- 23 -
considered Becker knowledgeable with respect to the tax code and
tax advantaged investments. Farrell would not discuss
investments with Becker if they did not have tax benefits.
The tax benefits associated with the Partnership
transactions were a primary investment consideration for Spears.
He understood that he would have taxable income to report when
SAB Associates discontinued its tax straddle business, and that
the investment tax credits from the recyclers would be available
to those partners who rolled over their investments and remained
with SAB Associates. Spears reviewed the offering memorandum for
SAB Recycling, and he and Becker discussed the Sentinel EPE
recyclers and the Partnership transactions in general. Spears
relied upon Becker more than he did the offering materials.
Spears knew he was not able to understand the plastics recycling
technology. He explained that when Spears, Benzak required
analysis of technology investments, the firm "would rely * * * on
others" who had knowledge of the technology in question.
However, even though Spears was the founder and a senior member
of Spears, Benzak, which was a substantial investment counseling
firm, he did not consider it appropriate to "bring resources from
within [his] firm to bear on a personal investment".
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011