Charles A. Ballard - Page 14

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          petitioner has made clear his business plan:  Buy an asset (a               
          yacht) that he hoped would retain its value and lease (charter)             
          it out for short periods at rates that will quickly return the              
          capital cost of the asset.  Indeed, petitioner proposes that we             
          find as facts the following:                                                
               Petitioner was an expert at the Firm in designing                      
               investment programs for the short-term utilization of                  
               capital assets at lease rates equal to a high                          
               percentage of their initial cost.  * * *                               
               Petitioner noted significant similarities between the                  
               yacht charter business and these programs in that they                 
               both involved assets that retain a high percentage of                  
               their initial value, a benefit accruing to the asset’s                 
          Petitioner also proposes that we find:                                      
               Petitioner believed that he would have an advantage in                 
               obtaining yacht charters because of his contacts with                  
               firms in the securities industry, which he knew from                   
               his own direct experience were potential frequent users                
               of yacht charters.                                                     
          Respondent has made various objections to those proposed                    
          findings, and we have not made findings of fact in accordance               
          with those proposed findings.  The parties have stipulated,                 
          however, and we have found, that petitioner had no experience as            
          a seaman or with the mechanical operation of yachts, and he had             
          very little personal experience in boating.                                 
               Numerous factors lead us to conclude that petitioner had no            
          objective to make a profit.  Petitioner testified that he had               
          calculated the amount of revenue he needed “to break even”.  He             
          did not testify, however, that he or anyone else determined how             

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