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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. The records in these cases do not
indicate that either Snyder or Busch asked to see those journals
for their own perusal. 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. In fact, as each petitioner stipulated, information
published prior to the Sentinel EPE Recycling transactions
indicated that the price of polyethylene was actually going down,
not up, during the final quarter of 1981.
Becker also had a financial interest in SAB Reclamation and
SAB Recovery. He received fees in excess of $500,000 with
respect to the SAB Recycling Partnerships, more than $200,000 of
which derived from SAB Reclamation and SAB Recovery. Becker also
received fees from individual investors for investment advice.
In addition, Becker Co. received fees from the SAB Recycling
Partnerships for preparing their partnership returns. As Becker
himself testified, petitioners could not have read the offering
materials and been ignorant of the financial benefits accruing to
him.
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