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not eliminate GSC’s obligation, as agreed to by petitioner and by
Gomez, as senior officers of GSC, with regard thereto.
Petitioner deposited managed account funds into GSC’s bank
accounts and into bank accounts in his name. Those funds,
including those deposited into bank accounts in petitioner’s name
were in large part used for the benefit of GSC. Managed account
funds deposited into bank accounts in petitioner’s name were used
by petitioner to pay principal and interest owed to managed
account investors, to pay various business expenses of GSC, and
to purchase securities for GSC that represented hedge
transactions.
As indicated, for 1984, 1985, and 1987, petitioner deposited
$177,778, $158,340, and $200,000, respectively, in managed
account funds into bank accounts in his name. The evidence
establishes that for 1984, 1985, and 1987 petitioner withdrew at
least $172,405, $25,334, and $183,590, respectively, from the
same bank accounts and used these funds for GSC’s benefit.
With regard to the balance of managed account funds that
petitioner deposited into bank accounts in his name, which the
evidence does not establish that petitioner used for GSC’s
benefit, respondent has not established by clear and convincing
evidence that petitioner was not holding these funds as loans and
as an agent for GSC, nor has respondent established by clear and
convincing evidence that petitioner misappropriated these funds
for his personal use.
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