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value the machine. Like Feinstein, Alter did not know that the
Sentinel EPE recycler did not recycle plastic by itself but had
to be used in connection with other machines. Alter did not
review any plastics industry trade journals for competing
recyclers or otherwise inquire as to whether there were any
comparable machines already on the market.
Alter told at least four of his clients that he was
investing in a Plastics Recycling transaction and that the
investment was open to them as well. He told them that he and
other members of Shea & Gould thought that the investment seemed
sound. Feinstein and Alter met with these clients and explained
the details of the investment. Alter did not advise his clients
to read the offering memorandum, but it was available for them to
read. He did not suggest that they consult with any plastics
experts. At least four of Alter's clients, as well as Alter,
invested in a plastics Recycling transaction in 1981. Alter and
those same four clients invested in another Plastics Recycling
transaction in 1982.
Alter and his wife Deborah have no education or work
experience in plastics materials or plastics recycling. Prior to
investing in the Plastics Recycling transactions, Alter did not
know anything about the business of PI and had not seen a
Sentinel EPE or EPS recycler. His knowledge of PI was limited to
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