Western Europe: Empire at Bernie-Voltaire

Not since Voltaire came to town in 1758 to escape persecution in Geneva has the French border village of Ferney—subsequently renamed Ferney-Voltaire—seen so much excitement. The current fuss is being caused by another refugee from Geneva, controversial Bernard Cornfeld, 40, an American expatriate who has built his eleven-year-old Investors Overseas Services into the largest mutual-fund sales organization outside the U.S. When Bernie Cornfeld decided to move his Swiss-based I.O.S. across the border eight months ago, wags mindful of the 18th century precedent started referring to the town as "Bernie-Voltaire."

The financier may merit the honor even more than the philosopher. With Cornfeld putting up an office building and a host of new apartments to house his employees, the population of economically depressed Ferney-Voltaire has almost doubled, rising to 5,000; the town will be further enlivened by a nightclub that the flamboyant newcomer plans to establish. For the dedication of Cornfeld's new headquarters, clergymen and mayors of no fewer than 14 mountain villages were on hand. Proclaimed Ferney-Voltaire Mayor Roland Ruet: "I assure you that you are more than welcome here."

Nest Eggs & Mattresses. For Cornfeld, that kind of sentiment has been conspicuously rare in recent months; he has made money far faster than friends. An Istanbul-born, Brooklyn-reared onetime social worker, he hit on the idea of selling mutual-fund shares to overseas G.I.s in the 1950s, soon started selling door to door to Europeans. Another successful item that he started peddling in 1962 was the Fund of Funds, consisting of shares of other mutual funds. Paying few taxes, Cornfeld's Panama-chartered I.O.S. employs 10,000 salesmen in over 100 countries, has expanded into a $250 million-a-year empire controlling 88 other enterprises in everything from banking to real estate.

As Cornfeld's success mounted, so did protests. In the U.S., the Securities and Exchange Commission got after him last year on the grounds that his activities violated American law. He finally settled with the SEC by agreeing to stop selling Fund of Funds shares to Americans, limit holdings in U.S. funds, and sell off Investors Planning Corp., a mutual-fund sales firm that I.O.S. purchased in 1965 for $2,000,000. Cornfeld claims to be happy the way things turned out. American clients account for only 3% of l.O.S.'s business anyway—and Cornfeld figures to unload Investors Planning at an $8,000,000 profit.