Malcolm I. Lewin and Trina Lewin - Page 23

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               Petitioners primarily contend that they were not negligent             
          because they reasonably relied on the memorandum and their                  
          advisers.  Petitioners had no education or experience in plastics           
          materials or plastics recycling, nor had they seen a Sentinel EPS           
          recycler, when they invested in SAB Foam.  Moreover, they did not           
          consult with anyone who had such expertise in plastics or                   
          plastics recycling.                                                         
               As an associate for Miller & Summit, petitioner may have               
          learned about business practices of PI long ago, but that in no             
          way establishes him as an authority about PI or the plastics                
          industry.  When petitioner was employed by Miller & Summit and              
          was assigned work for PI, that company was located in New Jersey            
          under different ownership and had not yet manufactured any                  
          recyclers.  By the time of the transactions in issue, PI had                
          moved to Hyannis, Massachusetts.  Nothing in the record                     
          establishes that petitioner had any special knowledge about PI or           
          its business in 1981-82.  Petitioner’s knowledge of SAB Foam,               
          rather, is derived primarily from the memorandum and Miller.                
               The memorandum was essentially a sales-oriented document,              
          and it contained numerous warnings that prospective investors               
          should not rely on it.  Petitioners’ advisers either lacked                 
          knowledge about the subject of the proposed investment or were              
          part of the sales group and therefore inherently and obviously              
          unreliable.  Under the circumstances of this case petitioners’              

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