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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 any of petitioners or their advisers other than
Becker asked to see those journals for their own examination. 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, SAB Reclamation, and the SAB Recycling Partnerships
generally. He received fees in excess of $500,000 with respect
to the SAB Recycling Partnerships, more than $300,000 of which
was derived from SAB Recovery, SAB Recycling, and SAB
Reclamation. Becker also received fees for investment advice
from some individual investors, including Fredericks but not
Gollin or Fishbach. In addition, Becker Co. received fees from
the SAB Recycling Partnerships for preparing their partnership
returns. As Becker himself testified, potential investors could
not have read the offering materials and been ignorant of the
financial benefits accruing to him.
We find that petitioners' purported reliance on Becker was
not reasonable, not in good faith, nor based upon full
disclosure. Becker's expertise was in taxation, not plastics
materials or plastics recycling, and his investigation and
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