- 43 -
Partnership. We have not audited or reviewed the
accompanying financial statements and, accordingly, do
not express an opinion on them.
We are not independent with respect to Clearwater
Group.
H. W. Freedman & Co. prepared the partnership returns for ECI
Corp. and F & G Corp. The named partner of H. W. Freedman & Co.,
Harris W. Freedman, was the president and chairman of the board
of F & G Corp., and owned 94 percent of a Sentinel EPE recycler.
A June 13, 1983, update submitted into the record by Friedman
contained an April 9, 1983, sales summary showing a first quarter
gross profit of $14.43.
Like Friedman's perfunctory investigation of Clearwater,
Alter's investigation of Poly Reclamation was limited to reading
the offering memorandum and discussing the investment with others
at Shea & Gould. The colleagues he spoke to included Hirshfield,
Carroll, Parker, and Ferraro, in addition to Feinstein, in whom
Alter claims he reposed "particular confidence" based upon their
long professional association. Alter recalled the investigation
by his colleagues at Shea & Gould in general terms, and portions
of his testimony were inconsistent with Feinstein's recollection
of events. For example, Alter testified that he asked Feinstein
to speak with Parker, but Feinstein testified that Parker "didn't
speak to me." Alter was under the impression that "Feinstein's
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