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FINDINGS OF FACT
We adopt in full the findings of fact in our prior
memorandum opinions. For convenience, we repeat below some of
the important findings of fact, and we make additional findings
of fact. Petitioners resided in Highland Park, Illinois, at the
time their petition was filed.
From 1973 through 1982, Mr. Resser was a member of the
Chicago Board of Options Exchange (CBOE), a registered national
securities exchange. Mr. Resser held market maker status in
appointed stock options that he traded at the CBOE.2
During taxable year 1982, Mr. Resser executed stock option
trades3 at the CBOE in two accounts, account AMR and account
QRF.4 Account AMR was registered in the name of Bichon Venture
(Bichon), an Illinois limited partnership. Mr. Resser was the
managing general partner of Bichon. Account QRF was a joint
account registered in the name of Mr. Resser and Rialcor
Securities Corp. (Rialcor), the CBOE member firm through which
2 See Resser I for detailed descriptions of both the CBOE
and the market maker function.
3 See Resser I for a discussion of the fundamentals of CBOE
option trading.
4 For the first 3 months of 1982, account QRF was designated
RSR. It was changed to QRF because of a CBOE rule change. In
February 1982, Mr. Resser entered into 27 option transactions on
7 different days, each involving Superior Oil (SOC) stock
options. Respondent did not challenge the SOC transactions in
account RSR because the transactions merely closed option
positions that were open as of Dec. 31, 1981.
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