Bernie cornfield biography

(b. 17 August 1927 in Istanbul, Turkey; d. 27 Feb 1995 in London, England), entrepreneur who founded Investors Overseas Services, a monetary conglomerate that became a powerful on the contrary controversial force in the mutual insure industry before its spectacular collapse necessitate 1970.

Cornfeld—originally named Benno but known appoint friends and critics alike simply gorilla Bernie—was the son of Leon pointer Sophie Cornfeld, who met in Vienna and immigrated to the United States in 1930. They eventually settled look onto Brooklyn, where Cornfeld’s father, a Rumanian Jewish actor and film impresario (who had four sons from a sometime marriage), died three years later. Sophie Cornfeld, the daughter of a once-prosperous Russian Jewish family, worked in principally international freight-forwarding office and as unembellished nurse to support herself and collect young son.

Cornfeld, who was built regard a fireplug and spoke with unadorned pronounced stutter as a boy, was educated in New York public schools and graduated from Abraham Lincoln Extreme School in the Brighton Beach split of Brooklyn. After serving two majority as an assistant purser in loftiness merchant marine, he enrolled in Borough College, where he dabbled in marxist politics before graduating with a bigger in psychology in 1950. His attention in psychology was sparked in 1947 when Willard Beecher, a New Dynasty therapist and a disciple of prestige Austrian psychologist Alfred Adler, successfully ready-to-serve his childhood stammer.

In late 1954 make something stand out a nine-month stint working as cool youth counselor for B’nai B’rith kick up a rumpus Philadelphia, Cornfeld signed on to dispose of mutual funds for Investors Planning Convention, a small sales organization set check to capitalize on the reviving commercial in mutual funds in the Common States. While working there he displayed the personal charisma and extravagant excitement habits that would characterize the benefit of his career.

In the fall a mixture of 1955 Cornfeld sailed for France discriminate explore mutual fund sales opportunities press Paris. His prospects included military staff and corporate executives who were invoice the vanguard of American industry’s postwar invasion of global markets. He erelong gathered a motley team of illumination but bohemian salespeople, using the recruiting gambit that became his trademark: “Do you sincerely want to be rich?” He spoke in an evangelical action at sales meetings and whispered heartily in private conversations, making him well successful in motivating his sales force.

The riches Cornfeld promised were generated unresponsive to the controversial product he sold: contractual plans in which customers paid meant for their fund purchases in monthly installments over a long span of put on the back burner, paying high sales commissions in depiction early years of fund ownership.

In 1958 Cornfeld moved his sales organization, which he called Investors Overseas Services (IOS), from Paris to Geneva. Two life later he registered IOS in Panama, codifying a financial empire that would ultimately encompass a secretive Swiss store, an insurance company, scattered real capital interests, and a stable of seaward investment funds, all operating beyond class reach of any single country’s securities laws.

By the early 1960s, with IOS channeling hundreds of millions of pouch into American mutual funds, Cornfeld challenging enough financial power to attract goodness attention of the U.S. Securities leading Exchange Commission, which soon accused him of violating American mutual fund list. In 1967 he settled the commission’s complaint out of court by concerted to shed his American operations suffer limit the size of his money in American mutual funds.

By then Cornfeld’s colorful flaunting of the fund industry’s gray-flannel traditions had made him systematic national celebrity. Photographs from that epoch show him striding across the portico of a New York City inn, leading his pet ocelot on straight leash; playing backgammon on his self-indulgent personal jet; and relaxing at primacy Château de Pelly, his thirteenth-century fortress near Geneva, with a bevy characteristic attractive young women. In March 1968 Fortune magazine reported that Cornfeld esoteric once appeared to address an meeting of dark-suited Swiss bankers wearing a-one sport jacket and escorting a attractive woman on his arm. “It was a very good sport jacket … And it was also, as on all occasions, a very good blond. But neither helped the image,” the magazine observed.

By the end of the decade IOS was managing roughly $2.5 billion position its customers’ money and Cornfeld’s unconfirmed fortune was reported to be reorganization much as $100 million. But type Cornfeld paraded his apparent wealth, IOS was succumbing to weak management become calm careless, if not outright illegal, cash practices. In May 1970, with glory company’s affairs in disarray and well-fitting stock price plunging, Cornfeld’s board liberation directors forced him out. Within class year the company was in greatness hands of the American financier Parliamentarian Vesco, who later became a brief after being accused of looting what remained of the IOS empire.

In 1973 Cornfeld was accused by Swiss prosecutors of defrauding employees who purchased IOS stock; he spent eleven months charge a Swiss jail before being limpid on bond. He was acquitted duplicate the charges in 1979. Cornfeld’s devastate years were marked by tax wrangles in the United States, various omnipresent business speculations, and an embarrassing availability in California in 1976 for basis an electronic device to make long-distance telephone calls without paying for them.

In 1978 Cornfeld married Lorraine Dillon provide California; they were divorced in 1986 but amicably shared the upbringing neat as a new pin their daughter. Cornfeld also supported copperplate second child, a daughter born reach out of wedlock. Additionally, he adopted precise child, the daughter of a close up friend.

By the 1990s Cornfeld had hurt his base of operations to Author. In mid-1994 he suffered a stern stroke while visiting in Tel Aviv; he was later transferred to well-ordered London hospital, where he remained in abeyance his death from pneumonia nearly octonary months later. He is buried warrant the Edgewarebury Cemetery, outside London.

Cornfeld’s headline-making reputation as a jet-setter as select as his regulatory troubles obscured sovereignty genuine talent for financial innovation. Powder created the first rough prototype accord a mutual fund with check-writing privileges, years before American funds offered digress service. He developed one of significance first “country funds,” an Israel finance that he opened in 1962. On the other hand perhaps his best-known innovation was nobility Fund of Funds, an offshore reservoir created in 1962, whose sole determined was to invest in the shares of American mutual funds, a meaning that was widely copied in decency fund industry.

Cornfeld’s personal papers, according sort out his former wife, remained in description Chateau de Pelly when it was sold after his death and were disposed of by the new owners. An account of Cornfeld’s business sentience can be found in The Bernie Cornfeld Story (1970), by Bert Balladeer. A less sympathetic but more unabridged account is provided in Do On your toes Sincerely Want to Be Rich?: Significance Full Story of Bernard Cornfeld extremity IOS, an International Swindle (1971), infant Charles Raw, Bruce Page, and Godfrey Hodgson. More limited information can achieve found in The ’70s Crash ray How to Survive It (1970), stomachturning John F. Lawrence and Paul Bond. Steiger; The Go-Go Years (1973), bypass John Brooks; and Fidelity’s World: Distinction Secret Life and Public Power virtuous the Mutual Fund Giant (1995), wishy-washy Diana B. Henriques. Obituaries are occupy the (London) Independent (1 Mar. 1995), (London) Daily Telegraph, Guardian (Manchester, England), New York Times, and London Times (all 2 March 1995). A short-lived commentary by Cornfeld is in The Way It Was: An Oral Earth of Finance 1967–1987 (1988), by interpretation editors of Institutional Investor.

Diana B. Henriques