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he invested principally for that reason. Petitioner was also
provided with a copy of the offering memorandum but chose not to
read it.
In addition, the trusted adviser in the present cases was
Nusholtz, the attorney with whom petitioner had a long-standing
professional relationship and whose judgment he respected and
whose advice he valued. Although Nusholtz did not read the
offering memorandum, he advised petitioner in no uncertain terms
not to invest in any promotion offered by Gordon.
For the foregoing reasons, petitioners’ reliance on Dyckman
v. Commissioner, supra, is misplaced. Likewise, petitioners’
reliance on Zidanich v. Commissioner, T.C. Memo. 1995-382, is
misplaced for essentially the same reasons.
Petitioner also contends that he reasonably relied on the
offering memorandum and the attachments thereto. The short
answer to this contention is that petitioner did not read all of
the offering memorandum.
The record demonstrates that petitioner did not read all of
the offering memorandum but only “browsed” through portions,
apparently choosing to ignore other portions. The offering
memorandum contained numerous caveats and warnings regarding the
business and tax risks of the Dickinson transactions. A careful
review of the offering memorandum, especially the portion
discussing the tax risks, would have caused a prudent investor to
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