- 38 -
his knowledge and investigation of the transaction. For reasons
set forth below, we believe the latter statement more accurately
describes what happened here.
b. Petitioners' Investment Experience, Sophistication,
and Resources
Petitioners claim that they reasonably relied upon Becker
when they knew that: (1) His forte was the tax analysis aspect
of so-called tax shelter transactions and (2) he had no
experience or expertise in plastics materials or plastics
recycling. Yet petitioners' education and professional
experience, and portions of their own testimony in these cases,
indicate that they clearly knew better than to rely upon a person
for advice on matters beyond his or her expertise.
Petitioners Spears and Farrell are very well educated and
exceptionally sophisticated in investment and financial matters.
The two have had outstanding careers investing and managing funds
for wealthy individuals and institutions; without question they
are highly proficient and knowledgeable investors. During
Farrell's employment at Smith, Barney, approximately $50 million
of client funds were Farrell's responsibility. Spears became a
partner at Loeb, Rhoades & Co. less than 10 years after his
initial employment there. At the time of trial Spears, Benzak
Page: Previous 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 NextLast modified: May 25, 2011