MyCFO: the Backstory

Who named the Harris multi-family office? we asked last fall. Turns out Bank of Montreal, Harris Bank's parent, paid handsomely for the name myCFO. After today's report in The Wall Street Journal, it may feel it was overcharged.

The original myCFO, conceived as a wealth management operation, was the idea of James H. Clark, co-founder of Netscape. Financial backing came from John Doerr, “dean of Silicon Valley venture capitalists” and others.

Wealth management seems to have been a hard sell. But tax shelters were a hot commodity among Silicon Valley's new rich:

MyCFO's main tax shelter, sold to 17 clients, was called Cards, for Custom Adjustable Rate Debt Structure. Each involved an ostensible 30-year bank loan to a foreign party for $50 million to $100 million. MyCFO's client then assumed the loan and, after some complex swapping of collateral, claimed a loss for tax purposes of nearly the full amount of the loan. Others besides myCFO also marketed Cards.

The IRS in March 2002 ruled Cards invalid. Largely as a result, myCFO sold its name and client list and liquidated its tax business.

Reportedly, Bank of Montreal paid $30 million for the myCFO name, list of clients and certain other assets.