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The Bache Trades
Mr. Maduff was able to draw conclusions only with respect to
Tandrill’s 1979 trading through Bache because the documents that
were presented regarding Tandrill’s 1980 trades through Bache were
incomplete.
a. Treasury Bills
The Treasury bill trading began in September 1979 and
continued through the end of the year. Mr. Maduff stated that
taken in isolation, the Treasury bill trading would appear to have
been undertaken with a profit motive. But, he went on to say,
because Tandrill failed to provide records of other interest rate
transactions it may have engaged in during the period, it is
possible that, when viewed in conjunction with transactions in
other brokerage accounts, the Treasury bill positions through Bache
would prove to be mere hedges against these other positions and
thus not reasonably likely to have resulted in net profits.
b. Gold, Silver, and Copper Transactions
Mr. Maduff concluded that Tandrill’s 1979 gold, silver, and
copper transactions were not motivated by the desire to achieve an
economic profit and were taken solely for tax purposes. The gold
and silver trading began on November 1, 1979, and the copper
trading began on November 14, 1979. Every transaction was a
perfectly balanced straddle with an equal number of purchases and
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