Inverworld, Inc., et al. - Page 65

                                                 - 15 -                                                   
            restrictions on the operations of Mexican financial institutions,                             
            having already closed its borders to non-Mexican financial                                    
            institutions.  The culmination of Mexico's restrictive investment                             
            regime was the imposition of exchange controls by presidential                                
            decree during September 1982 and the nationalization of the                                   
            country's private banks.  From that date onward, no Mexican-                                  
            chartered bank or financial institution was permitted to handle                               
            foreign-currency-denominated accounts.  Peso-based investments                                
            lost value.  During 1982, many of the accounts managed by                                     
            InverMexico were diminished as a result of the capital flight.                                
            Clients of InverMexico were sending their money to Merrill Lynch                              
            in the United States and to Swiss and Japanese banks.                                         
                  From its inception through its taxable year ended June 30,                              
            1990, LTD did not file any registration statement, reporting                                  
            statement, or any other statement with any governmental entity in                             
            Mexico.  During each of its taxable years ended June 30, 1984                                 
            through 1990, LTD was not registered to do business in Mexico.                                
            D.    Creation of INC                                                                         
                  Prior to 1983, LTD had fewer than 15 clients.  For the                                  
            administration of the accounts of such clients, LTD used the                                  
            services of United States Trust Co. of New York (Cayman), Ltd.                                
            (United States Trust); Paine Webber; and Shearson, American                                   
            Express, Inc. (Shearson).  United States Trust provided basic                                 
            research, accounting, bookkeeping, reporting, and order-filling                               






Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011