- 46 -
would be economically profitable, Becker made two assumptions
that he concedes were unsupported by any hard data: (1) That
there was a market for the pellets; and (2) that market demand
for them would increase.
d. Conclusion Concerning Petitioners' Alleged
Reliance on Becker
Petitioners in these cases are very well educated and highly
accomplished, sophisticated investors. Without question they
possessed the intellect, skills, experience, and resources to
have the viability of the Plastics Recycling transactions
thoroughly investigated.
Petitioners claim to have relied upon Becker for the bona
fides and viability of the Partnership transactions. Yet
Becker's expertise was in taxation, not plastics materials or
plastics recycling, and Spears and Farrell knew this. Moreover,
Becker indicated that he was careful not to mislead any of his
clients regarding the particulars of his limited investigation.
As he put it: "I don't recall saying to a client I did due
diligence * * * [Rather,] I told [my clients] precisely what I
had done to investigate or analyze the transaction. I didn't
just say I did due diligence, and leave it open for them to
define what I might or might not have done."
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