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an agricultural research and development partnership. Dr.
Stephan had learned of the Utah I partnership from one of its
promoters, Gary Sheets (Mr. Sheets), who was affiliated with
Coordinated Financial Services (CFS) in Salt Lake City, Utah.
Dr. Stephan provided petitioner with a fairly voluminous
private placement memorandum3 (the offering), which described the
proposed investment in and the activities to be conducted through
Utah I. Petitioner claims that he read the offering; however,
petitioner does not specifically recall reading certain portions
of the offering regarding the risks associated with investment.4
Petitioner alleges that he passed along the offering to his
certified public accountant, Joe Salgo (Mr. Salgo), who routinely
prepared petitioner's Federal income tax returns. Petitioner
further alleges that Mr. Salgo gave a favorable response to
petitioner's potential investment in Utah I, although petitioner
cannot recall any specific conversation he had with Mr. Salgo
regarding Utah I.
3 The private placement memorandum consisted of some 47
pages, plus 8 exhibits, and a table of contents.
4 When questioned at trial about reading the offering
petitioner responded, "I'm sure I read it". However, when asked
whether he recalled reading certain portions of the offering
dealing with the risk factors and highly speculative nature of
the investment, petitioner could not recall reading those
portions. The Court surmises from petitioner's testimony that,
if he did read the offering at all, he certainly did not
accomplish a thorough review thereof.
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