Business 8th Edition by Marianne Jennings

تمرين 30

Harlan Nolte and others invested in IFC Leasing Company, a master music recording leasing program. The company was created to acquire and lease master music recordings. Jerry Denby, the executive vice president of IFC, contacted Stephen Weiss, a partner in the law firm of Rosenbaum, Wise, Lerman, Katz Weiss, to draft the prospectus for investors. Mr. Weiss drafted four documents used in the recruitment of investors for IFC. The complex structure of the investments, according to the documents, would have substantial tax consequences (to their benefit) for the investors. After Mr. Nolte and others had made their investments, the IRS issued an opinion that the deductions explained in the prospectus and other documents would not be allowed. Criminal fraud actions were brought against IFC and its officers, as well as Mr. Weiss. The Justice Department also indicted both Mr. Weiss's law firm and his partners. Mr. Weiss's partners and the firm, through its management committee, maintain they cannot be held criminally liable for the actions of one partner. The Justice Department maintains that the firm and the partners were negligent in their supervision of Mr. Weiss and should, therefore, be held criminally liable. Do you agree with the Justice Department's position? Why or why not? [ Nolte v Pearson, 994 F.2d 1311 (8th Cir. 1993)]