Bernard "Bernie" Cornfeld was a prominent businessman and international financier who sold investments in US mutual funds, and who was tried and acquitted for mismanagement of the Investors Overseas Services.
Early life
Bernard Cornfeld was born in Istanbul, in Turkey. His father was a Romanian-Jewish actor; his mother was from a Russian-Jewish family. They moved to America when Bernard was four years old – his father dying two years later. The young Brooklyn-raised Cornfeld worked after school each day in fruit stores and as a delivery boy. He had a stammer as well as a natural gift for selling and when a schoolfriend's father died, the two of them used the US$3,000 insurance money to purchase and run an age and weight guessing stand at the Coney Island funfair. He graduated from Abraham Lincoln High School in Brooklyn and Brooklyn College. He initially worked as a social worker, but then switched to selling mutual funds for an investment house. In 1955, he left New York City for Paris and started his own company selling mutual funds, using his savings of a mere few hundred dollars. The company was named Investors Overseas Services. By selling the mutual funds mostly to American servicemen in Europe, Cornfeld was able to avoid both American and European tax regulations.
Investors Overseas Services
In the 1960s, Cornfeld formed his own mutual fund sales company, Investors Overseas Services, with principal offices in Geneva, Switzerland, although it was incorporated in Panama. He also established mutual funds in various jurisdictions, as noted below. Although the executive headquarters were in Geneva, the main operational offices of IOS were in Ferney-Voltaire, France, across the French border from Geneva. Cornfeld decided that mutual funds should take their fees from the profits they made for their investors, not just a percentage of the money invested. The IOS system collapsed in 1970. Bernie Cornfeld was arrested in Switzerland in 1973, sentenced to 11 months in preventive prison, but was finally acquitted in 1979 and kept part of his earnings which enabled him to lead a great lifestyle until he died in 1995.
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 seldom drank 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 his daughter Jessica Cornfeld. Bernard Cornfeld suffered a stroke and died of MRSA on 27 February 1995 in London, England.
