Question Regards Forex Trading

EddRobinson7

Hi guys - can anyone please help me out with the ‘legalities’ around the following scenario:

I have a friend who is setup as a client/customer of a fully registered Forex trader (UK). Are there any legal implications if I were to send my friend money, for him to put in to his trading account and have his trader trade with it? 

Then additionally, when I want to draw money, is there anything I need to be aware of other than the tax implications if either:

a. My friend draws my desired sum of
money from his trading account in to his own bank and sends it to me via bank transfer?

or

b The trader sends it directly to my bank?

Thanks in advance for any help/info guys. Completely in the dark here.

HappyHarry

Once you send the money to your friend, it is legally theirs. If they, or their forex trader do not return the money, you may face a battle to get it back. 

Your friend is the one making the gains / losses and so will be liable for any tax. You would need to come to an agreement with them about who might pay that tax. Depending on their situation, the tax liability may be higher than it would be if you made the same trades in your name.

The trader will not send money from your friend's trading account to your bank account. Their money laundering rules will not allow this.

One wonders why you would not simply set up a trading account with the broker in your own name?

eskbanker

Has your friend given you the impression that he's making a roaring success of this, that it's easy money, and that you'd be mad not to chip in for a piece of the action?  If so, what actual evidence do you have of his claims and in particular, that he's been able to liquidate his holdings on demand?

EddRobinson7

Hi both - thank you for taking the time to reply, it's greatly appreciated.

As a bit of background: there is a trader in my local area that has been doing exponentially well for the past 6+ months. I know of around 15 different people in my locality (several who are friends that have corroborated his success by showing me their balance/withdrawals via the bespoke app that the trader had made specifically for his clients) who managed to get an account with him before he "took off" and have profited massively from his trading gains. A couple of which have since been out and bought brand news cars in excess of thousands. 

The trader has a ridiculous 'waiting list' of people who want to get signed-up with him - I'm talking hundreds and hundreds - myself being one of them. I have however recently acquired the unique opportunity of getting involved via one of the friends I mentioned above who has been a client/customer from the start, rather than wait what is likely to be months and months via the waiting list.

What I'm after some definite on, having admittedly zero knowledge in this area, is what considerations/implications there may or may not be involved by giving my friend some money (via a bank transfer to his bank) to then wire over in to his investment account and the trader then do his thing with it (merged in to my friends existing sum)?

Then thinking after the fact, any profits that I would then want to withdraw - the logistics of that would be via my friend requesting the withdrawal from the trader > to his bank > then to mine?

PS - Thank you again for the clarity on whether or not the broker could send it directly to me in previous posts, that's given me confirmation on that avenue, cheers.

EddRobinson7

Correction: In my last sentence I meant *trader sorry, not broker.

ColdIron

A fool and his money ...

HappyHarry

EddRobinson7 said:

Hi both - thank you for taking the time to reply, it's greatly appreciated.

As a bit of background: there is a trader in my local area that has been doing exponentially well for the past 6+ months. I know of around 15 different people in my locality (several who are friends that have corroborated his success by showing me their balance/withdrawals via the bespoke app that the trader had made specifically for his clients) who managed to get an account with him before he "took off" and have profited massively from his trading gains. A couple of which have since been out and bought brand news cars in excess of thousands. 

The trader has a ridiculous 'waiting list' of people who want to get signed-up with him - I'm talking hundreds and hundreds - myself being one of them. I have however recently acquired the unique opportunity of getting involved via one of the friends I mentioned above who has been a client/customer from the start, rather than wait what is likely to be months and months via the waiting list.

What I'm after some definite on, having admittedly zero knowledge in this area, is what considerations/implications there may or may not be involved by giving my friend some money (via a bank transfer to his bank) to then wire over in to his investment account and the trader then do his thing with it (merged in to my friends existing sum)?

Then thinking after the fact, any profits that I would then want to withdraw - the logistics of that would be via my friend requesting the withdrawal from the trader > to his bank > then to mine?

PS - Thank you again for the clarity on whether or not the broker could send it directly to me in previous posts, that's given me confirmation on that avenue, cheers.

I am sorry, but this does sound like a load of rubbish, made up to part you with your money. 

This is typical of many scams, i.e. show you how well (made up) people are doing, making it an offer limited to a small number of people, giving you the opportunity to queue jump (due to a "friend", because they like your shoes, your car, you're the kind of person they want to deal with, make-up-your-own-reason), and then give you limited or no access to your money as your "friend" has to do the trading in their name.

I don't think you need to worry about the tax situation, you are simply going to lose all your money. There will be no profit that you ever actually see going into your bank account.

jimjames

EddRobinson7 said:

Then thinking after the fact, any profits that I would then want to withdraw - the logistics of that would be via my friend requesting the withdrawal from the trader > to his bank > then to mine?

What happens if there is no profit and you lose all your money? It doesn't appear that you've considered that option. Even if this person has been successful that doesn't mean it will always continue. That assumes the info you've been shown is valid and not a scam. If it is a scam then losing money is more like a certainty

EddRobinson7

Usually I'd agree with you, especially if this was something I'd come across on a YouTube video for example. People I am referring to are people I have known locally for years who are regular Joe's like me, one of which I work with day to day, for years, who initially told me what he had joined a while ago, and then has shown me his withdrawals in to his bank, and furthermore the purchase of his new car at 18 thousand pound. I was particular in being shown the proof of whats going on rather than blindly going in there with pound signs in my eyes.

The trader himself lives just 5 minutes away from my house with a brand new McLaren parked outside of it, all made from his investments this year - something that several people who I went to school with who are friends with him told me about so I drove past to see it for myself - so again it's not just some name on the web who lives in Africa - he is well known locally so has zero anonimity.

The trader doesn't know me from Adam, nor have I had any contact with him directly before/after asking for an account and be put on a waiting list back in April. Be odd behaviour for a conman to sit me on a list for 3 months now rather than capitalist on my keenness and just say within a day of me asking "oh we've just had an opening, how much you got to invest" - so I just need to assure you that I wouldn't put myself out on this forum to be shot to pieces like in your previous post if I hadn't had multiple testimonies, from tangible people/sources that I know personally and have for years to corroborate that the guy is legit.

It's sad that I feel I needed to give you that context so I can get the actual help/advice that I have requested instead of being ridiculed.

EddRobinson7

In reply to jimjames: there's been a crossover with your post, and my response to the prior post - so I thank you for the constructive response you have given. I completely acknowledge that I may lose money, absolutely, which is a risk I am willing to take having decided on a figure I am "OK to lose" should that be the outcome, as with any risk involved in trading. This is more about me just getting the facts around what I've asked about doing so I don't break any laws, should there be any to break in the scenario I have queried

HappyHarry

Sorry if you feel you are being ridiculed, that was not my intention. 

However, you are being scammed. You may not see it now, but it is happening. 

My comments are put there in an attempt to stop you losing money. As a fellow forum member, I have nothing but your interest at the core of my comments.

I wish you the best with your endeavours, but I also hope you do a lot more due diligence before handing over any money.