Investors Overseas Services, Ltd. (IOS) was founded in 1955 by financier Bernard Cornfeld. The company was incorporated outside the United States with funds in

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

and headquartered in

Geneva Geneva ( , ; ) ; ; . is the List of cities in Switzerland, second-most populous city in Switzerland and the most populous in French-speaking Romandy. Situated in the southwest of the country, where the Rhône exits Lake Geneva, it is the ca ...

Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland ...

. In the 1960s, the company employed 25,000 people who sold 18 different

mutual funds A mutual fund is an investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in Europe ('investmen ...

door-to-door all over Europe, operating mostly in

Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...

with small investors. The company mainly targeted American

expatriates An expatriate (often shortened to expat) is a person who resides outside their native country. The term often refers to a professional, skilled worker, or student from an affluent country. However, it may also refer to retirees, artists and ...

and U.S. servicemen who sought to avoid paying income tax. The mutual fund offerings by the company were called “people’s capitalism” by founder Cornfeld. In the following decade, the company raised $2.5 billion, due in part to its “Fund of Funds”, which meant investment in shares of other IOS offerings. The offering was very popular in the

bull market A market trend is a perceived tendency of the financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time ...

times, but then the market dropped. IOS was forced into an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...

to meet its costs. The next

bear market A market trend is a perceived tendency of the financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time ...

made many investors cash their funds as stock value decreased. 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. Financier Robert Vesco who, at the time, was also in financial trouble, turned to Cornfeld and offered his help.Obituary: Robert Vesco; Fugitive American financier responsible for one of the biggest frauds in history ''The Guardian'' May 20, 2008 Vesco proceeded to use $500 million worth of IOS money to cover his own investments in his International Controls Corporation. When he was discovered, Vesco fled to Costa Rica. IOS then collapsed and in the process ruined a number of US and European banks.

References

Further reading