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Old 05-01-2019, 04:50 PM
 
Location: Riding a rock floating through space
1,857 posts, read 546,663 times
Reputation: 4706

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If you have nothing in writing, and it doesn't sound like you do, I fail to see anything that can be done. A fool and his money are soon parted, sorry to say.
The quickest way for a trusted friend to turn into an avoided acquaintance with me is to ask me to go in on some investment idea he has. He can tell me all about it and I'll decide if I want to do it by myself, that or forget it.
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Old 05-01-2019, 04:55 PM
 
Location: Wartrace,TN
5,548 posts, read 8,885,378 times
Reputation: 11055
I'm skeptical that he was actually trading an account; it sounds as if he was just scamming people. At MOST 10% of a portfolio should be in highly speculative investments when you are in retirement.

The safest way to do something like this is to have your OWN ACCOUNT and have the "genius" connect their trading system to your account api and trade.

Why do I think the guy is a scammer (other than the other evidence)? There is no need for a huge amounts of capital in order to trade. The 6E futures contract requires 2200 dollars to control 125,000 Eruo's. If this guy could trade he would have no problem scaling up over time to trading 10+ contracts and making good money doing it. Why did he need "investors"?

Your parents will never recover their money. The guy is probably judgement proof and even if he isn't I would suspect he is highly leveraged and is not going to satisfy any judgement in the few short years he has left.
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Old 05-01-2019, 05:17 PM
 
Location: Dunwoody,GA
1,992 posts, read 4,759,657 times
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Thanks for the advice. They've spoken with one attorney already, but I think they are intending to send a demand letter (certified mail with return receipt requested plus also regular mail). My DH is an attorney (although this isn't his field) and he knows they'd be asked for a $5K retainer up front by a civil RICO attorney (which they wouldn't get back) and probably won't recover anything.

I honestly have no idea what my parents will do. They have a little money left, but not much. They've already moved from the house I grew up in to a much smaller townhouse that they are renting. I wish we could help them, but we just don't have the disposable income to do so.

I'm sad for my Dad but also angry at him to some degree. My mom knew he was doing this (but hated the idea), but neither of them told me, my sister, or our husbands. If we had known going in that this was the plan, we would have STRONGLY advised against it. But I didn't know a thing about it until over the weekend. Too little, too late.
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Old 05-01-2019, 05:32 PM
 
793 posts, read 210,796 times
Reputation: 1322
Quote:
Originally Posted by CMMom View Post
I'll make this very brief. My parents disclosed to me over the weekend that my father had done some "investing" with an old fraternity buddy. I don't fully understand it, but he gave money for the guy to do currency trading with (trading dollars for Euros and back). The guy gave him progress reports and even K-1's for 2018. For whatever reason, my Dad never asked for itemized accounting. He got suspicious last week and asked for his money back. The guy gave the old "I'll pay you Tuesday" excuse and then on Tuesday said he needed until Friday.

Now the guy has gone radio silent. My dad has been calling, texting, and even going by the guy's house and ringing the bell (his car is there, but no one comes to the door). This is the majority of my parents' retirement money and if it's gone, they are well and truly screwed.

Best advice on how to handle? They've already emailed/texted him "If you don't pay back X amount by Wednesday, we're calling the police." It's now Wednesday and still nothing.

The guy is an unlikely flight risk as he is 70+, owns a home, and has a wife. I don't see him picking up and fleeing to the Caribbean. But how to proceed next?

And, yes, I know my Dad was naive and foolish. He didn't ask the right questions and chose to trust his old buddy. His mistake. But dwelling on that won't help. They need best next steps. We cannot afford to support them financially as we have our own issues to deal with.
Is this guy a broker? If so, your Dad can file a complaint with FINRA.

https://www.finra.org/investors/problem
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Old 05-01-2019, 05:41 PM
 
Location: Dunwoody,GA
1,992 posts, read 4,759,657 times
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Quote:
Originally Posted by DKM View Post
They need a good attorney. Don't follow one bad move by another... stop trying to contact him and leave the police out of it. If you don't get an attorney, then you're screwed. Majority of retirement money? That can mean a couple hundred K or even a million (or more!). They were dumb to invest this on their own without an advisor. My guess is they didn't want to pay one, don't pay for a CPA and probably won't pay for an attorney. I hope you learn from their mistakes.
This would be a 6-figure loss. A very bad situation for 77-year olds. They do have a financial advisor; what they have or haven't talked with him about, I have no idea.
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Old 05-01-2019, 06:09 PM
 
2,076 posts, read 703,003 times
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Quote:
Originally Posted by CMMom View Post
This would be a 6-figure loss. A very bad situation for 77-year olds. They do have a financial advisor; what they have or haven't talked with him about, I have no idea.
I'd think the financial advisor would have noticed when your Dad took money out of other assets to "invest" with his friend- but maybe the advisor told him it was a bad idea and Dad went ahead anyway. I'm sorry to hear this happened to your parents and I hope every shred of that currency trader's assets get confiscated.
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Old 05-01-2019, 06:12 PM
 
1,228 posts, read 899,495 times
Reputation: 2510
If it’s wednesday and you said you’d call the police, you call the police. Your dad probably isn’t their first victim but since nobody ever calls the cops, he won’t be the last either. Their financial advisor should have known they were withdrawing large parts of their retirement.
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Old 05-01-2019, 06:33 PM
 
Location: Wartrace,TN
5,548 posts, read 8,885,378 times
Reputation: 11055
Quote:
Originally Posted by Lbjen View Post
If itís wednesday and you said youíd call the police, you call the police. Your dad probably isnít their first victim but since nobody ever calls the cops, he wonít be the last either. Their financial advisor should have known they were withdrawing large parts of their retirement.
This is a civil matter; the police are called when there is danger to the public. The money is gone.
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Old 05-01-2019, 07:08 PM
 
Location: Riding a rock floating through space
1,857 posts, read 546,663 times
Reputation: 4706
Quote:
Originally Posted by Wartrace View Post
This is a civil matter; the police are called when there is danger to the public. The money is gone.
I have no idea why the op is even bringing up the cops, she sounds as clueless as her father regarding financial matters. Sorry if that sounds cold.
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Old 05-01-2019, 07:53 PM
 
Location: Dunwoody,GA
1,992 posts, read 4,759,657 times
Reputation: 2241
Quote:
Originally Posted by duke944 View Post
I have no idea why the op is even bringing up the cops, she sounds as clueless as her father regarding financial matters. Sorry if that sounds cold.
Yes, it does. Thanks for that. Your empathy for someone in a really bad situation is overwhelming. Now, go enjoy kicking some puppies while you're at it.
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