- 4 - The gross receipts and direct costs relating to LTD’s "Commissions on Foreign Exchange" are as follows: TYE June 30 Gross Receipts Direct Costs 1985 $54,386 $24,750 b. Currency Transactions The second category of currency exchange transactions in which LTD engaged was the sale and purchase of U.S. dollars on behalf of clients. LTD maintained a bank account at Frost Bank in San Antonio that LTD used to collect deposits from clients. LTD called the Frost Bank account the "client clearing account" or "clearing account". LTD engaged in four types of currency (U.S. dollar-peso) transactions described as follows: i. LTD arranged sales of U.S. dollars to a client in exchange for Mexican pesos. The client contacted a promoter in Mexico, who quoted an exchange rate for pesos to dollars. Once the client and the promoter agreed on a rate, the promoter performed the exchange operation from his office in Mexico. The client made pesos available in Mexico to be exchanged, and the promoter documented receipt of the pesos. The promoter then converted the pesos to dollars at a Government-authorized Mexican exchange house. Once the exchange was executed, the promoter directed that the dollars be wired to the clearing account in San Antonio to be credited to the client's account. The transaction appeared as a credit on the client's monthly statement. LTDPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011