- 20 -
The discretionary authorizations granted LTD the power to
maintain or to transfer assets in omnibus accounts. In its early
Discretionary Authorizations, as well as in a brochure for
"selected investors who are not residents of the U.S.A.", and a
printed newsletter entitled "InverNews", LTD listed the San
Antonio office as its return address.
Each client also granted a power of attorney to LTD,
allowing LTD to make investments in the name of the client, to
endorse for deposit and collection instruments payable to the
client, and to pay bills and fees of third parties on behalf of
the client. During LTD’s taxable years ended 1984 through 1986,
inclusive, the powers of attorney were notarized in Bexar County,
Texas.
In some cases, the promoter assembled the account opening
documents signed by the client and sent them to San Antonio,
where they were countersigned in the name of LTD. Mr. Fahey
executed "some" discretionary authorizations on behalf of LTD in
the United States.
Once the account was opened, the promoter directed the
client to wire funds to a bank account opened in Texas in the
name of LTD. LTD called this bank account the client clearing
account or clearing account. Pursuant to its consulting
agreement with LTD, INC had the authority to invest the "cash,
securities, and other properties comprising the assets" of LTD's
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011