- 35 -
proposed investment including researching EOR technology. The
other taxpayer was a geological and mining engineer whose work
included research of oil recovery methods and who hired an
independent geologic engineer to review the offering materials.
Id. at 166. In the present cases, petitioners were not
experienced or educated in plastics recycling, and they did not
independently investigate the Sentinel recyclers or hire an
expert in plastics to evaluate the Partnership transactions. We
consider petitioners' arguments with respect to the Krause case
inapplicable.
3. Petitioners' Purported Reliance on Advisers
Petitioners claim that they reasonably relied upon the
advice of qualified advisers, specifically several partners at
Shea & Gould. Alter claims that he relied on Feinstein as well.
None of the Shea & Gould partners purportedly relied upon by
petitioners testified in the trials of these cases. Feinstein
testified in the Alter case.
The concept of negligence and the argument of reliance on an
expert are highly fact intensive. Petitioners in these cases are
very well-educated and sophisticated attorneys who at the time of
these investments were members of a leading New York City law
firm. Friedman specialized in corporate and Federal securities
law. Alter specialized in entertainment and labor law and also
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011