Ethics Case Stephen Murphy owned Intertie, a California company that was involved in financing and managing cable television stations. Murphy was both an officer of the corporation and chairman of the board of directors. Intertie would buy a cable television station, make a small cash down payment, and finance the remainder of the purchase price. It would then create a limited partnership and sell the cable station to the partnership for a cash down payment and a promissory note in favor of Intertie. Finally, Intertie would lease the station bark from the partnership. Intertie purchased more than 30 stations and created an equal number of limited partnerships, from which it received more than 57.5 million from approximately 400 investors. Evidence showed that most of the limited partnerships were not self-supporting but that this fact was not disclosed to investors. Intertie commingled partnership funds, taking funds generated from the sale of new partnership offerings to meet debt service obligations of previously sold cable systems; Intertie also used funds from limited partnerships that were formed but that never acquired cable systems. Intertie did not keep any records regarding the qualifications of investors to purchase the securities and also refused to make its financial statements available to investors. Intertie suffered severe financial difficulties and eventually filed for bankruptcy. The limited partners suffered substantial losses. Does each of the limited partnership offerings alone qualify for the private placement exemption from registration? Should the 30 limited partnership offerings be integrated? Has Murphy acted ethically in this case? Securities and Exchange Commission v. Murphy, 626 F.2d 633, web 1980 U.S. Aplexis 15483 (United States Court of Appeals for the Ninth Circuit)