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Petitioner maintained offices in all but one of the markets where
Rose’s customers were located. Petitioner, to some extent,
provided more services to its customers than did Rose.
Corresponding to the level of services, the fees charged to
Rose’s customers were 8-13 percent less than those charged to
petitioner’s customers. Generally, Rose’s customers were more
active traders than petitioner’s customers. There were some
additional, but less significant, differences in the customer
bases, and petitioner believed that it generally offered more to
its customers than Rose offered to its customers. Petitioner’s
analysis focused on the value of Rose’s customer accounts and the
income that could be derived from them. On the basis of the
analysis performed by Mr. Dodds and others, petitioner concluded
that customers acquired from Rose would likely assimilate and be
retained as customers of petitioner.
During June 1990, Deloitte & Touche (Deloitte) submitted an
appraisal of the fair market values of the Rose assets to
petitioner. Petitioner used the Deloitte appraisal to allocate
its MADSP to the Rose assets. On the basis of the Deloitte
6(...continued)
appears that each party has merged the Rose’s institutional
customers into another category. Essentially, the parties’
positions are based on three major categories of customer
accounts for petitioner and four major categories for respondent.
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