correspondences between the SEC and MDC; and (d) the expert
report of Andrew Mintzer.
 Mr. Mintzer of Santa Monica, California, is a certified
public accountant (“CPA”) in the U.S. and is a chartered professional accountant, chartered accountant (“CPA, CA”) in Canada.
He has audited hundreds of companies as an auditor with Ernst &
Young, LLP. He has been an expert witness on dozens of matters
involving the determination of whether audits were performed in
accordance with GAAP and/or Public Company Accounting
Oversight Board (“PCAOB”) Standards. He is also a certified
fraud examiner (“CFE”), a professional credential issued by the
Association of Certified Fraud Examiners denoting proven expertise in fraud prevention, detection and deterrence.
 It was Mr. Mintzer’s opinion that MDC’s publicly filed
financial statements and earnings releases contained misrepresentations of material facts as defined in both Canadian and U.S.
accounting rules; more specifically, (a) MDC’s financial statements as of September 30, 2013, December 31, 2013, March 31,
2014, June 30, 2014, September 30, 2014 and December 31, 2014
failed to appropriately account for and disclose unauthorized disbursements to Mr. Nadal that directly resulted in Mr. Nadal
resigning as CEO and returning over $21 million to MDC; (b)
MDC’s certifications that its disclosure controls and procedures
were effective as of September 30, 2013, December 31, 2013,
March 31, 2014, June 30, 2014, September 30, 2014 and December
31, 2014 were misleading given that the company’s internal controls failed to prevent and detect disbursements that “lacked
appropriate substantiation” and that were “improperly paid” to
Mr. Nadal; and (c) MDC’s earning releases issued on October 28,
2013, February 20, 2014 and April 20, 2014 failed to comply with
Canadian and U.S. accounting related requirements concerning
the disclosure of a non-GAAP measure called EBITDA.
 Mr. Mintzer opined that it was a material misrepresentation
that MDC did not disclose the basis for its apparent decision to
delay the disclosure of the subpoena and the SEC investigation,
which investigation included an inquiry into the inappropriate
reimbursement of Mr. Nadal’s expenses, which, in turn, was
a material matter concerning self-dealing or misappropriation by
senior management that ought to have been disclosed. He concluded that the investigation of MDC’s payment to Mr. Nadal to reimburse him for expenses ought to have been disclosed and the failure
to do so was a misrepresentation of a material fact. He opined that
MDC misrepresented that its ICFR was designed and operating
effectively and that this was a material misrepresentation.