-185-
investment in Ficom stock. Exh. 9014, at 6. The entry included
a handwritten notation “W/O in 1989.” Id.; Exh. 97, at 5. In
1989, TMT recorded in its trial balance ledger a $15,000 long-
term capital loss on its investment in Ficom, with an adjusting
journal entry explaining the writeoff as follows: “To w/o
worthless stock of Ficom as per note on 1988 TB [trial balance]”.
Exh. 9014, at 21 (AJE 6). TMT claimed a long-term capital loss
of $15,000 related to the Ficom transaction on its tax return for
1989. Exh. 89, Sch. D. As of December 31, 1989, $1,000 of TMT’s
loan to Ficom had not been repaid. Exh. 98.
(v). Ballard’s Disclosures to Goldman Sachs
Goldman Sachs had a conflict of interest policy regarding
partners’ and employees’ outside business affiliations, which
required a written request for consent to establish an outside
business affiliation. Exh. 5938, at 3-4. Goldman Sachs also had
a private securities transaction policy requiring all partners
and employees to notify Goldman Sachs when they personally became
involved in any private securities transactions, including an
investment in a private tax shelter. Id. at 4.
During the period 1987 to 1989, Ballard reported as income
on his tax returns substantial director’s fees from Seabright
Corp. Exhs. 391-393. On October 14, 1988, Ballard submitted a
disclosure statement to Goldman Sachs which stated: “I am
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