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assistant and office manager for various employers. Petitioner
wife's father, Ralph S. Matsuda (Mr. Matsuda), worked in the
financial services and products industry during the years at
issue and was petitioners' financial adviser. During 1982, Mr.
Matsuda introduced petitioners to Jojoba Hawaii, which was being
promoted as an agricultural research and development partnership.
Jojoba Hawaii was the first agricultural type investment
opportunity that had been proposed by Mr. Matsuda to petitioners.
He provided petitioners with a fairly voluminous private
placement memorandum2 (the offering), which described the
proposed investment and the activities to be conducted through
Jojoba Hawaii. Petitioner wife perused the document but could
not recall whether petitioner husband examined the document.3
Petitioners did not consult an attorney, an accountant, or any
independent expert knowledgeable in the field of agriculture and,
in particular, jojoba production and the economic potential
thereof. Petitioners, nevertheless, invested in Jojoba Hawaii.
On their joint 1982 Federal income tax return, petitioners
reported wages of $77,665 from petitioner husband's employment
with Mark Telephone and $24,426 from petitioner wife's employment
with Applied Materials, Inc. Petitioners also reported interest
2 The private placement memorandum consisted of some 47
pages, plus eight exhibits, and a table of contents.
3 Petitioner husband did not appear at trial.
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