Inverworld, Inc., et al. - Page 184

                                                 - 39 -                                                   
            of a bank failure or other loss of the investment.  Because there                             
            was no Government-sponsored insurance on the non-U.S.                                         
            investments, there was no purpose in dividing the purchases into                              
            amounts of $100,000 or under.  Consequently, all of the non-U.S.                              
            investments were in amounts of $1 million or more, which paid                                 
            higher rates of return.                                                                       
                  LTD offered its clients investments in non-U.S. certificates                            
            of deposit through products named "Eurodeposits", "InverCedes",                               
            and "InverCede2".  LTD offered its clients investments in non-                                
            U.S. term deposits through products named "Liquid Assets" and                                 
            "Term Deposits".  LTD offered its clients a non-U.S. investment                               
            named "Asset Management Account".  The names denoted different                                
            methods of timing of interest paid to the client, availability of                             
            funds, deposit amounts, etc.  Each such certificate of deposit or                             
            term deposits, however, constituted a purchase from an omnibus                                
            account in bank deposits outside the United States and Mexico.                                
                  INC collected quotations of rates on certificates of deposit                            
            and term deposits from various banks and telecopied to the                                    
            promoters term sheets listing all of the quoted rates.  The term                              
            sheets listed the top rate paid by each bank, and promoters                                   
            selling such investments negotiated a rate of return with                                     
            clients.  Promoters could negotiate a lower, but not higher, rate                             
            than the one listed on the term sheets.  To the extent that a                                 
            bank might quote a higher rate of return because of the size of                               
            the pooled deposit or the volume of transactions, LTD was                                     




Page:  Previous  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  Next

Last modified: May 25, 2011