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July and August 1986, but could not verify the amount of
receivables. Petitioner analyzed the financials and bank
statements Morze gave him and concluded that they did not make
financial sense.
In December 1986, ZZZZ Best went public. Its stock began to
be publicly traded on the National Association of Securities
Dealers Automated Quotations (NASDAQ).
2. 1987
By April 1987, petitioner thought that Minkow and ZZZZ Best
stock were legitimate because of the December 1986 public
offering of ZZZZ Best stock, Minkow’s appearances on talk shows
and in business magazines, and other institutions’ purchases of
ZZZZ Best stock. Petitioner bought 60,000 shares of ZZZZ Best
common stock for $912,560.69 in early April 1987. He sold the
60,000 shares on or before April 15, 1987, for $1,014,621.75,
resulting in a profit of $102,061.06.
Minkow spoke with petitioner frequently from late April
to mid-June 1987 to encourage petitioner corporation to buy
$1,269,328.80 of ZZZZ Best receivables. Minkow thought
petitioner might buy some of ZZZZ Best’s receivables. Minkow
told petitioner that ZZZZ Best’s stock was one of the best NASDAQ
stocks, but he did not try to sell ZZZZ Best stock to petitioner.
Minkow held a press conference on May 28, 1987, to respond
to a newspaper article alleging wrongdoings by him. He announced
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