- 42 -
and that there was a sufficient base of end-users for the
machines; yet he never saw PI's client list. At the time of the
closing of the Partnerships, Becker did not know who the end-
users were or whether there were any end-users actually committed
to the transaction.
Becker purportedly checked the price of the pellets by
reading trade journals of the plastics industry. However, he did
not use those same journals to investigate the recyclers'
purported value or to see whether there were any advertisements
for comparable machines. 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
Reclamation, and the SAB Recycling Partnerships, generally. He
received fees in excess of $500,000 with respect to the SAB
Recycling Partnerships, and more than $200,000 of those fees was
derived from SAB Recovery and SAB Reclamation. Becker also
received fees for investment advice from some individual
investors. 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 remained ignorant of the
financial benefits accruing to him.
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