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scrutinize a prospectus or other offering materials prior to
undertaking an investment, but need only read pertinent portions
of such documents and have the remaining portions explained to
them by their advisers. Id.
As it pertains to the instant issue, we find Heasley v.
Commissioner, supra, to be distinguishable on its facts. We do
not believe, as petitioners contend, that the court was declaring
that a claim of negligence can be defeated merely by a taxpayer's
showing that he or she, being unsophisticated, relied on the
advice of a financial adviser, irrespective of whether such
adviser was an insider or whether such advice was reasonable.
See Chamberlain v. Commissioner, supra at 732. Two noteworthy
factors distinguish the facts of the instant case from those in
Heasley. First, unlike the taxpayers in Heasley, who not only
relied on the advice of their investment adviser, but who also
received advice regarding their investment from a certified
public accountant, petitioners relied solely on the advice of
Booker, Encore's promoter.
Another factor that distinguishes this case from Heasley v.
Commissioner, supra, involves petitioners' review of the Encore
prospectus. Although the court in Heasley explained that
unsophisticated taxpayers need read only the pertinent portions
of a prospectus or other offering material in order to exercise
reasonable care, even the most cursory consideration of the
Encore prospectus and its accompanying tax opinion, in light of
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