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there were other comparable machines on the market; and he did
not ask anyone about the market for the Sentinel EPE recycler.
Stone reviewed the Northeast offering memorandum and spoke
with Tomasetti about the visit to Hyannis. Stone knew that
Tomasetti had no expertise in plastics, and Tomasetti never told
Stone that he had consulted with, or intended to consult, anyone
who was not associated with PI or the Partnerships. Stone knew
that Tomasetti was unsure about the value of the Sentinel EPE
recycler, but the value of the machine did not concern Stone. He
also knew that Tomasetti received a commission for sales of
partnership interests. Stone did not investigate the existence
of competing suppliers or manufacturers, or the existence of a
market for the recyclers. Except for two or three discussions
with Tomasetti, Stone did not independently, or through any third
parties, investigate PI or the plastics recycling industry.
Cote spoke with people at Merrill Lynch about leasing
transactions in general, recycling, and speculation about the
price of oil. He did not supply anyone with the Hyannis offering
memorandum or pay for an evaluation of Hyannis, nor did anyone
prepare any kind of report for him. Cote and Frabotta understood
from a client, Global Marine, Inc., an offshore drilling company,
that there was speculation that the price of oil could rise.
Cote spoke to a representative of Finkle & Co. about Hyannis' tax
benefits. He was aware that Burstein had a potential conflict of
interest, that there was no established market for the recyclers,
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