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strategy. Mr. Ackert promoted the STAMPS strategy as a means to
increase the return on FPL’s short-term, fixed-income investments.
At the same time, Mr. Ackert informed FPL that it should rely upon
its own independent accounting, legal, and tax advisers regarding
the consequences of the STAMPS investment strategy. During a
private meeting with Mr. Higgins, Mr. Ackert suggested that the
partnership’s investments could be arranged so that, upon entry
into the partnership, FPL would recognize a capital gain for
Federal income tax purposes and simultaneously create a built-in
loss in its partnership interest.
In late October 1992, Mr. Ackert introduced Mr. Silverstein to
FPL’s representatives. Mr. Silverstein took the opportunity to
explain the MAPS investment strategy and to offer BEA’s investment
services to FPL. In mid-November 1992, FPL representatives met
with Mr. Silverstein at BEA’s New York office. At FPL’s request,
Mr. Silverstein presented FPL with several analyses of the
financial risks and rewards associated with the MAPS investment
strategy under a variety of economic scenarios. Using Treasury
bills (with a then 3 percent annual rate of return) as a benchmark,
Mr. Silverstein projected that the MAPS strategy would allow FPL to
earn between 4 and 7 percent over current Treasury bill yields.
However, Mr. Silverstein cautioned that he could not guarantee a
specific return inasmuch as FPL’s investment would be subject to
market risks. FPL’s representatives concluded that the company
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