overvaluation and thus manipulation of the market for these securities. In addition, Kimmel was advised to increase his holdings by purchasing stock on margin, without being apprised of the accompanying risks. In essence, Dirks and Peterson actively ignored Kimmel's wishes, utilizing his money to inure to the benefit of Muir.
The second category of alleged fraudulent transactions relates to the evolution of the relationship between Kimmel and Muir. On the advice of Peterson and Dirks, Kimmel became a subordinated creditor of Muir. Defendants continually tried to convince him that Muir was a safe investment, pointing to its famous general partners, such as Mario Andretti, Jimmy Connors and John Denver. When Peterson invited the Kimmel family to the Montreal Grand Prix, Mario Andretti was introduced as a general partner of$450,000.00 which was to be applied to Kimmel's subordinated loan was, without his knowledge, used to increase his partnership interest. Unfavorable publicity caused Kimmel to once again inquire into the safety of his investments. Even after Muir had called in the Securities and Exchange Commission, Peterson still insisted that all investments were safe. On August 17, 1981, Muir closed and a trustee was appointed. It was only then that Peterson advised Kimmel to remove his investments from Muir. However, by that point, he was unable to save his investments. Both Dirks and Peterson promised to reimburse Kimmel for part of his losses; however, both refused to put that promise in writing or honor it.
Although Peterson and Dirks allegedly were principally responsible for these events, many Muir associates and