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Background
All facts are stipulated. The stipulated facts and exhibits
submitted therewith are incorporated herein by this reference.
Petitioner's principal place of business was in Woodmere, New
York, when it petitioned the Court.
Petitioner is a professional corporation which provides
medical services in the area of internal medicine. During 1993,
Dr. Steven Greenstein (Greenstein) and Dr. Max Scheer (Scheer)
were petitioner's sole shareholders, each owning 50 percent, and
were employees and officers of petitioner. Dr. Leo Sklar (Sklar)
practiced medicine as an employee and shareholder of petitioner
until 1986, at which time he sold his interest and retired.
During 1993, petitioner had in effect and was the sponsor of
a money purchase plan entitled the Sklar, Greenstein & Scheer
Employee Retirement Plan and Trust (the plan), which plan had
been in existence for several years. Greenstein and Scheer were
the plan trustees during all relevant periods. During 1985, Gary
Zahn (Zahn), a representative of Prudential-Bache Securities,
Inc. (Prudential), approached Sklar, Greenstein, and Scheer about
opening securities accounts with Prudential. Impressed with
Zahn's perceived abilities, Sklar, Greenstein, and Scheer each
opened several personal accounts with Prudential,1 and they
1For example, Sklar, Greenstein, and Scheer, each opened
individual retirement accounts and other higher risk funds, and
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Last modified: May 25, 2011