- 3 -
dam), a certified public accountant, who was a partner of Nicho-
las J. Coscia (Mr. Coscia) in the accounting firm of Coscia and
Amsterdam (Coscia and Amsterdam). Petitioners never had any
problems with Mr. Amsterdam's tax return preparation services.
Sometime during the early 1980's, petitioner asked Mr.
Amsterdam on several occasions for recommendations regarding
possible investment opportunities, but Mr. Amsterdam declined to
make any such recommendations until around 1983. Around that
year, Mr. Amsterdam recommended to petitioner that he invest in
Ridge Energy Systems (Ridge Energy), a limited partnership in
which both Mr. Amsterdam and Mr. Coscia had invested and which
Mr. Amsterdam described to petitioner as a "good investment" that
would allow petitioner to reduce his taxes through a tax credit
and at the same time make a profit.
Based on petitioner's discussions with Mr. Amsterdam and his
review of a document that petitioner believed was a prospectus
(prospectus), it was petitioner's understanding that Saxon Energy
Corporation (Saxon Energy) was to lease certain energy-saving,
cost-efficient heating and cooling systems (energy systems) to
Ridge Energy, Ridge Energy was to re-lease those systems to
various businesses interested in reducing their heating and
cooling costs, and Ridge Energy was to derive a profit for its
partners from that leasing activity.
Before deciding whether to invest in Ridge Energy, peti-
tioner did not (1) review a copy of any lease agreement that
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