- 29 -
contained in the offering memoranda. See The Private Offering
Memoranda, infra at 43. Nor did they seriously investigate or
educate themselves in the Plastics Recycling transactions.
Testimony by one of respondent's experts establishes that the oil
pricing changes during the late 1970's and early 1980's did not
justify petitioners' claiming excessive investment credits and
purported losses based on vastly exaggerated valuations of
recycling machinery. Moreover, petitioners' alleged blind faith
that oil prices would continue to rise is inconsistent with the
conservative manner in which they approached their oil drilling
ventures. According to Grelsamer, he and Morgan chose and
organized their oil drilling ventures to ensure at least a
minimum return, "whether [the price of] oil went up or down".
Petitioners each earned an engineering degree, Grelsamer
from RPI and Morgan from MIT. Grelsamer worked in the
engineering department of the "leading air conditioning and
refrigeration corporation in the United States, if not the
world." He has reviewed hundreds of preliminary prospectuses over
the course of his career as a money manager. Morgan was employed
in the production of warheads for half-ton bombs at Dresser
Industries. Specifically, he was in charge of machining, and
later he founded a company that made components, assemblies, and
subassemblies for engine manufacturers. In organizing and
syndicating their oil drilling ventures, petitioners took the
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