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and portfolio manager at BEA Associates (BEA), an investment
advisory and cash management firm based in New York, to inquire
whether BEA would be interested in serving as the investment
adviser and portfolio manager for potential investors in the STAMPS
strategy. Mr. Silverstein agreed to work with Mr. Ackert’s clients
on the understanding that BEA would be compensated for its services
through management fees computed as a percentage of the assets
under its direction.
BEA, recognized as a leading fixed-income portfolio manager,
utilized an investment strategy with similarities to STAMPS known
as mortgage arbitrage partners or MAPS. The MAPS strategy included
leveraged and hedged investments in U.S. Treasury securities,
asset-backed securities, mortgaged-backed securities, and
international and corporate bonds. Though comparable in some
respects with the STAMPS strategy, the MAPS strategy contemplated
investments in a broader array of securities with maturities
(approximately 3 to 6 months) of shorter duration.
C. Mr. Ackert’s Proposal to FPL
Mr. Ackert was aware that FPL had incurred a substantial
capital loss on its sale of CPG in 1991. In early October 1992,
Mr. Ackert met with FPL representatives in Florida and proposed
that FPL purchase a 98-percent limited partnership interest in a
preexisting domestic limited partnership controlled by an
international bank for the purpose of investing in the STAMPS
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