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plastics recycling technology but also lacked the knowledge
necessary to assess the accuracy of the financial projections
contained in the POM.
Petitioner’s claimed reliance on HG&C was also unreasonable
because petitioner should have known HG&C had a conflict of
interest in advising petitioner to invest in Madison. On
November 24, 1982, petitioner received Madison’s POM from Mr.
Cole, an HG&C employee. The POM informed petitioner that HGSC
and any other qualified broker-dealer would receive a 10-percent
commission for Madison units sold by them. On or around
December 6, 1982, petitioner became a client of HG&C, and HG&C
informed petitioner that it was affiliated with HGSC, that it
relied on HGSC in providing investment advice, and that the two
entities shared some principals and employees. On or around
March 9, 1983, HG&C provided petitioner with a report that
promoted the use of HGSC and tax-sheltered investments and
informed petitioner that HGSC would receive a commission if
petitioner participated in a tax-sheltered investment.
Petitioner’s claimed reliance on HG&C was neither credible
nor reasonable.
iii. Boylan & Evans
Petitioner also claims he reasonably relied on the Boylan &
Evans limited partner opinion. However, petitioner admitted
that he believed Boylan & Evans worked for Madison when it
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