- 3 -
Year Shares Sales Price
1983 -- --
1984 2,000 $ 80,199
1985 15,000 $537,979
1986 18,000 $748,081
1987 15,500 $812,326
1988 31,200 $891,008
Late in 1988, petitioner was advised by his account executive,
Ms. Wortz, that he needed to reduce the amount owed in the margin
account between $400,000 and $600,000. Petitioner and Ms. Wortz
agreed to make the margin account reduction in early January
1989. This agreement was not reduced to writing.
Prior to January 3, 1989, Merrill Lynch held in the
securities account 192,514 shares of WalMart stock. The stock
was valued at $6,040,126. By that time, petitioners through
their margin account had borrowed $3,080,889.75 and had $567,137
of available credit. The basis of the stock was eleven cents
($0.11) per share.
On January 3, 1989, petitioner telephoned Ms. Wortz from
Fresno, California. He understood his telephone instruction to
Ms. Wortz to be to sell $100,000 worth of WalMart. She
understood his instruction to be to sell 100,000 shares of
WalMart. On that day, January 3, 1989, Merrill Lynch made the
following sales on behalf of petitioner and account no. 567-
96135:
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