the date of this report.
AGMG operates through four global divisions: filmed entertainment, streaming and digital content, publishing, and e-commerce. The company employs approximately 14,200 persons worldwide, of whom approximately 4,600 are based in the United States. For the fiscal year ended December 31, 2022, AGMG reported global revenue of approximately £2.94 billion (approximately $3.67 billion at prevailing exchange rates).
AGMG's Board of Directors consists of eleven members, including a mix of executive and non-executive directors. The Board operates through several standing committees, including the People & Culture Committee, chaired by Dame Cordelia Ashworth, and the Audit & Risk Committee, chaired by Raymond Okoro. The Chief Executive Officer is Elliot Vane. The General Counsel is Fiona Blackwood. The Chief People Officer is Patricia Sung. The Chief Compliance Officer is Ingrid Holt.
B. Aurelius Pacific Studios Inc.
Aurelius Pacific Studios Inc. ("APS") is a Delaware corporation and wholly owned subsidiary of AGMG. APS is the operational entity for Aurelius's US-based filmed entertainment and streaming content production activities. APS's registered agent in Delaware is c/o Capitol Registered Agents Inc., 1209 Orange Street, Wilmington, DE 19801.
APS is headquartered at 3200 West Alameda Avenue, Suite 400, Burbank, California 91505, with satellite offices in Atlanta, Georgia and New York, New York. APS employs approximately 2,300 persons and reported revenue of approximately $1.12 billion for the fiscal year ended December 31, 2022.
APS serves as the direct employer of all US studio-division personnel, including Marcus Hale, the complainants, and all other witnesses employed within the studio division. APS maintains its own employee handbook (with a California Supplement), HR department, and compliance infrastructure, though it operates under the umbrella of AGMG's global policies, including the AGMG Global Code of Conduct.
C. Marcus Hale — Subject of Investigation
Marcus Hale, age 54, has served as President of Aurelius Pacific Studios Inc. since January 2019. In this capacity, Hale is the most senior executive within the US studio division and has direct oversight over all US film and streaming content production. Hale reports directly to AGMG CEO Elliot Vane.
Prior to joining APS, Hale served as Executive Vice President of Production at a competing major studio, where he spent approximately twelve years. Hale was recruited to APS in late 2018 and commenced his role in January 2019.
As President of APS, Hale has nine Senior Vice Presidents as direct reports and exercises supervisory authority over the entire studio division, including the authority to hire, terminate, promote, reassign, and direct the work of division employees. This supervisory authority is relevant to the legal analysis set forth in Section VIII of this report.
Hale's employment is governed by an employment agreement dated January 7, 2019 (the "Employment Agreement"), which contains, among other provisions, termination-for-cause provisions at Section 9.2(b). Hale's total annual compensation is approximately $4.7 million, consisting of: a base salary of $1,850,000; a target annual bonus of $1,390,000 (representing approximately 75.1% of base salary); and equity awards in the form of restricted stock unit ("RSU") and performance share grants valued at approximately $1,460,000 annually.
On May 3, 2023, the day following C&H's formal engagement, Hale was placed on paid administrative leave pending the outcome of the investigation. Simultaneously, Hale's access to company email, Meridian Solutions, internal collaboration platforms, and all other company systems was suspended. Hale was notified of the leave through a letter delivered by Victor Gallegos, VP of Human Resources, in coordination with Fiona Blackwood.
Hale is represented in connection with this investigation by Graham Thornfield, founding partner of Thornfield & Associates LLP, 10250 Constellation Boulevard, Suite 1950, Los Angeles, California 90067. Thornfield attended Hale's interview on June 15, 2023 and submitted a written position statement on Hale's behalf on June 5, 2023.
D. Complainants
1. Jenna Morales — Primary Complainant
Jenna Morales, age 38, holds the position of Vice President of Development at Aurelius Pacific Studios Inc. Morales has been employed by APS since March 2020. In her role, Morales is responsible for overseeing the development of new film and streaming content projects, working closely with senior studio leadership, including Hale, on creative direction, talent acquisition, and project greenlighting.
Morales filed the initial written complaint that triggered this investigation on April 18, 2023, through the Meridian Compliance Solutions Ethics & Compliance Hotline. The complaint was assigned case reference number MCS-1014-00001. Morales initially filed her complaint anonymously but self-identified the following day, on April 19, 2023.
In her complaint and subsequent interview, Morales alleged that Hale subjected her to unwanted sexual advances, sexually explicit comments, and inappropriate physical contact over a period of approximately September 2022 through March 2023, and that she experienced retaliatory treatment after rejecting Hale's advances, including diminishment of her role on certain development projects.
Morales is represented by Sandra Reeves, Partner at Nakamura Reeves LLP, 515 South Flower Street, Suite 3600, Los Angeles, California 90071. Reeves sent a demand letter on Morales's behalf to APS on April 20, 2023, and has corresponded with C&H during the investigation.
2. Claire Ngo
Claire Ngo, age 33, holds the position of Senior Director of Talent Relations at Aurelius Pacific Studios Inc. Ngo has been employed by APS since June 2021. In her role, Ngo is responsible for managing relationships with talent agencies, casting directors, and on-screen talent, and for advising studio leadership on talent-related strategy.
Ngo filed a separate corroborating complaint with Victor Gallegos, VP of Human Resources, on April 24, 2023. In her complaint, Ngo alleged that Hale made sexually suggestive remarks about her attire and asked whether she was "seeing anyone" at a company off-site retreat held at the Monarch Valley Resort in Ojai, California on February 17–18, 2023. Ngo further alleged that following the off-site, she was excluded from three key talent-relations strategy meetings in March and April 2023, which she believed to be retaliatory.
Ngo is not represented by outside counsel in connection with this investigation.
3. Darren Whitfield
Darren Whitfield, age 47, holds the position of Senior Vice President of Physical Production at Aurelius Pacific Studios Inc. Whitfield has been employed by APS since September 2017, predating Hale's tenure as President. In his role, Whitfield oversees the physical production of the studio's slate of films and streaming content, including budgeting, scheduling, location management, and production logistics.
Whitfield voluntarily contacted Victor Gallegos on April 26, 2023, to report his concerns about retaliation. Whitfield alleged that after he raised concerns about Hale's treatment of female employees at a January 23, 2023 leadership meeting, Hale retaliated by reassigning two of Whitfield's highest-profile production projects — internally codenamed "Project Meridian" and "Project Halcyon," with combined budgets of approximately $187 million — to SVP of Production Cameron Briggs, without any documented performance-related justification.
Whitfield is not represented by outside counsel in connection with this investigation.
E. Prior Complaint History
The investigation identified a prior complaint against Hale that predates the current allegations. Victor Gallegos, VP of Human Resources at APS, confirmed during his June 1, 2023 interview that an informal complaint was made against Hale in July 2021 by Serena Whitcomb, who served as Hale's Executive Assistant from April 2019 through September 2021.
Whitcomb's July 2021 complaint alleged that Hale made inappropriate comments of a personal and suggestive nature. The specific content of Whitcomb's 2021 complaint is discussed further in Section VI.D of this report.
Gallegos stated that he handled the July 2021 complaint internally, without initiating a formal investigation. On August 2, 2021, Gallegos issued a verbal counseling to Hale. Significantly, no written documentation of the verbal counseling was created or retained in Hale's personnel file. Gallegos acknowledged that this omission was inconsistent with the documentation requirements set forth in Section 8.1 of the APS Employee Handbook and with standard HR best practices.
No follow-up was conducted with Whitcomb after the verbal counseling was issued. Whitcomb separated from APS in September 2021 — approximately two months after filing her complaint. The circumstances of Whitcomb's departure are discussed further in Section VI.D.
The failure to formally investigate the July 2021 Whitcomb complaint and the failure to document the verbal counseling represent significant policy and procedural deficiencies that are addressed in Section IX of this report.
IV. INVESTIGATION METHODOLOGY
A. Investigation Team
The investigation was conducted by the following members of Calderwood & Harkness LLP:
Bernard Crawford, Responsible Partner, Labor & Employment Practice Group. Mr. Crawford served as the lead partner on the investigation, providing strategic oversight, participating in key witness interviews (including the interview of Marcus Hale on June 15, 2023), and overseeing the preparation of this report. Mr. Crawford has more than 25 years of experience conducting workplace investigations for public and private companies and has particular expertise in matters involving senior executives in the media and entertainment industry.
Renata Vasquez, Billing Partner, Labor & Employment Practice Group. Ms. Vasquez served as billing partner and provided substantive guidance on discrete legal issues, including the application of FEHA supervisor liability principles and the cross-border privilege analysis developed in coordination with Pendleton & Warwick LLP.
Devon Archer, Lead Associate, Labor & Employment Practice Group. Mr. Archer served as the day-to-day investigation lead, coordinating all aspects of the investigation, including document review, witness interview scheduling and preparation, analysis of evidence, and drafting of this report. Mr. Archer conducted or co-conducted the majority of witness interviews and was the primary point of contact for Fiona Blackwood, Linden Forensics Group, and other parties throughout the investigation.
Nadia Petrov, Working Associate, Labor & Employment Practice Group. Ms. Petrov assisted with all aspects of the investigation, including document review, witness interview preparation, legal research, and analysis.
In addition, two contract review attorneys were engaged through C&H's legal staffing arrangements to assist with first-level document review, under the supervision of Mr. Archer and Ms. Petrov. Paralegal support was also provided as needed for document management, interview logistics, and administrative functions.
B. Document Preservation and Collection
On May 2, 2023 — the date of C&H's formal engagement — a litigation hold notice was issued by Aurelius Pacific Studios Inc., through Victor Gallegos, VP of Human Resources. The litigation hold directed the preservation of all documents, electronic communications (including email, Meridian Solutions messages, and text messages), HR records, personnel files, and any other materials relating to Marcus Hale, Jenna Morales, Claire Ngo, Darren Whitfield, and related matters, from January 1, 2019 to the present. The litigation hold was distributed to all relevant custodians and to the APS information technology department. A copy of the litigation hold notice is attached as Appendix C.
On May 8, 2023, C&H retained Linden Forensics Group Inc. ("Linden Forensics"), 201 Mission Street, Suite 1400, San Francisco, California 94105, to perform forensic collection and processing of electronically stored information ("ESI"). Linden Forensics was engaged directly by C&H, as agent of counsel, to preserve the privileged nature of the collection and processing activities.
Forensic collection was conducted by Linden Forensics on May 10–12, 2023. Collections were performed from nine (9) custodians: Marcus Hale, Jenna Morales, Claire Ngo, Darren Whitfield, Victor Gallegos, and four additional SVP-level witnesses whose identities are set forth in the confidential custodian list attached as part of Appendix F.
Data sources included:
• Corporate email (Outlook / Exchange)
• Meridian Solutions (workspace channels and direct messages)
• Text messages (from company-issued mobile devices)
• Shared network drives and document repositories
On May 12, 2023, Linden Forensics provided a chain of custody certification (attached as Appendix G) confirming that all collections were conducted using defensible forensic methodologies, that hash verification was performed on all collected data to confirm integrity, and that secure data transfer protocols were employed throughout the process.
C. Document Review
The total volume of collected data, prior to any processing, comprised approximately 847,000 documents and communications across all custodians and data sources.
After processing by Linden Forensics — which included deduplication, extraction of embedded items, and removal of system files — the collection was reduced to approximately 214,000 unique items.
C&H then applied a combination of search-term filtering and date-range restrictions, designed to capture materials relevant to the allegations under investigation. The search terms and date parameters were developed by Devon Archer and Nadia Petrov and documented in an internal review protocol memorandum dated May 14, 2023. The filtering process reduced the review population to approximately 38,600 items requiring attorney review.
Document review commenced on May 15, 2023 and was completed on July 21, 2023. The review was conducted by Devon Archer, Nadia Petrov, and two contract review attorneys, with quality control performed by Mr. Archer and spot-checks conducted by Ms. Vasquez.
The review protocol established the following coding taxonomy:
• Relevant: Document contains information relevant to the investigation.
• Not Relevant: Document does not contain information relevant to the investigation.
• Privileged: Document is subject to attorney-client privilege or work product protection and should be withheld from production.
• Hot: Document is highly relevant to the investigation and should be escalated for senior attorney review.
The review protocol also established privilege-logging procedures, quality control check intervals (every 500 documents reviewed), and escalation protocols for documents requiring judgment calls on relevance or privilege.
Upon completion of the review:
• Total documents marked as relevant/responsive: 4,218
• Documents marked as "hot" (highly relevant): 312
The 312 hot documents formed the core documentary basis for the factual findings and credibility assessments set forth in this report. These documents are indexed in Appendix O.
D. Witness Interviews
The investigation team conducted interviews of a total of 27 witnesses between May 22, 2023 and July 14, 2023. All interviews were conducted by attorneys of Calderwood & Harkness LLP. The investigation team prepared detailed interview outlines in advance of each interview and documented each interview in a written memorandum prepared promptly after the interview's conclusion.
The witness population consisted of the following:
All witnesses were administered the Upjohn / corporate Miranda warning at the commencement of their interviews, as described in Section II.B above. Witness acknowledgment of the warning was documented in each interview memorandum. A copy of the standard Upjohn warning script is attached as Appendix E.
The following key interviews are referenced and discussed in detail throughout this report:
• Jenna Morales — May 22, 2023
• Claire Ngo — May 25, 2023
• Darren Whitfield — May 30, 2023
• Victor Gallegos — June 1, 2023
• Cameron Briggs — June 8, 2023
• Marcus Hale — June 15, 2023 (approximately 4 hours and 20 minutes, conducted at C&H's Los Angeles office; Graham Thornfield of Thornfield & Associates LLP attended as personal counsel to Hale)
• Serena Whitcomb (former APS employee) — June 22, 2023
A complete witness interview schedule and status tracker, updated through the completion of interviews on July 14, 2023, is attached as Appendix D.
E. Hale's Written Position Statement
Graham Thornfield of Thornfield & Associates LLP submitted a 14-page written position statement on behalf of Marcus Hale on June 5, 2023 (the "Position Statement"). The Position Statement was submitted in advance of Hale's in-person interview and set forth Hale's response to the allegations under investigation. A copy of the Position Statement is attached as Appendix H.
The Position Statement contained the following key assertions:
• Hale denied all allegations of sexual harassment and denied making any unwanted sexual advances, sexually suggestive comments, or inappropriate physical contact toward Jenna Morales or Claire Ngo.
• Hale characterized the complaints as performance-related grievances by employees who were dissatisfied with legitimate business decisions regarding project assignments and meeting composition.
• Hale asserted that his text messages to Morales were "friendly" and "taken out of context" and denied that they contained sexual content.
• Hale characterized the reassignment of Project Meridian and Project Halcyon from Whitfield to Cameron Briggs as a routine management decision driven by operational needs and production bandwidth considerations.
• Hale denied any retaliatory motive in connection with his management decisions regarding Morales, Ngo, or Whitfield.
The Position Statement and the assertions contained therein have been considered as part of the investigation's analysis and are addressed in the relevant sections of this report.
F. Communications with Outside Counsel for Complainants
Sandra Reeves, Partner at Nakamura Reeves LLP, sent a demand letter on behalf of Jenna Morales to Aurelius Pacific Studios Inc. (attention Victor Gallegos) on April 20, 2023 — two days after Morales filed her hotline complaint. The demand letter alleged violations of the California Fair Employment and Housing Act and demanded, among other things, immediate preservation of all documents and electronic communications relevant to Morales's allegations. A copy of the demand letter is included in the correspondence file attached as Appendix J.
C&H acknowledged the Reeves demand letter by letter dated May 10, 2023, confirming that an independent investigation had been initiated, that a litigation hold had been issued, and that C&H had been retained by the Board to conduct the investigation.
On July 7, 2023, Reeves sent a follow-up letter to C&H expressing concerns about the pace of the investigation, which was then approximately two months old, and requesting interim protective measures for Morales, including a guarantee that Morales would not be subjected to any adverse action during the pendency of the investigation.
C&H responded to the July 7, 2023 letter on July 12, 2023, providing a general status update. The response confirmed that Hale had been placed on paid administrative leave since May 3, 2023 and that his access to all company systems had been suspended, and addressed the request for interim protective measures. C&H's response did not disclose the substance of the investigation or any preliminary findings.
All correspondence with Nakamura Reeves LLP is included in Appendix J. All correspondence with Thornfield & Associates LLP is included in Appendix I.
G. Policies and Documents Reviewed
In addition to the documents collected through the forensic collection process described in Section IV.B, the investigation team reviewed the following policies, agreements, and records:
• AGMG Global Code of Conduct, Version 4.2, effective January 1, 2022.
• APS Employee Handbook, California Supplement, revised March 15, 2022, with particular attention to Section 5.3 (Anti-Harassment & Anti-Discrimination Policy), Section 5.7 (Anti-Retaliation Policy), and Section 8.1 (Complaint & Investigation Procedures).
• AGMG Board Corporate Governance Guidelines, including Section 12 (Executive Conduct Standards).
• Marcus Hale's Employment Agreement dated January 7, 2019, including termination-for-cause provisions at Section 9.2(b).
• Personnel files for Marcus Hale, Jenna Morales, Claire Ngo, Darren Whitfield, Cameron Briggs, and Serena Whitcomb.
• HR records, including complaint logs maintained by Meridian Compliance Solutions LLC (the company's Ethics & Compliance Hotline operator, located at 233 South Wacker Drive, Suite 4100, Chicago, Illinois 60606).
• Organizational charts and reporting structures for Aurelius Pacific Studios Inc., current as of the date of the investigation.
• Board meeting minutes and committee resolutions relevant to the investigation authorization.
• Insurance policy documentation for the EPLI and D&O policies.
Copies of the key policies at issue are compiled in Appendix P.
V. CHRONOLOGY OF RELEVANT EVENTS
The following chronology sets forth the key events relevant to the investigation, organized into three periods: the pre-complaint period, the complaint and intake period, and the investigation period.
A. Pre-Complaint Period (January 2019 – April 17, 2023)
B. Complaint and Intake Period (April 18 – May 1, 2023)
C. Investigation Period (May 2 – August 11, 2023)
VI. FACTUAL FINDINGS
A. Sexual Harassment Allegations — Jenna Morales
The investigation examined Morales's allegations in four categories, each of which is addressed below.
1. Category (a): Vancouver Production Trip — Hotel Room Invitations (October 2022)
Jenna Morales stated during her May 22, 2023 interview that during a production trip to Vancouver, British Columbia in October 2022, Marcus Hale made repeated invitations for her to come to his hotel room. According to Morales, these invitations were ostensibly made to "discuss development projects," but were extended during evening hours after professional activities for the day had concluded. Morales stated that the invitations were made on at least two separate evenings during the trip.
Morales further stated that the invitations were made in a suggestive tone and were accompanied by comments from Hale about wanting to spend time with her "outside of work" in a context that Morales understood to carry a romantic or sexual connotation. Morales stated that she declined the invitations each time and that she felt uncomfortable with the nature and context of the requests.
The investigation identified three corroborating witnesses — all members of the Vancouver production team who were present during the trip. One witness, a current APS employee, stated that he or she observed Hale and Morales in conversations at hotel bar settings on multiple evenings. A second witness, also a current APS employee, confirmed that Hale appeared to be "paying a lot of attention" to Morales during the trip. A third witness, a production contractor engaged for the Vancouver shoot, stated that he or she overheard Hale suggesting that Morales come to his suite "for a nightcap to talk projects" during an evening gathering at the hotel bar. This witness stated that the remark struck him or her as notable because of its tone and the fact that professional meetings had concluded for the day.
In his June 15, 2023 interview, Hale denied making any improper invitations to Morales during the Vancouver trip. Hale stated that production teams routinely discuss projects in informal hotel settings, including hotel bars and suite common areas, and that any invitation he may have extended to Morales was entirely professional in nature. Hale characterized the Vancouver trip as a routine working travel event with no inappropriate conduct.
Documentary evidence confirms that both Hale and Morales were in Vancouver concurrently during October 2022. Travel records and calendar entries confirm overlapping travel dates. Hotel records confirm that both were staying at the same hotel. No direct electronic evidence (email or text messages) of the oral invitations was identified during the document review. However, the consistent corroborating accounts of three independent witnesses, combined with Morales's detailed and internally consistent account, support the finding that the invitations occurred and were made in a context that a reasonable person would perceive as suggestive.
Finding: The allegation that Hale made suggestive invitations to Morales to come to his hotel room during the October 2022 Vancouver trip is substantiated on a preponderance-of-the-evidence standard.
2. Category (b): Sexually Suggestive Text Messages (November–December 2022)
Morales alleged that Hale sent her sexually suggestive text messages on three occasions: November 14, 2022; November 29, 2022; and December 8, 2022. Morales described the messages as expressing romantic and sexual interest, including comments about her physical attractiveness and statements indicating that Hale desired a personal or sexual relationship with her.
The forensic collection conducted by Linden Forensics Group from Hale's company-issued mobile device recovered text messages consistent with the dates and general content described by Morales. The recovered messages were authenticated through hash verification and metadata analysis conducted by Linden Forensics. The messages are among the 312 documents designated as "hot" during the document review and are catalogued in the Key Document Exhibit Index (Appendix O).
The investigation team reviewed the recovered messages in their entirety, including surrounding context (i.e., messages exchanged before and after the identified messages). The language of the messages is sexual in nature and includes comments about Morales's physical attractiveness and explicit expressions of romantic and sexual interest. The messages go well beyond what could reasonably be characterized as collegial or professional communication. Specific message content has been preserved in the confidential Key Document Exhibit Index and is available for Board review.