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However, Stewart performed no tests on the quality of its output.
He did not know the names of companies who would use the
recyclers and did not inquire about the market for scrap pellets
or the cash-flow to be generated by the recyclers, pellets, or
the investment as a whole.
Storey advised Stewart that he was entitled to a commission
in connection with an investment by any of Stewart's clients in
Southeast or Esplanade. Storey and Stewart agreed to split the
commissions resulting from any subsequent investment by Stewart's
clients in Southeast or Esplanade.
Stewart has no detailed knowledge or expertise in plastics
recycling, machinery, or materials. Instead, he relied on the
individuals associated with Southeast and Esplanade and the
authors of the various opinions appended to the offering
memoranda to have the necessary expertise with regard to the
transactions involved in Southeast and Esplanade.
Stewart advised Gilmore and Wilson about the Clearwater
partnership and told them that it was fully subscribed; however,
he also informed them of the opportunity to invest in Southeast
and/or Esplanade. Prior to investing in Southeast, Gilmore and
Wilson met with Stewart several times. It is unclear whether
Gilmore and Wilson attended these meetings separately. During
these meetings, the energy crisis, the price of oil, and the
benefits of recycling plastic were discussed. Stewart described
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