- 49 -- 49 -
Well, generally he would just, you know, talk about it
* * * We had sort of a balancing out process. He would
talk about something looked good and I would say, great
* * * It was sort of implicit in our relationship at
that time and the things we did that [Hertan] would go
about evaluating things * * *.
Fishbach knew that Hertan had spoken to Becker about the
investment. Fishbach testified that he did not know if Hertan
had a background in plastics materials or plastics recycling and
that Hertan never told him "that he was a genius at plastics."
Fishbach had ample opportunity to question Hertan about the
Plastics Recycling transactions and the nature and extent of
Hertan's investigation, but the record in this case indicates
that he did not do so. He never asked Hertan if he had a
background in plastics engineering or recycling. Fishbach
believed that Hertan had thoroughly reviewed the offering
memoranda, and he testified that he understood from Hertan that
PI "seemed to have a real foothold in the marketplace." The
offering memoranda, however, warned that there was no established
market for the recyclers. Fishbach testified that it was hard
for him to say honestly that he "knew all of the tax benefits"
associated with the Partnerships. Yet the tax benefits flowing
from SAB Recovery, SAB Recycling, and SAB Recovery Associates
were reported on the Fishbachs' returns and attached Forms K-1,
which Fishbach testified that he reviewed "in toto." Fishbach
testified that he did not review the financial projections set
out in the offering memoranda; that he did not check the
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