- 48 -
role was to arrange for transfer of the client funds to Merrill
Lynch in Luxembourg and to include a monthly statement of the
client's allocated share of the fund value. Such valuation was
performed by the fund's managers at Merrill Lynch. By June 30,
1988, LTD had stopped sending funds overseas. In one of its
brochures describing the FEIM Fund, LTD listed the San Antonio
office as its return address.
LTD charged its clients an initial placement cost based on a
sliding scale of 4.00 percent to 0.25 percent, depending upon the
amount of funds placed in the FEIM 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 - FEIM Fund" for each
taxable year are as follows:
TYE June 30 Gross Receipts Direct Costs
1986 $148,354 $44,500
1987 71,716 11,587
1988 (3,000) 116
1989 4,951 - 0 -
c. Matric Fund
The Matric Fund (Matric) was an investment fund financing a
time-share resort in Puerto Vallarta, Mexico. Matric Corp.,
organized in the Cayman Islands, borrowed $10 million from LTD,
with Vallarta Internacional S.A., a Mexican corporation, as its
guarantor. LTD raised the $10 million by seeking commitments
from its clients to invest in Matric.
Page: Previous 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 NextLast modified: May 25, 2011