PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED AT THE DIRECTION OF COUNSEL NOT FOR DISTRIBUTION WITHOUT PRIOR WRITTEN AUTHORIZATION OF COUNSEL
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 via Fiona Blackwood, General Counsel
August 19, 2023
Matter Number: 1017-00005
FINAL REPORT
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED AT THE DIRECTION OF COUNSEL NOT FOR DISTRIBUTION WITHOUT PRIOR WRITTEN AUTHORIZATION OF COUNSEL
TABLE OF CONTENTS
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I. EXECUTIVE SUMMARY
A. Purpose of the Report
Calderwood & Harkness LLP ("C&H") was retained by the Board of Directors of Aurelius Global Media Group PLC ("AGMG" or "the Company") to conduct an independent privileged workplace investigation into allegations of sexual harassment, retaliation, and creating a hostile work environment against Marcus Hale, President of Aurelius Pacific Studios Inc. ("APS"), a wholly owned United States subsidiary of AGMG. This report sets forth the methodology, factual findings, credibility assessments, legal analysis, conclusions, and recommendations resulting from that investigation.
The investigation was authorized on April 28, 2023 by a joint resolution of the People & Culture Committee of the Board of Directors (chaired by Dame Cordelia Ashworth, DBE) and the Audit & Risk Committee of the Board of Directors (chaired by Raymond Okoro). The joint resolution directed that an independent outside law firm be retained to conduct a thorough, impartial, and privileged investigation into the allegations raised against Mr. Hale and to report its findings and recommendations to the Board through the General Counsel.
C&H was formally engaged on May 2, 2023, following execution of the engagement letter between C&H and AGMG. The investigation was conducted between May 2, 2023 and August 19, 2023, the date of this final report.
In connection with the authorization of the investigation, AGMG CEO Elliot Vane was recused from any oversight of or involvement in the investigation due to his direct reporting relationship with Mr. Hale. Mr. Vane was informed of the recusal and the scope of the investigation and was directed not to communicate with Mr. Hale regarding the investigation or the underlying allegations. All matters related to the investigation were routed to the Board committees and to Fiona Blackwood, General Counsel of AGMG.
This report was prepared for and delivered to Fiona Blackwood, General Counsel of AGMG, for distribution to the Board of Directors at her direction. A draft of this report was delivered to Ms. Blackwood on August 11, 2023. On August 16, 2023, C&H presented the findings of the draft report to a joint session of the People & Culture Committee and the Audit & Risk Committee via secure videoconference. The joint committee session lasted approximately two hours and forty-five minutes. Following the presentation, the committee members provided feedback and posed questions to the C&H investigation team. This final version of the report incorporates the committee's feedback and additional clarifications requested during the August 16 session. The substantive findings and conclusions of the report are unchanged from the draft version.
B. Summary of Allegations
The investigation addressed three categories of allegations against Mr. Hale:
1. Sexual harassment of Jenna Morales, Vice President of Development, APS. Ms. Morales alleged that between approximately September 2022 and March 2023, Mr. Hale engaged in a pattern of sexual harassment, including invitations to his hotel room during a production trip, sexually suggestive text messages, inappropriate comments of a sexual nature during a private business meeting, and unwanted physical contact at a company dinner.
2. Sexually inappropriate comments toward Claire Ngo, Senior Director of Talent Relations, APS. Ms. Ngo alleged that during a company off-site event in February 2023, Mr. Hale made sexually suggestive comments about her attire and inquired about her personal romantic life. Ms. Ngo further alleged that following the incident, she was excluded from key strategy meetings in what she believed to be retaliatory conduct.
3. Retaliation against Darren Whitfield, SVP of Physical Production, APS. Mr. Whitfield alleged that after he raised concerns about Mr. Hale's treatment of female employees at a leadership team meeting in January 2023, Mr. Hale retaliated by reassigning two of Mr. Whitfield's highest-profile production projects, with combined budgets totaling approximately $187 million.
The initial complaint was filed on April 18, 2023 by Ms. Morales via the Meridian Compliance Solutions LLC Ethics & Compliance Hotline (case reference MCS-1014-00001). Ms. Morales's hotline submission was initially anonymous; she self-identified on April 19, 2023. Corroborating complaints were subsequently filed by Ms. Ngo (April 24, 2023) and Mr. Whitfield (April 26, 2023), each to Victor Gallegos, Vice President of Human Resources, APS.
C. Summary of Findings
Based on a comprehensive review of documentary evidence, forensic data, and witness testimony obtained during the course of this investigation, C&H has reached the following findings:
Morales Allegations — SUBSTANTIATED. All four categories of alleged sexual harassment by Mr. Hale against Ms. Morales are substantiated. Specifically, the investigation substantiated allegations of (i) hotel room invitations during the October 2022 Vancouver production trip, (ii) sexually suggestive text messages sent on November 14, November 29, and December 8, 2022, (iii) an inappropriate comment of a sexual nature during a one-on-one meeting on January 11, 2023, and (iv) unwanted physical contact at a company dinner on February 3, 2023. These findings are supported by direct documentary evidence — including three recovered text messages authenticated through forensic analysis — and the corroborating testimony of seven witnesses.
Ngo Allegations — SUBSTANTIATED. The allegations of sexually suggestive comments directed at Ms. Ngo during the February 17–18, 2023 company off-site at the Monarch Valley Resort in Ojai, California, and the subsequent exclusion of Ms. Ngo from key strategy meetings in March and April 2023, are substantiated. These findings are supported by two corroborating eyewitnesses who observed the comments at the off-site event, as well as documentary evidence — including calendar records and email correspondence — demonstrating the unexplained removal of Ms. Ngo from recurring meeting invitations.
Whitfield Allegations — SUBSTANTIATED. The allegation that Mr. Hale retaliated against Mr. Whitfield by reassigning Project Meridian and Project Halcyon (combined production budgets of approximately $187 million) is substantiated. Email evidence recovered during the investigation demonstrates that Mr. Hale directed the reassignment on February 6, 2023, only fourteen days after Mr. Whitfield raised concerns about Mr. Hale's conduct toward female employees at a January 23, 2023 leadership team meeting. No contemporaneous performance-related or operational justification for the reassignment was documented by Mr. Hale or communicated to the reassigned supervisor, Cameron Briggs.
Policy Deficiencies Identified. In addition to the individual substantive findings, the investigation identified significant deficiencies in APS's complaint-handling procedures, human resources documentation practices, and ethics hotline-to-investigation escalation protocols. These deficiencies contributed to the failure to detect and address Mr. Hale's pattern of conduct at an earlier stage. In particular, a prior informal complaint against Mr. Hale by former Executive Assistant Serena Whitcomb in July 2021 was handled without a formal investigation, and the resulting verbal counseling was not documented in writing or placed in Mr. Hale's personnel file.
D. Summary of Recommendations
Based on the foregoing findings and conclusions, C&H makes the following recommendations to the Board of Directors:
1. Termination of Marcus Hale. The Board should authorize the termination of Mr. Hale's employment for cause under Section 9.2(b) of his employment agreement dated January 7, 2019. The substantiated findings of sexual harassment and retaliation constitute ample grounds for termination for cause under both the employment agreement and applicable California law.
2. Enhanced Anti-Harassment Training. Mandatory enhanced anti-harassment and anti-retaliation training should be implemented for all senior leaders at APS (at the Vice President level and above), to be completed within ninety days of this report. Consideration should be given to extending this training company-wide across AGMG.
3. Policy Revisions. The APS Employee Handbook (California Supplement) should be revised to address the identified deficiencies, specifically in Section 5.3 (Anti-Harassment & Anti-Discrimination Policy), Section 5.7 (Anti-Retaliation Policy), and Section 8.1 (Complaint & Investigation Procedures). Corresponding revisions to the AGMG Global Code of Conduct (v4.2) and the AGMG Board Corporate Governance Guidelines (Section 12) should also be considered.
4. Hotline Escalation Procedures. The Company should work with Meridian Compliance Solutions LLC to revise the ethics hotline-to-investigation escalation procedures, including the establishment of defined escalation timelines and mandatory reporting protocols for complaints involving senior executives.
5. Independent Workplace Culture Assessment. An independent third-party firm should be engaged to conduct a comprehensive workplace culture assessment at APS to identify and address any broader cultural issues that may have enabled or permitted the conduct at issue.
6. Remedial Measures for Complainants. Appropriate remedial measures should be implemented for Ms. Morales, Ms. Ngo, and Mr. Whitfield to restore them to the positions and responsibilities they held prior to the events at issue, and to protect them from any further retaliatory conduct.
7. Improvement of HR Documentation Practices. APS should require written memorialization of all counseling, warnings, and disciplinary actions, with copies maintained in the employee's personnel file and provided to the Chief People Officer.
II. PRIVILEGE STATEMENT AND LIMITATIONS
A. Privilege Designation
This report, and all underlying work product, memoranda, interview notes, document analysis, legal research, and attorney-client communications generated in connection with this investigation, are protected by the attorney-client privilege and the attorney work-product doctrine. This report was prepared at the direction of counsel for the purpose of providing legal advice to the Board of Directors of AGMG.
C&H undertook this investigation at the direction and for the benefit of its client, AGMG. Throughout the investigation, C&H acted in its capacity as outside counsel to AGMG, and all work performed was for the purpose of enabling C&H to render legal advice to the Board regarding the allegations against Mr. Hale, the Company's legal obligations and exposure, and appropriate remedial measures.
The attorney-client privilege and work-product protection attaching to this report and the underlying investigation materials belong exclusively to AGMG. Only AGMG — acting through its Board of Directors or its authorized representatives — may authorize the disclosure of this report or any portion thereof, or waive the privilege. No individual witness, employee, officer, or other person interviewed or involved in the investigation has the authority to waive the privilege.
Recipients of this report are reminded that any unauthorized disclosure of this report, or any discussion of its contents with persons not authorized to receive it, may result in a waiver of the attorney-client privilege and work-product protection. All recipients should take appropriate steps to safeguard the confidentiality of this report, including storing it in a secure location, refraining from forwarding or copying it without authorization, and marking any notes or summaries derived from the report as "Privileged and Confidential — Attorney Work Product."
B. Scope and Limitations
This report reflects the factual findings, credibility assessments, legal analysis, and conclusions of the C&H investigation team based on the information and evidence available to C&H as of the date of this report, August 19, 2023. The investigation team made every reasonable effort to identify and review all relevant evidence and to interview all relevant witnesses; however, the following limitations should be noted.
C&H did not possess subpoena power in connection with this investigation. Participation of witnesses in interviews was voluntary. All current employees of APS and AGMG who were requested to participate in interviews cooperated with the investigation. Four former employees were contacted; all four agreed to be interviewed. Mr. Hale, the subject of the investigation, agreed to be interviewed and participated in an interview on June 15, 2023, accompanied by his personal counsel, Graham Thornfield of Thornfield & Associates LLP. Mr. Hale also submitted a fourteen-page written position statement through Mr. Thornfield on June 5, 2023.
The factual findings in this report are made on a "more likely than not" (preponderance of the evidence) standard. This is the evidentiary standard commonly applied in workplace investigations and is consistent with best practices under California law and the guidance of the Equal Employment Opportunity Commission. This standard requires that the evidence supporting a finding be more persuasive than the evidence opposing it. This standard is less demanding than the "beyond a reasonable doubt" standard applicable in criminal proceedings or the "clear and convincing evidence" standard applicable in certain civil proceedings.
This report does not constitute legal advice regarding the potential outcomes of any litigation or administrative proceedings that may arise from the matters investigated, nor does it address potential damages exposure, settlement valuation, or litigation strategy. Those matters are addressed in separate privileged communications between C&H and the General Counsel.
C. Cross-Border Privilege Considerations
Because AGMG is a United Kingdom-headquartered public company and APS is a United States subsidiary, this investigation required coordination across multiple jurisdictions with differing privilege frameworks. C&H coordinated with Pendleton & Warwick LLP, AGMG's UK corporate counsel, located at 20 Fenchurch Street, 8th Floor, London EC3M 3BY, to establish and maintain protocols for preserving privilege across both US and UK jurisdictions.
On May 12, 2023, C&H and Pendleton & Warwick LLP executed a joint memorandum establishing cross-border privilege protocols. The memorandum addressed the differences between the US attorney-client privilege and work-product doctrine, on the one hand, and the UK legal professional privilege (including both legal advice privilege and litigation privilege), on the other. The protocols were designed to ensure that the investigation materials — including this report — would be entitled to protection under both the US and UK privilege frameworks to the greatest extent possible.
Among other measures, the cross-border privilege protocols specified procedures for the handling, marking, storage, and transmission of investigation materials; established a limited distribution list for privileged communications; and addressed the treatment of privilege in the event of any future disclosure requests, regulatory inquiries, or litigation proceedings in either jurisdiction. A copy of the cross-border privilege protocol memorandum is included as Appendix P to this report (referenced but not attached).
III. BACKGROUND
A. Aurelius Global Media Group PLC
Aurelius Global Media Group PLC ("AGMG") is a United Kingdom-headquartered, publicly traded media and entertainment conglomerate incorporated under the laws of England and Wales. AGMG's registered office is located at 45 Aldwych House, Kingsway, London WC2B 6AH, United Kingdom. The Company's shares are listed on the London Stock Exchange's 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 filmed entertainment and streaming divisions are the Company's largest revenue generators, accounting for approximately sixty-two percent of consolidated revenue in the most recent fiscal year.
For the fiscal year ended December 31, 2022, AGMG reported global revenue of approximately £2.94 billion (approximately $3.67 billion at average exchange rates during the period). The Company employs approximately 14,200 individuals worldwide, of whom approximately 4,600 are based in the United States.
The Board of Directors of AGMG comprises eleven members, including seven independent non-executive directors, three executive directors (including CEO Elliot Vane), and a non-executive chairman. The Board maintains standing committees including the People & Culture Committee (chaired by Dame Cordelia Ashworth, DBE), the Audit & Risk Committee (chaired by Raymond Okoro), the Compensation Committee, and the Nominations Committee. The fiscal year of the Company ends on December 31.
B. Aurelius Pacific Studios Inc.
Aurelius Pacific Studios Inc. ("APS") is a Delaware corporation and a wholly owned subsidiary of AGMG. APS operates the Company's United States-based filmed entertainment and streaming content production businesses and is the principal operating entity for AGMG's US studio operations.
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's registered agent in the State of Delaware is Capitol Registered Agents Inc., 1209 Orange Street, Wilmington, Delaware 19801.
For the fiscal year ended December 31, 2022, APS reported revenue of approximately $1.12 billion, representing a significant portion of the filmed entertainment division's overall contribution to AGMG's consolidated results. APS employs approximately 2,300 individuals in the United States, spanning production, development, talent relations, marketing, physical production, post-production, and corporate functions.
APS is the direct employer of all US studio-division personnel, including Marcus Hale, the subject of this investigation. APS's employment policies, including those at issue in this investigation, are established and administered by APS's Human Resources department, subject to overarching guidance from the AGMG Global Code of Conduct and the oversight of AGMG's Chief People Officer, Patricia Sung.
C. Marcus Hale — Subject of Investigation
Marcus Hale, age 54, has served as President of APS since January 2019. In that capacity, Mr. Hale is the senior-most executive of the US studio operations and has responsibility for overseeing all US film and streaming content production. Mr. Hale reports directly to AGMG CEO Elliot Vane. Mr. Hale's direct report team consists of nine Senior Vice Presidents, who collectively manage the various functional areas within APS, including development, physical production, post-production, talent relations, marketing, and business affairs.
Prior to joining APS, Mr. Hale served as Executive Vice President of Production at a competitor studio, where he spent approximately twelve years. He was recruited to APS in late 2018 as part of a strategic initiative by AGMG to expand its US studio operations.
Mr. Hale's employment with APS is governed by an employment agreement dated January 7, 2019. Under the terms of the agreement, Mr. Hale's total annual compensation is approximately $4.7 million, comprising the following components:
• Base salary: $1,850,000 per annum;
• Target annual bonus: $1,390,000 (representing 75.1% of base salary), subject to performance conditions established by the Compensation Committee;
• Equity awards: Approximately $1,460,000 in annual value, consisting of restricted stock units ("RSUs") and performance share grants under the AGMG Long-Term Incentive Plan.
Mr. Hale's employment agreement contains termination provisions at Section 9, including Section 9.2(b), which authorizes termination for cause upon, among other things, the executive's material violation of company policy, material breach of the agreement's covenants, or commission of acts constituting harassment or unlawful conduct in the workplace.
Effective May 3, 2023, following the commencement of this investigation, Mr. Hale was placed on paid administrative leave by the Company. Upon the commencement of his leave, Mr. Hale's access to the Company's email systems, Meridian Solutions messaging platform, internal networks, and all other company systems was suspended. Mr. Hale was instructed not to contact any current employees of APS or AGMG regarding the investigation or the underlying allegations.
Mr. Hale is represented in this investigation by Graham Thornfield, founding partner of Thornfield & Associates LLP, located at 10250 Constellation Boulevard, Suite 1950, Los Angeles, California 90067. All communications with Mr. Hale regarding the investigation were conducted through Mr. Thornfield.
D. Complainants
1. Jenna Morales
Jenna Morales, age 38, is Vice President of Development at APS. Ms. Morales has been employed by APS since March 2020, having joined the Company from a prominent independent production company where she served as Director of Creative Development. In her role at APS, Ms. Morales oversees the development of original film and streaming content projects, managing a team of approximately fifteen development executives and reporting to SVP Rebecca Liang, who in turn reports to Mr. Hale.
Ms. Morales filed the initial written complaint that gave rise to this investigation on April 18, 2023, via the Meridian Compliance Solutions LLC Ethics & Compliance Hotline. The hotline complaint was assigned case reference number MCS-1014-00001. Ms. Morales's initial submission was anonymous; she self-identified on April 19, 2023 by contacting the hotline and providing her name and contact information.
Ms. Morales is represented in this matter by Sandra Reeves, partner at Nakamura Reeves LLP, located at 515 South Flower Street, Suite 3600, Los Angeles, California 90071. On April 20, 2023, Nakamura Reeves transmitted a formal demand letter to APS, addressed to Victor Gallegos and copied to Fiona Blackwood, alleging that Mr. Hale's conduct toward Ms. Morales constituted sexual harassment and hostile work environment harassment in violation of the California Fair Employment and Housing Act ("FEHA"), California Government Code Sections 12940 et seq. The demand letter reserved all rights and remedies available to Ms. Morales under applicable law.
2. Claire Ngo
Claire Ngo, age 33, is Senior Director of Talent Relations at APS. Ms. Ngo has been employed by APS since June 2021. In her role, Ms. Ngo manages relationships with talent agents, managers, and attorneys on behalf of APS's development and production teams. Ms. Ngo reports to SVP Derek Carmichael, who in turn reports to Mr. Hale.
On April 24, 2023, Ms. Ngo submitted a corroborating complaint to Victor Gallegos, VP of Human Resources at APS, describing sexually inappropriate comments directed at her by Mr. Hale during a company off-site event and her subsequent exclusion from key talent-relations strategy meetings. Ms. Ngo's complaint was submitted after she became aware, through internal discussions with colleagues, that Ms. Morales had filed a complaint against Mr. Hale. Ms. Ngo is not separately represented by outside counsel at this time.
3. Darren Whitfield
Darren Whitfield, age 47, is Senior Vice President of Physical Production at APS. Mr. Whitfield has been employed by APS since September 2017, having joined the Company prior to the AGMG acquisition of its predecessor entity. Mr. Whitfield oversees the physical production of APS's slate of film and streaming content projects and reports directly to Mr. Hale.
On April 26, 2023, Mr. Whitfield voluntarily contacted Victor Gallegos to report retaliation concerns. Mr. Whitfield stated that after he raised concerns about Mr. Hale's treatment of female employees during a leadership team meeting in January 2023, Mr. Hale retaliated by reassigning two of Mr. Whitfield's highest-profile production projects. Mr. Whitfield's complaint was submitted independently; he did not coordinate with Ms. Morales or Ms. Ngo prior to filing his complaint. Mr. Whitfield is not separately represented by outside counsel at this time.
E. Prior Complaint History
The investigation identified a prior complaint against Mr. Hale that is relevant to the current findings. In July 2021, Serena Whitcomb, who served as Executive Assistant to Mr. Hale from April 2019 to September 2021, made an informal complaint alleging inappropriate comments by Mr. Hale. Ms. Whitcomb reported the comments to Victor Gallegos, VP of Human Resources at APS.
Mr. Gallegos handled the complaint internally without initiating a formal investigation. On August 2, 2021, Mr. Gallegos issued a verbal counseling to Mr. Hale, advising him that his comments to Ms. Whitcomb were inappropriate and directing him to conduct himself in accordance with company policy.
Critically, no written documentation of the verbal counseling was prepared or retained. No memorandum, email confirmation, or other written record reflecting the counseling was placed in Mr. Hale's personnel file. No written notification was provided to Mr. Hale memorializing the counseling or the expectations communicated to him. The absence of written documentation represents a significant policy deficiency identified by this investigation, as discussed further in Section VIII of this report.
Mr. Gallegos did not escalate the Whitcomb complaint to the General Counsel, the Chief People Officer, or any member of the AGMG Board. No report was made to the ethics hotline, and no follow-up with Ms. Whitcomb was documented.
Ms. Whitcomb separated from APS in September 2021, approximately two months after making her complaint. The circumstances of her separation are addressed in Section VI.E of this report.
IV. INVESTIGATION METHODOLOGY
A. Engagement and Staffing
C&H was formally engaged on May 2, 2023 by AGMG's Board of Directors, acting through Fiona Blackwood, General Counsel, to conduct this independent privileged workplace investigation. The engagement letter was executed on May 2, 2023 and is included as Appendix A to this report (referenced but not attached). The engagement letter set forth the scope, terms, and privilege framework for the investigation, as well as the reporting structure and fee arrangements.
C&H's offices are located at 1999 Avenue of the Stars, Suite 2800, Los Angeles, California 90067 (principal office for this engagement) and 780 Seventh Avenue, 34th Floor, New York, New York 10019 (supporting office).
The C&H investigation team was staffed as follows:
• Bernard Crawford, Partner, Los Angeles — Responsible Partner. Mr. Crawford supervised all aspects of the investigation and served as the primary point of contact for the Board liaison and General Counsel. Mr. Crawford has over twenty-five years of experience conducting complex workplace investigations for public companies in the entertainment, technology, and financial services industries. Mr. Crawford devoted approximately 82 hours to this engagement.
• Renata Vasquez, Partner, Los Angeles — Billing Partner. Ms. Vasquez provided strategic oversight and legal analysis, with particular focus on FEHA liability and remedial recommendations. Ms. Vasquez devoted approximately 47 hours to this engagement.
• Devon Archer, Associate, Los Angeles — Lead Associate. Mr. Archer managed the day-to-day conduct of the investigation, including witness interview scheduling and preparation, document review supervision, and drafting of investigation memoranda and this report. Mr. Archer devoted approximately 438 hours to this engagement.
• Nadia Petrov, Associate, New York — Working Associate. Ms. Petrov conducted witness interviews (jointly with Mr. Archer and Mr. Crawford), supervised the forensic collection process, and performed detailed document review and analysis. Ms. Petrov devoted approximately 612 hours to this engagement.
• Two Contract Review Attorneys — engaged through C&H for the purpose of conducting first-level document review. The contract review attorneys devoted a combined total of approximately 520 hours to document review.
• Paralegal Support — C&H paralegal staff provided logistical, scheduling, and administrative support, devoting approximately 18 hours to the engagement.
The Board designated Fiona Blackwood, General Counsel of AGMG, as the Board's liaison with C&H for all investigation-related communications. Victor Gallegos, VP of Human Resources at APS, served as the internal HR contact for purposes of coordinating document production, employee access, and logistical matters.
B. Document Collection and Review
1. Forensic Collection
At C&H's direction, Linden Forensics Group Inc. ("Linden Forensics"), located at 201 Mission Street, Suite 1400, San Francisco, California 94105, was retained on May 8, 2023 as agent of counsel to perform forensic collection and processing of electronically stored information ("ESI") relevant to the investigation. Linden Forensics was engaged under the attorney-client privilege and work-product doctrine, and all work performed by Linden Forensics was at the direction and under the supervision of C&H.
The forensic collection was performed between May 10 and May 12, 2023. Data was collected from nine custodians: Marcus Hale, Jenna Morales, Claire Ngo, Darren Whitfield, Victor Gallegos, and four additional Senior Vice Presidents identified as potentially possessing relevant information based on preliminary interviews and the organizational structure of APS.
Data sources subject to collection included:
• Company email accounts (Outlook/Exchange);
• Meridian Solutions messaging platform (including direct messages and relevant channels);
• Personal and company-issued mobile device text messages (SMS and Westmark Software);
• Shared network drives and cloud-based storage repositories (including shared folders relevant to the identified custodians); and
• Calendar and scheduling data.
Linden Forensics employed forensically sound collection methodologies, including the use of verified forensic imaging tools and chain-of-custody documentation for all collected data. A chain of custody certification was issued by Linden Forensics on May 12, 2023, confirming that all collected data was preserved in its original form and that the integrity of the data was maintained throughout the collection process. The chain of custody certification is included as Appendix E to this report (referenced but not attached).
2. Processing and Review
The total volume of documents and communications collected from the nine custodians was approximately 847,000 items. After standard processing and de-duplication procedures performed by Linden Forensics, the collection was reduced to approximately 214,000 unique items.
C&H developed a set of search terms and date-range filters in consultation with Mr. Crawford and Ms. Vasquez, designed to identify documents and communications potentially relevant to the allegations under investigation. The search terms were applied to the processed data set, and the date range was limited to January 1, 2019 (the commencement of Mr. Hale's employment at APS) through May 2, 2023 (the date of the engagement). After search-term and date-range filtering, approximately 38,600 items were identified for human review.
Document review commenced on May 15, 2023 and was completed on July 21, 2023. The review was conducted by the C&H investigation team, including Mr. Archer, Ms. Petrov, and the two contract review attorneys, under the supervision of Mr. Crawford and Ms. Vasquez. The review was structured in two tiers: first-level review by the contract review attorneys, who coded documents for relevance, responsiveness, and privilege; and second-level review by Mr. Archer and Ms. Petrov, who conducted detailed substantive analysis of all documents coded as relevant or responsive.
Of the approximately 38,600 items reviewed, a total of 4,218 documents were marked as relevant or responsive to the investigation. Of those, 312 documents were designated as "hot" — meaning highly relevant to the core allegations and likely to be significant to the factual findings. The "hot" documents included, among other things, the three recovered text messages from Mr. Hale to Ms. Morales, Meridian Solutions messages reflecting contemporaneous disclosures by Ms. Morales and Ms. Ngo to colleagues, email chains related to the reassignment of Mr. Whitfield's projects, meeting invitations and calendar records reflecting Ms. Ngo's exclusion from strategy meetings, and internal communications related to the July 2021 Whitcomb complaint.
3. HR Records and Policy Documents
In addition to the forensic collection of ESI, C&H requested and received hard-copy and electronic human resources records and policy documents from APS. These materials were provided by Victor Gallegos, VP of Human Resources at APS, and Patricia Sung, Chief People Officer of AGMG.
HR records reviewed included personnel files for Mr. Hale, Ms. Morales, Ms. Ngo, Mr. Whitfield, and Ms. Whitcomb; performance evaluations; compensation records; employment agreements; organizational charts; and complaint and investigation records maintained by APS's HR department.
The following company policies were reviewed and analyzed in detail:
• AGMG Global Code of Conduct, Version 4.2 (effective January 1, 2022);
• APS Employee Handbook, California Supplement (revised March 15, 2022), with particular focus on Section 5.3 (Anti-Harassment & Anti-Discrimination Policy), Section 5.7 (Anti-Retaliation Policy), and Section 8.1 (Complaint & Investigation Procedures); and
• AGMG Board Corporate Governance Guidelines, Section 12 (Executive Conduct Standards).
Copies of these policies are included as Appendix S to this report (referenced but not attached).
C. Witness Interviews
C&H conducted twenty-seven witness interviews between May 22, 2023 and July 14, 2023. The interviews were conducted in person at C&H's Los Angeles office, at APS's Burbank headquarters, and by secure videoconference, depending on the witness's location and availability. Each interview was conducted by at least two members of the C&H investigation team, typically Mr. Crawford or Ms. Vasquez (or both) together with Mr. Archer and/or Ms. Petrov.
The twenty-seven witnesses interviewed fell into the following categories:
• Three complainants: Jenna Morales, Claire Ngo, and Darren Whitfield;
• Sixteen current employees of APS, including members of Mr. Hale's leadership team, colleagues of the complainants, and HR personnel;
• Four former employees of APS, including Serena Whitcomb;
• Three third-party production contractors who had observed relevant interactions during production activities; and
• One subject: Marcus Hale.
A complete list of witnesses interviewed, including names, titles, and interview dates, is included as Appendix G to this report (referenced but not attached). The interview schedule and status tracker (updated through July 14, 2023) is included as Appendix F (referenced but not attached).
All witness interviews were preceded by an Upjohn/corporate Miranda admonition, pursuant to which each witness was advised of the following:
(a) C&H represents AGMG, not the individual witness;
(b) The interview is being conducted as part of a privileged investigation at the direction of AGMG;
(c) The communications during the interview are protected by the attorney-client privilege, which belongs to AGMG and not to the individual witness;
(d) AGMG, and not the individual witness, has the sole authority to decide whether to waive the privilege and disclose the contents of the interview; and
(e) The witness should not disclose the substance of the interview to other employees or to third parties.
A copy of the standard Upjohn/corporate Miranda warning script used in the investigation is included as Appendix H to this report (referenced but not attached).
The interview of Marcus Hale was conducted on June 15, 2023 at C&H's Los Angeles office. The interview lasted approximately four hours and twenty minutes. Mr. Hale was accompanied by his personal counsel, Graham Thornfield of Thornfield & Associates LLP. Prior to the interview, Mr. Hale was provided with the Upjohn/corporate Miranda admonition and confirmed his understanding that C&H represented AGMG, not Mr. Hale individually. Mr. Hale and Mr. Thornfield were given the opportunity to ask clarifying questions about the admonition before the interview commenced.
On June 5, 2023, in advance of the scheduled interview, Mr. Thornfield submitted a fourteen-page written position statement on behalf of Mr. Hale. The position statement set forth Mr. Hale's response to the allegations under investigation, denied all allegations of sexual harassment and retaliation, and characterized the complaints as performance-related grievances. The position statement is included as Appendix I to this report (referenced but not attached). The contents of the position statement are addressed in Section VI.D of this report.
D. Litigation Hold
On May 2, 2023, the same date as C&H's engagement, C&H drafted a litigation hold notice for issuance by APS. The litigation hold was issued by APS, through Victor Gallegos, and directed the preservation of all documents and electronically stored information potentially relevant to the allegations under investigation. The preservation directive covered all relevant documents from January 1, 2019 (the commencement of Mr. Hale's employment at APS) to the present.
The litigation hold notice was distributed to all identified custodians, including Mr. Hale, the three complainants, and other APS employees identified as potentially possessing relevant information. Custodians were instructed to preserve all potentially relevant documents in their possession, custody, or control, including emails, text messages, instant messages, notes, memoranda, calendars, and any other materials related to the subject matter of the investigation.
A copy of the preservation notice was transmitted to Nakamura Reeves LLP, counsel for Ms. Morales, on May 5, 2023. Nakamura Reeves acknowledged receipt of the preservation notice on May 10, 2023 and confirmed that Ms. Morales would comply with the preservation directive. The litigation hold notice is included as Appendix C to this report (referenced but not attached).
E. Coordination with External Parties
Throughout the course of the investigation, C&H coordinated with several external parties as necessary to protect the interests of AGMG and ensure compliance with applicable legal and regulatory obligations.
Pendleton & Warwick LLP (UK Counsel). As described in Section II.C above, C&H coordinated with Pendleton & Warwick LLP, AGMG's UK corporate counsel, on cross-border privilege protocols to ensure that the investigation materials would be entitled to privilege protection under both US and UK law.
Greystone Advisors LLP (External Auditor). C&H, in consultation with Ms. Blackwood, notified Greystone Advisors LLP, AGMG's external auditor, of the investigation in connection with potential financial reporting implications. The notification related specifically to the potential impact of the investigation's outcome on the financial treatment of Mr. Hale's employment agreement, including the termination-for-cause and change-of-control provisions, as well as any potential contingent liabilities arising from the allegations.
Kessler & Dunn Insurance Brokers Ltd. (Insurance Broker). C&H, in consultation with Ms. Blackwood, notified Kessler & Dunn Insurance Brokers Ltd., AGMG's insurance broker, regarding potential directors' and officers' ("D&O") liability insurance claims and employment practices liability insurance ("EPLI") claims arising from the investigation.
Northbridge Mutual Insurance Co. (EPLI Carrier). A formal notice of potential claim was provided to Northbridge Mutual Insurance Co. on May 5, 2023 under EPLI Policy No. NM-EPLI-2023-00417. The EPLI policy provides a per-claim limit of $10 million and an aggregate limit of $25 million, subject to a self-insured retention of $500,000. The policy period is January 1, 2023 through December 31, 2023. A copy of the EPLI notice letter is included as Appendix Q to this report (referenced but not attached).
Castlemaine Underwriters Ltd. (D&O Carrier). A precautionary notice was provided to Castlemaine Underwriters Ltd. on May 5, 2023 under D&O Policy No. CU-DO-2023-11283, which provides a tower limit of $50 million. The D&O notice was provided on a precautionary basis in the event that any claims are asserted against directors or officers of AGMG or APS in connection with the matters under investigation. A copy of the D&O notice letter is included as Appendix R to this report (referenced but not attached).
F. Standard of Proof
The factual findings set forth in this report are made on a "preponderance of the evidence" standard, also referred to as the "more likely than not" standard. Under this standard, a factual finding is substantiated if the evidence supporting the finding is more persuasive than the evidence against it — that is, if it is more likely than not that the alleged conduct occurred as described.
The preponderance of the evidence standard is the standard of proof most commonly applied in workplace investigations and is consistent with best practices as articulated by the Equal Employment Opportunity Commission, the California Department of Fair Employment and Housing (now the California Civil Rights Department), and the Association of Workplace Investigators. This standard reflects the civil, non-criminal nature of workplace investigations and balances the interests of complainants, respondents, and the employer in reaching fair and well-supported findings.
V. APPLICABLE LEGAL STANDARDS AND COMPANY POLICIES
A. California Fair Employment and Housing Act (FEHA)
The California Fair Employment and Housing Act, California Government Code Sections 12940 et seq., is the principal state law governing workplace harassment, discrimination, and retaliation in California. FEHA applies to APS as an employer of more than five employees in the State of California. The following provisions of FEHA are directly relevant to the allegations investigated in this matter.
Section 12940(j) — Prohibition on Sexual Harassment. FEHA prohibits an employer from harassing an employee on the basis of sex, which includes sexual harassment. Sexual harassment under FEHA encompasses two theories of liability:
Quid pro quo harassment occurs when submission to unwelcome sexual conduct is made, explicitly or implicitly, a term or condition of an individual's employment, or when submission to or rejection of such conduct is used as the basis for employment decisions affecting the individual. Examples include conditioning promotions, assignments, or favorable treatment on the acceptance of sexual advances.
Hostile work environment harassment occurs when unwelcome sexual conduct is sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment. The standard is evaluated from the perspective of a reasonable person in the complainant's position, taking into account the totality of the circumstances, including the frequency and severity of the conduct, whether the conduct was physically threatening or humiliating, and whether the conduct unreasonably interfered with the employee's work performance.
Supervisor Harassment Liability. Under California law, an employer is strictly liable for harassment committed by a supervisor. See State Dep't of Health Servs. v. Superior Court (McGinnis), 31 Cal. 4th 1026 (2003). A "supervisor" for purposes of FEHA includes any individual who has the authority to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or who has the authority to direct them or to adjust their grievances, or who effectively recommends such action. Mr. Hale, as President of APS, unquestionably holds supervisory authority over all three complainants — directly over Mr. Whitfield, and indirectly (through the chain of command) over Ms. Morales and Ms. Ngo. APS is therefore strictly liable for any harassment committed by Mr. Hale against these individuals.
Section 12940(h) — Prohibition on Retaliation. FEHA prohibits an employer from retaliating against any person because the person has opposed any practices forbidden under FEHA, or because the person has filed a complaint, testified, or assisted in any proceeding under FEHA. "Protected activity" under this section includes, but is not limited to, filing a formal complaint, reporting harassment to a supervisor or HR, and raising concerns about the treatment of other employees. An adverse employment action — such as reassignment of duties, exclusion from meetings, demotion, or termination — taken in response to protected activity constitutes unlawful retaliation.
To establish a prima facie case of retaliation under FEHA, a complainant must show: (1) engagement in protected activity; (2) an adverse employment action; and (3) a causal link between the protected activity and the adverse action. Temporal proximity between the protected activity and the adverse action, combined with the absence of a legitimate non-retaliatory justification, is probative of retaliatory intent.
Section 12940(k) — Employer's Duty to Prevent Harassment. FEHA imposes an affirmative duty on employers to take all reasonable steps necessary to prevent harassment, discrimination, and retaliation from occurring. This duty includes the obligation to establish, distribute, and enforce anti-harassment policies; to provide anti-harassment training; and to conduct a fair, timely, and thorough investigation of any complaints of harassment, discrimination, or retaliation. An employer's failure to take reasonable preventive and corrective measures may give rise to independent liability under Section 12940(k), separate from and in addition to liability for the underlying harassment.
B. Aurelius Company Policies
1. AGMG Global Code of Conduct, Version 4.2 (effective January 1, 2022)
The AGMG Global Code of Conduct, Version 4.2, effective January 1, 2022, applies to all employees, officers, and directors of AGMG and its subsidiaries worldwide, including APS. The Code of Conduct establishes baseline standards of ethical conduct and compliance, including prohibitions on harassment, discrimination, and retaliation. The Code requires all employees and officers to comply with applicable laws and regulations in all jurisdictions in which the Company operates, to treat colleagues and business partners with dignity and respect, and to report any concerns about potential violations through established reporting channels, including the Meridian Compliance Solutions LLC Ethics & Compliance Hotline.
The Code of Conduct expressly states that retaliation against any individual who in good faith reports a concern or participates in an investigation is strictly prohibited and will result in disciplinary action, up to and including termination of employment.
2. APS Employee Handbook, California Supplement (revised March 15, 2022)
The APS Employee Handbook, California Supplement, revised March 15, 2022, supplements the AGMG Global Code of Conduct with California-specific policies and procedures applicable to APS employees. The following sections are directly relevant to this investigation:
Section 5.3 — Anti-Harassment & Anti-Discrimination Policy. This section prohibits all forms of harassment and discrimination in the workplace, including but not limited to harassment based on sex, gender, gender identity, gender expression, sexual orientation, race, national origin, religion, disability, age, and other categories protected under federal and California law. The policy defines sexual harassment to include "unwelcome sexual advances, requests for sexual favors, and other verbal, visual, or physical conduct of a sexual nature when (a) submission to the conduct is made either an explicit or implicit condition of employment; (b) submission to or rejection of the conduct is used as the basis for an employment decision; or (c) the conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive work environment."
The policy states that harassment by supervisors, managers, co-workers, vendors, contractors, or other third parties is prohibited and that violations of the policy will result in disciplinary action, up to and including termination of employment.
Section 5.7 — Anti-Retaliation Policy. This section prohibits retaliation against any employee who in good faith reports harassment, discrimination, or any other violation of company policy; who files a complaint or participates in an investigation related to such conduct; or who otherwise exercises rights protected by applicable law. The policy defines retaliation broadly to include any adverse action taken against an individual because of the individual's protected activity, including but not limited to termination, demotion, reassignment of duties, exclusion from meetings or projects, and other forms of adverse treatment.
Section 8.1 — Complaint & Investigation Procedures. This section establishes the procedures for reporting, documenting, investigating, and resolving complaints of harassment, discrimination, and retaliation at APS. The policy directs employees to report complaints to their supervisor, to Human Resources, or through the ethics hotline. The policy states that all complaints will be investigated promptly, thoroughly, and impartially. The policy does not, however, contain specific provisions addressing investigations involving senior executives at the Vice President level and above, does not specify the role of the Board of Directors in authorizing or overseeing such investigations, and does not require written documentation of all disciplinary actions, including verbal counseling.
3. AGMG Board Corporate Governance Guidelines, Section 12: Executive Conduct Standards
Section 12 of the AGMG Board Corporate Governance Guidelines establishes standards of conduct for senior executives and officers of AGMG and its subsidiaries. This section requires all senior executives to comply with the AGMG Global Code of Conduct, all applicable company policies, and all applicable laws and regulations. It further provides that the Board of Directors retains the authority to investigate and take action with respect to any executive found to have violated these standards, including the authority to recommend or direct termination of employment.
VI. DETAILED FACTUAL FINDINGS
The following sections set forth the detailed factual findings of the investigation, organized by complainant and allegation category. For each allegation, the report describes the complainant's account, the corroborating evidence, Mr. Hale's position, and the investigative finding. The investigation also addressed Mr. Hale's overall position statement and the prior complaint by Serena Whitcomb. Each factual finding is made on the preponderance of the evidence standard described in Section IV.F above.
A. Allegations of Sexual Harassment Against Jenna Morales
1. Overview. Jenna Morales alleged that between approximately September 2022 and March 2023, Marcus Hale engaged in a course of conduct directed at her that constituted sexual harassment under both FEHA and APS policy. Ms. Morales described four specific categories of conduct, each of which was separately investigated and evaluated: (a) hotel room invitations during a production trip to Vancouver in October 2022; (b) sexually suggestive text messages sent by Mr. Hale between November and December 2022; (c) an inappropriate comment of a sexual nature during a one-on-one business meeting on January 11, 2023; and (d) unwanted physical contact at a company dinner on February 3, 2023.
Ms. Morales's account was first disclosed through her anonymous hotline submission on April 18, 2023, followed by her self-identification on April 19, 2023, and was then elaborated upon in detail during her C&H interview on May 22, 2023. Her account was materially consistent across these three points of disclosure. The investigation identified a total of seven corroborating witnesses across the four categories of alleged conduct, as well as direct documentary evidence in the form of recovered text messages.
2. Category (a): Vancouver Production Trip — Hotel Room Invitations (October 2022)
Ms. Morales alleged that during a production trip to Vancouver, British Columbia, in October 2022, Mr. Hale made multiple invitations for her to come to his hotel room after work-related events. Ms. Morales stated that the production trip lasted approximately five days and involved a team of approximately twelve APS employees who traveled to Vancouver to attend production meetings, scout locations, and review casting for an upcoming streaming series.
According to Ms. Morales, on at least three occasions during the Vancouver trip, Mr. Hale approached her after evening social events — including a team dinner at a restaurant and a production wrap-up reception at the hotel — and invited her to continue the conversation in his hotel room. Ms. Morales stated that Mr. Hale used suggestive language in extending these invitations, including comments such as "we should finish this discussion upstairs" and "I have a bottle of wine in the room, come join me." Ms. Morales stated that on each occasion, she declined the invitation by stating that she was tired or had other plans. She reported that Mr. Hale did not force the issue on any occasion but that the repetition of the invitations and the context in which they were made caused her significant discomfort and distress.
Two colleagues who participated in the Vancouver production trip and were present at the evening events corroborated Ms. Morales's account. Both witnesses stated, independently and without being prompted by leading questions, that they observed Mr. Hale approach Ms. Morales at evening events on more than one occasion during the trip. One witness stated that she observed Mr. Hale lean in close to Ms. Morales and speak to her in a low voice, and that Ms. Morales appeared visibly uncomfortable, stepping back and breaking eye contact. The second witness stated that she observed a similar interaction on a separate evening and that Ms. Morales later confided in her that Mr. Hale had been "making her uncomfortable" during the trip.
Mr. Hale, through his written position statement and his June 15, 2023 interview, acknowledged inviting Ms. Morales for "production discussions" during the Vancouver trip. He stated that the invitations were purely professional in nature and related to discussions about development projects that he wished to continue in a quieter setting. Mr. Hale denied using suggestive language and denied any sexual intent.
Finding: SUBSTANTIATED. The circumstances of the invitations — including the late-evening timing, the invitation to a private hotel room rather than a public space or conference facility, the suggestive language reported by Ms. Morales and consistent with the pattern of conduct established by subsequent allegations, and the absence of any documented business justification for private meetings — combined with the corroborating testimony of two independent witnesses, support a finding that the invitations were unwelcome and sexually motivated. The investigation finds it more likely than not that Mr. Hale's hotel room invitations constituted unwelcome conduct of a sexual nature.
3. Category (b): Sexually Suggestive Text Messages (November–December 2022)
Ms. Morales alleged that between November and December 2022, Mr. Hale sent her a series of text messages that were sexually suggestive in nature. Ms. Morales identified three specific messages, sent on November 14, 2022, November 29, 2022, and December 8, 2022, that she found to be inappropriate and unwelcome.
The forensic collection conducted by Linden Forensics Group Inc. recovered all three text messages from Mr. Hale's company-issued mobile device. The messages were authenticated by Linden Forensics through metadata analysis, including timestamps, sender and recipient identifiers, and device information. The messages were also recovered from Ms. Morales's device and confirmed to match the messages recovered from Mr. Hale's device.
The content of the three messages included:
• November 14, 2022 (9:47 PM): A message commenting on Ms. Morales's appearance at an event earlier that day, using language describing her physical attractiveness in terms that were plainly sexual rather than professional in nature, and including a suggestion to "get together this weekend, just the two of us."
• November 29, 2022 (10:22 PM): A message referencing a photograph Ms. Morales had posted on her personal social media account, commenting on her appearance in terms that were sexualized, and expressing a desire to see her "outside of the office."
• December 8, 2022 (11:08 PM): A message sent late at night with an overtly suggestive invitation to meet, including language that any reasonable reader would interpret as a proposition for a sexual encounter.