Bernard Cornfeld

Bernie Cornfeld, International Financier and Playboy
Born:	August 17, 1927 Istanbul, Turkey
Died:	February 27, 1995 London, UK
Occupation:	Financier
Net worth:	$100 million (pre-1970); $1.85 million (post-1970)
Website:	[1]

Bernard "Bernie" Cornfeld (Istanbul 17 August 1927 - London 27 February 1995) was a prominent businessman and international financier who sold investments in US mutual funds. He was born in Turkey. When he moved to the US, he first worked as a social worker but became a mutual fund salesman in the 1950s. Image File history File links Cornfeld. ... August 17 is the 229th day of the year (230th in leap years) in the Gregorian Calendar. ... 1927 (MCMXXVII) was a common year starting on Saturday (link will take you to calendar). ... Istanbul (Turkish: Ä°stanbul, see also: other names) is Turkeys largest city, and its cultural and economic center. ... February 27 is the 58th day of the year in the Gregorian Calendar. ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... For other uses, see London (disambiguation). ... Employment is a contract between two parties, one being the employer and the other being the employee. ... Financier (IPA: /ˌfi nãn ˈsjei/) is an elegant term for a person who handles large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money management. ... Net worth (sometimes net assets) is the total assets minus total liabilities of an individual or company. ... 1927 (MCMXXVII) was a common year starting on Saturday (link will take you to calendar). ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... Motto: (1789 to 1956) (Latin for Out of many, one) In God We Trust (1956 to present) Anthem: The Star-Spangled Banner Capital Washington, D.C. Largest city New York City Official language(s) None at federal level; English (de facto) Government Federal Republic  - President George W. Bush (R)  - Vice... The central idea of a mutual fund is to enable investors to pool their money and place it under professional investment management. ... A social worker is a person employed in the administration of charity, social service, welfare, and poverty agencies, advocacy, or religious outreach programs. ... The 1950s were the decade that spanned the years 1950 through 1959, although some sources say from 1951 through 1960. ...

The Early Years

Bernard Cornfeld's father was a Romainian-Jewish actor; his mother was from a Russian-Jewish family. They moved to America when Bernard was four years old—two years later his father died. The young Brooklyn-raised Cornfeld worked after school each day in fruit stores and as a delivery boy. Although he suffered from a stammer, he had a natural gift for selling and when a schoolfriend's father died, the two of them used the $3,000 insurance money to purchase and run an age and weight guessing stand at the Coney Island funfair.

During the Second World War he joined the US maritime service. Afterwards he went to Brooklyn College, graduating with a degree in psychology, and then did an MA in social work at the New York School of Social Work, Columbia University. He initially worked as a social worker, but then switched to selling mutual fund programs for an investment house. In 1955, he left New York for Paris and started his own compnay selling mutual funds using his savings of a mere few hundred dollars. By selling the mutual funds mostly to American servicemen in Europe, Cornfeld was able to avoid both American and European tax regulations.

The IOS Scandal

In the 1960s, Cornfeld formed his own mutual fund selling company, Investors Overseas Services (IOS), which he incorporated outside the US with funds in Canada and headquarters in Geneva, Switzerland. The main operational offices of IOS were in Ferney-Voltaire, France, a short drive from the Swiss border to Geneva. He hired 25,000 salesmen who sold his 18 mutual funds door-to-door all over Europe, especially in Germany, to small-time investors. He targeted US expatriates and servicemen who sought to avoid US income tax. Cornfeld called it "people's capitalism." The 1960s decade refers to the years from 1960 to 1969, inclusive. ... Investors Overseas Services (IOS) was founded in 1955 by financier Bernard Cornfeld. ... Geneva (pronunciation //; French: Genève //, German: //, Italian: Ginevra) is the second most populous city in Switzerland, situated where Lake Geneva (French Lac Léman) flows into the Rhône River. ... Ferney-Voltaire is a town and commune in the Ain département of eastern France, located between the Jura mountains and the Swiss border. ... Geneva (pronunciation //; French: Genève //, German: //, Italian: Ginevra) is the second most populous city in Switzerland, situated where Lake Geneva (French Lac Léman) flows into the Rhône River. ... World map showing Europe Political map Europe is one of the seven continents of Earth which, in this case, is more a cultural and political distinction than a physiographic one, leading to various perspectives about Europes borders. ... The examples and perspective in this article or section may not represent a worldwide view. ... For other uses, see Capitalism (disambiguation). ...

During the next ten years, IOS raised in excess of $2.5 billion, bringing Cornfeld a personal fortune of more than $100 millon. Cornfeld himself became known for conspicuous consumption with lavish parties. Socially, he was generous and jovial.

In 1962, IOS launched its "Fund of Funds," which meant investment in shares of other IOS offerings. The offering was very popular in the bull market times, and Cornfeld's one-line pitch, "Do you sincerely want to be rich?" became a by-word for its success. However, then the market dropped and the guaranteed dividends had to be paid straight out of the capital—in effect, it had become a pyramid scheme. IOS was forced into Initial Public Offering to meet its costs. The next bear market made many investors cash their funds, and the IOS stock value decreased further. Cornfeld later blamed a "bear raid" and that a number of German banks sold the stock short. 1962 (MCMLXII) was a common year starting on Monday (the link is to a full 1962 calendar). ... A bull market is a prolonged period of time when prices are rising in a financial market faster than their historical average. ... A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. ... An initial public offering (IPO) is the first sale of a corporations common shares to public investors. ... A bear market is a prolonged period of time when prices are falling in a financial market. ...

Share value decreased from $18 to $12 in the spring of 1970. Cornfeld formed an investment pool with some other investors, but they lost when the share value dropped to $2. Even IOS employees and portfolio managers sold their shares. Cornfeld was ousted from IOS in May 1970 and within a year the IOS group collapsed. 1970 (MCMLXX) was a common year starting on Thursday (the link is to a full 1970 calendar). ... // Finance Main article portfolio (finance) In finance, a portfolio is a collection of investments held by an institution or a private individual. ...

Financier Robert Vesco who, at the time, was also in financial trouble, turned to Cornfeld and offered his help. Vesco proceeded to use $500 million worth of IOS money to cover his own investments in his International Controls Corp. When he was discovered, Vesco fled to Bahamas. IOS collapsed and in the process ruined a number of US and European banks. Robert Lee Vesco (born December 4, 1935) is a US financier who fled Securities and Exchange Commission and ended up in Cuba. ...

Personal Life

Cornfeld owned a villa in Geneva, a 12th-century chateau in France, a house in Belgravia, London, and a mansion in Hollywood, as well as a permanent suite in a New York hotel and his own fleet of private planes. He is quoted as saying, "I had mansions all over the world, I threw extravagant parties. And I lived with ten or twelve girls at a time." He had romances with Victoria Principal; Heidi Fleiss; Alana Hamilton (née Collins - a model and former spouse of George Hamilton who subsequently married Rod Stewart [1978-1983]); and Princess Ira of Fürstenberg. Geneva (pronunciation //; French: Genève //, German: //, Italian: Ginevra) is the second most populous city in Switzerland, situated where Lake Geneva (French Lac Léman) flows into the Rhône River. ... Belgravia is a district in the City of Westminster, London, England, to the south-west of Buckingham Palace. ... For other uses, see London (disambiguation). ... ... Official language(s) None, English de facto Capital Albany Largest city New York City Area  Ranked 27th  - Total 54,520 sq. ... Main title caption from Dallas. ... Heidi Fleiss (born December 30, 1965), known as the Hollywood Madam, was convicted in connection with her prostitution ring with charges including pandering and tax evasion. ... George Hamilton may refer to: George Hamilton (actor) (born 1939) His father, a bandleader George Hamilton, IV (born 1937), country music performer George Hamilton, 1st Earl of Orkney (1666-1737) George Hamilton (commentator), gaffe-prone football (soccer) commentator. ... Roderick David Stewart (born January 10, 1945) is an English born singer and songwriter of Scottish descent, most known for his uniquely raspy, gravelly, hoarse-sounding voice and personable singing style, as exemplified in his signature song Maggie May. In a career in its fifth decade, Stewart has achieved 27... Princess Ira zu Fürstenberg (born April 18, 1940) is a European socialite, actress, jewelry designer, and a former public relations manager for the fashion designer Valentino Garavani. ...

Cornfeld settled in Beverly Hills and moved in a circle of movie industry people. He lived in the Grayhall mansion, built in 1909 and at one time leased by Douglas Fairbanks. Known for his playboy lifestyle, Cornfeld numbered among his acquaintances Victor Lownes, Tony Curtis and Hugh Hefner, at whose Playboy Mansion he visited and attended parties. Beverly Hills is a city in the western part of Los Angeles County, California, almost entirely surrounded by the city of Los Angeles. ... Film refers to the celluloid media on which movies are printed. ... Douglas Fairbanks is a name shared by two actors, father and son: Douglas Fairbanks (1883-1939) and his son, Douglas Fairbanks, Jr. ... Victor Aubrey Lownes III (born 1928, Florida, USA). ... Roger Moore and Tony Curtis in The Persuaders! Tony Curtis (born June 3, 1925) is an American film actor. ... Hugh Hefner, publisher of Playboy, as seen on the November 1976 cover of Esquire holding a copy of Hustler. ... Playboy Mansion West, commonly known as The Playboy Mansion, is the Holmby Hills, Los Angeles, California, residence of Playboy magazine publisher Hugh Hefner and many of his playmates. ...

Cornfeld's Decline

A group of 300 IOS employees complained to the Swiss authorities that Cornfeld and his co-founders pocketed part of the proceeds of a share issue raised amoung employess in 1969. Consequently he was charged with fraud in 1973 by the Swiss authories. When Cornfeld visited Geneva, Swiss authorities arrested him. He served 11 months in a Swiss jail before being freed on a bail surety of $600,000. Cornfeld always maintained his innocence, blaming the fraud on other IOS executives. His trial did not take palce until 1979 and lasted three weeks, with Judge Pierre Fournier finally acquitting Cornfeld.

Realising that his "good time" friends left him during his 11 months in jail, Cornfeld began to seriously start thinking about his life and decided for the first time that he wanted a wife and children. In 1976 he married a model, Loraine at his Beverly Hills mansion Grayhall. However, he had difficulty settling down. Polygamy was "considerably simpler than monogamy and a lot more fun," he insisted. He was still worth an estimated $1.85 million.

The Final Years

He returned to Beverly Hills, living less ostentatiously than in his previous years. He developed an obsession for health foods and vitamins, renounced red meat and seldomly drunk alcohol. In his last years he was a chairman of a land development firm in Arizona and also owned a real estate company in Los Angeles. His marriage ended in divorce, and he is survived by a daughter. His daughter, Jessica Cornfeld, wrote an article about her father in the The Mail on Sunday (London, England) 29th June 2003, entitled My father, the playboy who could never get enough lovers, where she suggests that he maintained a close friendship with Heidi Fleiss until his death in 1995. The Daily Mail and its Sunday edition the Mail on Sunday are British newspapers, first published in 1896. ... Heidi Fleiss (born December 30, 1965), known as the Hollywood Madam, was convicted in connection with her prostitution ring with charges including pandering and tax evasion. ...

Bernard Cornfeld suffered a stroke and died of a cerebral aneurysm on 27th February 1995 in London, England. For other uses, see London (disambiguation). ... Royal motto (French): Dieu et mon droit (Translated: God and my right) Englands location (dark green) within the United Kingdom (light green), with the Republic of Ireland (blue) to its west Languages English Capital London Largest city London Area – Total Ranked 1st UK 130,395 km² Population – 60,609...

External references and links

• The Bernie Cornfield Story by Bert Cantor, (Lyle Stuart, Inc., 1970). ISBN 0818400137
• With title quoting Cornfeld's celebrated pitch - Do You Sincerely Want To Be Rich? by Charles Raw with Godfrey Hodgson and Bruce Page (Originally publ. Andre Deutsch, 1971 ISBN 0233963286 ). (Reprinted in 2005 ISBN 0767920066 )
• Article analyzing the workings of IOS and Cornfeld's career
• Article about Grayhall, Cornfeld's Beverly Hills mansion, formerly leased by Douglas Fairbanks