Opinion ID: 2029197
Heading Depth: 1
Heading Rank: 4

Heading: Marshall's Investment in Gemini Artists Management, Ltd.

Text: The final transaction between Mr. Jacobs and Marshall before us on appeal does not involve the company. Rather, it involves an entertainment booking agency, Gemini Artists Management, Ltd. (Gemini). In December, 1975, Mr. Jacobs was heavily involved with Gemini as an investor, officer, and general counsel. From the early stages of his relationship with Mr. Jacobs, Marshall had been interested in Mr. Jacobs's other financial dealings. Marshall was interested in Gemini, visited its offices, and asked Mr. Jacobs if he could invest in it. Marshall and Mr. Jacobs discussed such an investment and on January 26, 1976, Marshall purchased 2 1/2% of Gemini's common stock. From its inception until its eventual dissolution, Gemini operated at a loss. At the time of Marshall's investment, Gemini was insolvent in that it was unable to meet its expenses out of its operating revenue. During their numerous discussions concerning Gemini, Mr. Jacobs had frequently asked Marshall to review Gemini's monthly operating statements and had sought Marshall's advice regarding Gemini's operations. At the time Marshall made his investment, Mr. Jacobs had shown Marshall all monthly operating statements for the calendar year 1975. Marshall fully understood that his investment in Gemini was highly speculative. Further, Mr. Jacobs made full disclosure of Gemini's financial condition and did not urge Marshall to make his investment in Gemini. Marshall lost his investment of $25,000 in Gemini and never received any dividend. Mr. Jacobs did not advise Marshall to obtain independent legal advice before making his investment in Gemini.