4
business purpose of IMG was to act as an investment adviser,
provide advice with respect to the buying and selling of
securities, and manage money for clients on a discretionary
basis. The partnership filed a Form ADV, dated August 12, 1983,
with the SEC to register as an investment adviser.
Certain prior activities of the partners were excluded from
IMG's business pursuant to the partnership agreement. One of the
excluded activities of Ivan was a consulting agreement with
Energy Reserves Group (ERG), a publicly held company located in
Wichita, Kansas. Pursuant to the consulting agreement, Ivan,
along with Wayne Swearingen, was to obtain debt or equity
financing for ERG. On November 8, 1984, a public tender offer
was made for all outstanding stock of ERG. Prior to the tender
offer, several individuals purchased substantial quantities of
ERG stock which they sold for a significant profit after
announcement of the tender offer. On November 19, 1984, Bernard
Lounsbury (Lounsbury) tendered checks in the amount of $7,500
each to Peters and Gamm. On November 20, 1985, Mr. Peters
deposited a check into his personal checking account from Kenneth
Mick (Mick) in the amount of $43,000. Lounsbury and Mick were
business associates of Mr. Peters, but were not clients of IMG.
At the time of these payments, the payors were indebted to Peters
in amounts greater than the payments. Mr. Peters reported the
$7,500 as income on his Schedule C for 1984.
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