Keith Barish’s reputation as a financial wunderkind came to a toxic head with Gramco, the offshore holding company he chaired that went public in May 1969 with one million $10 shares. Gramco was structured through a Panamanian parent (GRAMCO International S.A.) and a Bahamian trust that sold shares only to non‑U.S. customers — a deliberate architecture designed to dodge SEC oversight. Barish hired a coterie of Kennedy alumni (including Pierre Salinger) and tapped Cuban exile Rafael G. Navarro to run mutual fund sales, burnishing the company’s image even while Gramco’s sales literature promoted vaguely philanthropic rhetoric about “prevent[ing] economic injustice.” Behind that gloss, Gramco’s fee structure was extraordinary: between 17% and 18% of investors’ money was siphoned off to management and affiliates, and the company engaged in practices that critics argued would have been illegal had they been conducted onshore. After a meteoric rise — net assets swelled to $278 million and shares climbed toward $38 — confidence evaporated amid a West Germany sales ban and an accelerating cash drain. In a stunning reversal, shares collapsed to $1.50 and, on October 8, 1970, Gramco froze redemptions and sales, effectively immobilizing the accounts of some 23,000 shareholders who held on average roughly $12,000 each. Even while investor funds remained locked, Gramco continued to collect management fees. Management shifted Gramco’s portfolio to Arlen Realty in May 1972; a $40 million class action followed in 1973 but was dismissed in 1975 for lack of subject matter jurisdiction. Later that year Arlen absorbed the fund and reopened trading — at a tiny fraction of the original price. The episode left a permanent stain on Barish’s résumé: contemporaries recalled his 1970 boast to Der Spiegel (“more likely for a giant to lift the Empire State Building...”), and by 1971 press reports linked him to an ostentatious move to 740 Park Avenue, a public image at odds with the thousands of small investors who had watched their capital vanish.
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