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the recyclers. He accepted representations by PI personnel that
they would be marketing the recyclers to clients and that there
was a sufficient base of end-users for the machines, yet he never
saw PI's client list. At the times the Partnerships closed,
Becker did not know who the end-users were or whether there were
any end-users actually committed to the transaction.
Becker purportedly checked the price of the pellets by
reading trade journals of the plastics industry. However, he did
not use those same journals to investigate the recyclers'
purported value or to see whether there were any advertisements
for comparable machines. Information published prior to the
Plastics Recycling transactions indicated that several machines
capable of densifying low density materials were already on the
market, and that the price of polyethylene was declining during
the fourth quarter of 1981. In concluding that the Partnerships
would be economically profitable, Becker made two assumptions
that he concedes were unsupported by any hard data: (1) That
there was a market for the pellets; and (2) that market demand
for them would increase.
Becker had a financial interest in SAB Recovery, SAB
Recycling, and the SAB Recycling Partnerships generally. He
received fees in excess of $500,000 with respect to the SAB
Recycling Partnerships, which included SAB Recovery and SAB
Recycling. Becker also received fees for investment advice from
some individual investors. In addition, Becker Co. received fees
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