- 47 -
LTD charged its clients an initial placement cost of 3
percent of the funds placed in the Currency Fund. After the
first year LTD also charged an annual management fee of 1.00
percent of the value of the assets under management. The gross
receipts and direct costs relating to LTD’s "Commissions -
Currency Fund" for each taxable year are as follows:
TYE June 30 Gross Receipts Direct Costs
1986 $116,604 $35,293
1987 264,395 34,480
1988 61,510 1,858
1989 (6,509) - 0 -
b. FEIM Fund
The FEIM (an acronym for Fondo Estragegico De Inversion
Multiple) Fund was available to LTD clients during taxable years
ended June 30, 1986 through 1989. Similar in operation to the
Currency Fund, the FEIM Fund initially consisted of a basket of
GNMA, FNMA, and Federal Home Loan Mortgage Association mortgages.
During taxable year ended June 30, 1988, client funds were
invested in the IFF. During taxable year ended June 30, 1989,
client funds were invested in money market accounts, Euro-
deposits, Pace investments, loans, and investments managed by
Bear Stearns, Morgan Stanley, and Shearson. Clients sent signed
FEIM authorizations directly to INC. However, during the first 2
years, neither LTD nor INC had any role in the investment,
management, or valuation of the FEIM Fund assets. LTD marketed
the investment through its promoters in Mexico, and INC's only
Page: Previous 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 NextLast modified: May 25, 2011