Bernard Cornfeld

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Bernard Cornfeld
Born(1927-08-17)August 17, 1927
DiedFebruary 27, 1995(1995-02-27) (aged 67)
London, UK
Other namesBernie
OccupationFinancier, businessman
Net worthUS$100 million (pre-1970)
Spouse(s)Lorraine Armbruster
ChildrenJessica Cornfeld

Bernard "Bernie" Cornfeld (17 August 1927 – 27 February 1995) was a prominent businessman and international financier who sold investments in US mutual funds, and who was tried and acquitted for mismanagement of IOS.

Early life[edit]

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. 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 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.[1]

During the Second World War he joined the U.S. Maritime Service. Afterwards he went to Brooklyn College, graduating with a degree in psychology, and then did an MA in social work at the School of Social Work at Columbia University. He initially worked as a social worker, but then switched to selling mutual funds for an investment house. In 1955, he left New York 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 (IOS). By selling the mutual funds, mostly to American servicemen in Europe, Cornfeld was able to avoid both American and European tax regulations.

As a US citizen he did not avoid US taxes, and the funds sold to US servicemen were US registered and based funds. In the early years the fund sold was mostly the Dreyfus Fund, which was small then, with assets of less than US$2 million.[citation needed] He had a close and friendly relationship with Jack Dreyfus, the founder, and when the management company of the Dreyfus Fund went public, IOS bought an almost 10% ownership in it. Cornfield and IOS fueled the early growth of the Dreyfus Fund from very small to several hundred million dollars.[citation needed]

Investors Overseas Services[edit]

In the 1960s, Cornfeld formed his own mutual fund sales company, Investors Overseas Services (IOS), 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.

In 1962, IOS launched its "Fund of Funds," which meant investment in shares of other mutual funds, including some other IOS vehicles. The offering was 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. During the next ten years, IOS raised in excess of US$2.5 billion, bringing Cornfeld a personal fortune which has been estimated as more than US$100 million. Cornfeld himself became known for flamboyance and lavish parties. Socially, he was generous and jovial, and generally surrounded by a bevy of beautiful young women, including for example Victoria Principal, later widely known as a star in the TV series Dallas.[citation needed]

At its peak, IOS employed around 25,000 salesmen, who sold a series of mutual funds door-to-door all over Europe, especially in Germany, to small investors. He originally targeted US expatriates and servicemen who had no access to US investing, but the main growth of the business came from the public in countries such as Germany and Italy, who had until then had no other easy access to investment vehicles of this kind. Cornfeld called it "people's capitalism."

There were several reasons for the eventual rapid downfall of IOS, and there is no widely accepted agreement as to the cause. But it may be true to say that, had the parent company not made a public share offering in 1969, it might have survived for much longer. The pressure to make the public offering came from the salesmen-stockholders, who were eager to cash in their paper fortunes, but the money raised by the company was used by the management to diversify in a number of ways that created a cash shortage. The domicile (but not the offices) of IOS was switched to Canada, and the public offering took place there in the summer of 1969.

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. That is the way the IOS Investment Program was structured. Unfortunately no other provision was made for operating funds and international stock markets suffered a bear market in late 1969. The value of the IOS mutual funds took a serious fall, eliminating income for IOS. By March 1969, IOS was running out of operating money.

At this point, a little-known American financier named Robert Vesco, head of the failing mini-conglomerate International Controls Corporation, offered his help with $5 million, funds which had conceiveably originated as part of a larger loan from IOS to ICC. Vesco managed to take control of IOS, including the unregulated mutual funds, insurance assets, and real estate equity, after eventually evicting Cornfeld from the management. Having placed his men in key positions within IOS, Vesco ultimately succeeded in transferring over $200 million of cash belonging to the IOS funds, etc. into layered shell corporations domiciled in far-flung areas, and designed to hide the assets from international law enforcement authorities, and make the money available exclusively to Vesco and his allies.

When the SEC issued a public complaint, Vesco fled to exile in a number of Caribbean hideaways, and was reported as having died in Cuba in 2008.

Following the SEC complaint, the Canadian authorities arranged for the IOS entities to be placed in liquidation.

Personal life[edit]

Cornfeld owned a 12th-century chateau in France, Empress Josephine's summer house on Lake Geneva, a townhouse at 1 West Halkin Street in Belgravia, London, and the Grayhall mansion located at 1100 Carolyn Way in Beverly Hills, California, as well as a permanent suite in a New York City 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 several girls at a time." He had romances with Victoria Principal;; Alana Hamilton (née Collins — a model and former spouse of George Hamilton who subsequently married Rod Stewart); Audrey Hepburn, and Princess Ira von Fürstenberg.

Diane Halfin, later Diane von Furstenberg, worked as a receptionist at IOS in the early days.

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.[2] Bernie numbered among his friends Elizabeth Taylor, Michelle Phillips, Warren Beatty, Laurence Harvey, Victor Lownes, Richard Harris, Al Capp, Tony Curtis, Howard Sackler, John Heyman, and Simon Reuben. Grayhall mansion doubled as the home of rock star John Norman Howard (Kris Kristofferson) in the 1976 version of A Star Is Born starring Barbra Streisand.

Cornfeld's decline[edit]

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 among employees in 1969. Consequently, he was charged with fraud in 1973 by the Swiss authorities. When Cornfeld visited Geneva, Swiss authorities arrested him. He served 11 months in a Swiss jail before being freed on a bail surety of US$600,000. Cornfeld always maintained his innocence. His trial did not take place until 1979 and lasted three weeks, with Judge Pierre Fournier finally acquitting Cornfeld. Bernie's former employees testified that they wanted to come back to work for him again as he had been very generous with them and had given them lots of parties, and hope for a prosperous future. The Prosecutor said he could not in good conscience ask for a guilty verdict.

Realizing that his "good time" friends had 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 former Christian Dior cosmetics model and cover girl Lorraine Dillon Armbruster at his Beverly Hills mansion Grayhall. However, he had difficulty settling down. Polygamy was "more in keeping with the nature of man than monogamy and a lot more fun," he insisted.

Final years[edit]

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 a daughter Jessica Cornfeld.

Bernard Cornfeld suffered a stroke and died of MRSA on February 27, 1995 in London, England.


  1. ^ Henriques, Diana B. "Bernard Cornfeld, 67, Dies; Led Flamboyant Mutual Fund", The New York Times, March 2, 1995. Accessed September 22, 2009. "He graduated from Abraham Lincoln High School in Brooklyn and Brooklyn College."
  2. ^ Marc Wanamaker, Early Beverly Hills, Arcadia Publishing, 2005, p. 42 [1]


  • The Bernie Cornfeld Story by Bert Cantor, (Lyle Stuart, Inc., 1970). ISBN 0-8184-0013-7
  • With title quoting Cornfeld's celebrated pitch – Do You Sincerely Want To Be Rich? by Charles Raw with Godfrey Hodgson and Bruce Page (Originally published André Deutsch, 1971, ISBN 0-233-96328-6; reprinted by the "Library of Larceny", 2005, ISBN 0-7679-2006-6 )

External links[edit]