Lawrence R. Roberson - Page 4

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          him that the Southampton investment had been investigated by                
          MSC, and in fact no such investigation had been done.                       
               At the time he learned of the Southampton investment,                  
          petitioner was not familiar with the music industry or master               
          recordings.  Petitioner claims that he familiarized himself with            
          the music industry by spending numerous hours at the library                
          doing research, talking to some musicians from his church,                  
          attending several seminars about investing in the music                     
          industry, and on one or two occasions, speaking on the phone                
          with someone from Motown Records.  There is no indication,                  
          however, that these efforts included an investigation of the                
          Southampton master recording investment presented to petitioner             
          by Cunningham.1  When asked at trial what he had learned from               
          his research, petitioner stated:  "I learned that it was an                 
          industry where you could make a lot of money if you got a good              
          album--a good person that became popular."  Petitioner provided             
          no evidence, however, that he had researched the profitability              


          1  Petitioner introduced into evidence two brochures he allegedly           
          received at a seminar on investing in the music industry.  One of           
          the brochures is a quarterly report prepared by another master              
          recording leasing company, Audio Leasing Corp., and includes                
          information about the activities of that company as well as news            
          about the music industry generally.  The brochure also emphasizes           
          the alleged tax incentives in investing in master recording                 
          leases.  The second brochure is a glossary of terms used in the             
          music industry.  Neither brochure contains a discussion of the              
          nontax economic benefits to be expected from a master recording             
          lease, nor do they discuss the Southampton investment program at            
          issue in this case.                                                         




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