Mutual Funds: Gramco: The Second Domino

Only three months ago, Bernard Cornfeld's beleaguered I.O.S., Ltd., the biggest of the foreign mutual fund empires, teetered on the brink of collapse. Last week financial misfortune struck the second largest offshore investment complex, Gramco Management Ltd. and its USIF,* Real Estate. Swamped by the equivalent of a run on the bank, the directors of the Nassau-based USIF "temporarily" suspended sales and redemptions, thus freezing the assets of 23,000 European, Latin American and Asian investors who had put up $276 million. The closedown leaves the future of the fund in considerable...