-3-
$2,816,540 theft loss. Respondent disallowed that loss in a
notice of deficiency sent to petitioner on May 17, 2001.
B. Petitioner’s Investment in HPI Stock
Petitioner began investing in stock in or about 1990. At or
about that time, he started receiving unsolicited phone calls
from Jeffrey Weissman (Weissman), Andrew Bressman (Bressman), and
other brokers with the brokerage firm of D.H. Blair & Co., Inc.
(Blair). Weissman suggested to petitioner that he invest in the
initial public offering of a company managed by Weissman’s
father, Martin (Martin). Weissman guaranteed to petitioner that
he would double his money. Petitioner invested $25,000 in the
company and later realized from his investment a profit of
approximately $20,000. Afterwards, Weissman and Bressman
persuaded petitioner to invest in the publicly traded stock of
Health Professionals, Inc. (HPI), a corporation for which Martin
served as the chairman from its (and its predecessor’s) founding
in the 1970s until May 1992.
In August 1992, Weissman and Bressman left Blair and founded
A.R. Baron & Co., Inc. (Baron), a brokerage firm of which
Bressman was the president. Weissman and Bressman continued to
persuade petitioner to invest in HPI without disclosing the fact
that HPI’s predecessor had previously been convicted of fraud.
From February 12 through June 8, 1993, petitioner purchased
307,900 shares of HPI stock at a total cost of $3,527,002. On
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011