Losing Clients Money

[AW69 10]

Here is the story- My friend (knob) in India meets a trader in the U.K and after many days of chit-chat builds a informal trust about his capabilities in trading forex and agrees to transfer £40k to the trader in U.K. in a hope that he will get a decent return every month.

 

It all went fine for few months untill my friend recieves a call from the trader in U.K, explaining how he lost all his money in last few days.

 

Well, as the situation sounds very stupid and naive because there was no legal documents signed neither the U.K based trader is technically managing his money, so is there any way around for him to sue the trader from India?

 

I know this is something my friend should be taking to lawyers in India. But as he has asked me for help, so has anyone ever come across any thing similar?

 

I will appreciate your time in replying.

[SIUYA 11]

Honestly - while I dont know much about it.

whats he going to sue him for? He gave the guy money to trade, the guy lost it.

 

Unless the guy has caused fraud, or misrepresnted himself, how did he know he lost it in Fx.

 

Also did the UK trader say he was licensed. the FSA might have some sort of recourse.

Otherwise your friend in India should have done some due diligence.

[Kiwi 16]

If it was just greed leading to an agreement without sufficient verification then there is likely to be no remedy.

 

If the guy is now defrauding him then he has a chance. He needs to request proof of the losses - the complete set of account statements for the period where the loss occurred. Be aware though that a sophisticated scammer could produce legitimate statements showing the losses if he traded two accounts and took a win on the second one whenever he took a loss on the first - hard to do though.

 

If the losses were not there then its time to visit the law.

[AW69 10]

Thank you guys for the reply.

 

Well, we managed get a hard look into his account details and unfortunately he is not leing but my friend insists on saying that trader never mentioned about the overall risk and the risk- management was explained in a different procedure.

 

However, he accepts that he should have never sent the money through remittence but instead let the trader trade his account with POA. Then he might have some control on losses.

But because the money was transffered through remittence, can it not be classed as loan with a verbal aggreement? If yes, cant he make a claim providing necessary proof of ownership of the money.

If yes, how difficult will be to make a legal claim from abroad.

 

Cheers!

[larrylevy 10]

Yes. This is an all too common story all over the world now, not just in the UK. It may have been illegal for the person concerned to solicit these funds, and a call to the United Kingdom Financial Services Authority Financial Services Authority helpline may be in order. Serious cases of multiple ripoff schemes have been referred to the SFO (UK Serious Fraud Office). It is important to follow up, as you may be preventing other users suffering the same fate.

 

For example

 

Mallorca expats hit by £20m ‘fraudster’ - Times Online

 

Most serious of all is people not being warned about overgearing accounts, and ridiculous gearing like 500:1. Trading on this kind of margin is the financial equivalent of driving a car with dicky stearing along a curved and variable cliff edge at high speed. The reduction of maximum gearing in US forex accounts down to 50:1 is a very sensible move. Unless you really know what you are doing, high gearing is crazy. Just suicidal.

 

Of course in this case the so called trader may just have pocketed the money.

 

Larry Levy

TraderSpeak.com

[Jumbo123 10]

This message will sound offensive, but I really don't care. Your friend is terribly careless and dumb.

1. You never give someone money without doing serious due diligence.

2. It also makes absolutely no sense to hire a financial professional in a different country to manage his money.

3. He obviously has no idea the risk level about trading. When you give money for someone to trade, you need to mentally prepare to lose it all.

 

It's even funnier for you to try to help him and treat him as a victim. This is his tuition fee to learn not to be stupid in life. With all your efforts to help and your sympathy, he must feel that it's that bad trader's fault. To me, the enabler is the one should be blamed and face his own responsibility. Suing?! You give the guy license to kill...he didn't kill it in the market...but he killed your client's money. That's that. If the trader did make 100% a year, can the trader sue your client to take over the winning? Of course not. It's a fair game.

[AW69 10]

This message will sound offensive, but I really don't care. Your friend is terribly careless and dumb.

1. You never give someone money without doing serious due diligence.

2. It also makes absolutely no sense to hire a financial professional in a different country to manage his money.

3. He obviously has no idea the risk level about trading. When you give money for someone to trade, you need to mentally prepare to lose it all.

 

It's even funnier for you to try to help him and treat him as a victim. This is his tuition fee to learn not to be stupid in life. With all your efforts to help and your sympathy, he must feel that it's that bad trader's fault. To me, the enabler is the one should be blamed and face his own responsibility. Suing?! You give the guy license to kill...he didn't kill it in the market...but he killed your client's money. That's that. If the trader did make 100% a year, can the trader sue your client to take over the winning? Of course not. It's a fair game.

 

Agreed Jumbo123!!

Lesson is definitely learnt but if there is any legal way to sue someone then why not.. ?After all its all fair... Giving up is obviously the last resort anyways.

Cheers and happy trading.

[peterjerome 10]

here's a reality check:

your friend must consider his lost money as 'tuition' at a very expensive school...the university of "hard knocks". hopefully he learned a very valuable lesson and will eventually benefit from his new 'degree'. if he continues to fault someone else for the loss, no lesson is learned.

 

years ago 'stockbrokers' charged $200 - $500 fees to place stock orders. i assumed they knew more about picking the right stocks than i knew. i got involved with a broker and slowly watched my $165K account churn down to nothing. i still have the check from cowen & company dated jan. 8, 1997. it is drawn on the chemical bank of new york..."pay to the order of peter... One Dollar. it is a constant reminder to me that the only person that 'really' cares about my money is me. i began learning everything i could about stock trading. i'm 70 now and for the last 6 years i've been able to make a good living trading equities...averaging around 60%.

good fortune to you and your friend.

peter.

[AW69 10]

here's a reality check:

your friend must consider his lost money as 'tuition' at a very expensive school...the university of "hard knocks". hopefully he learned a very valuable lesson and will eventually benefit from his new 'degree'. if he continues to fault someone else for the loss, no lesson is learned.

years ago 'stockbrokers' charged $200 - $500 fees to place stock orders. i assumed they knew more about picking the right stocks than i knew. i got involved with a broker and slowly watched my $165K account churn down to nothing. i still have the check from cowen & company dated jan. 8, 1997. it is drawn on the chemical bank of new york..."pay to the order of peter... One Dollar. it is a constant reminder to me that the only person that 'really' cares about my money is me. i began learning everything i could about stock trading. i'm 70 now and for the last 6 years i've been able to make a good living trading equities...averaging around 60%.

good fortune to you and your friend.

peter.

 

Thank you guys.

I think he can only sue him based on the verbal agreement which is also legally binding.. Although proving it to the court would be a different ball game. Hope the e-mail & telephone communications which was recorded may help his case.

 

Anyway how many here thinks he shouldn't be thinking of suing him and why?

 

Happy Trading to all.

[Isologic 10]

What was the name of this ...so called trader? It sounds very similar to another episode i heard about just over 12 months ago. Name or alias and rough location would be helpful. If it ties up in any way...I may have some valuable information.

[robertm 10]

This scam is popping up more and more now. I've been solicited a few times by "FX Guns" showing off their trading results hoping to impress you and get your money either to teach you their magic, or invest in them. Some of those solicitations came from this forum, they take any lead or detail they can get and forums are easy pickings.

 

The ploy is simple - open two accounts, take the other side of your trade. If you wipe out all you did was transfer wealth. Avoid tax while doing this of course.

 

Next you build a winning streak from a clean account (if it blows up you start again). When you have the streak, you hit your database you skimmed from online forums looking for the big fish.

 

Next you simply use 2 accounts to transfer the wealth. Run 2 sets of books, one set of investors loses 100%, another makes 100%, they take their cut (or keep it all).

 

It's a no lose game for them, and why retail FX is the wild west of trading and getting banned/restricted in some countries because of this.

 

Your friend is in good company though. Rob Booker tells in an interview how one of his early FX mentors he looked too was actually a big Ponzi scheme, and an "FX Superstar" that Kathy & Boris interviewed in one of their books (might have been the same I forget) also turned out to be a scam. If they can't pick them, what hope do the uneducated public have?

 

In a market with no exchanges paper trails are hard to follow.