It's amazing to me the actual lengths people will go to in order to avoid hard work.
Is this trading strategy illegal or against some brokers policy?
- Thread starter tysonmoch123
- Start date
dude, one thing to ask is whether you get away with what you are doing. An entirely other thing is to pretend you are stupid (or worse, pretend the rest of your readers are stupid) and pretend you are not trying to rip off (aka defrauding) your broker.
ever heard of shortcuts? Some end you in prison, others go undetected, but most of them go an unethical route, one way or another. It all comes down to what is acceptable to each individual. OP apparently does not see any problems with his actions. Let him continue, as said earlier, it should get very entertaining down the road.
For sure. Europe too.
OP: here is what you are doing and why its illegal. You have $15k which you own. You give $7.5k to John to open a trading account in his name with your money. That is money laundering.
Then John represents to the broker that the is the beneficial owner of the account - which isn't true and means John has committed a money laundering offence. And because he has made the misrepresentation in order to realise a gain (or cause loss to another) it is also fraud.
You control account A in your name and account B in John's name each with $7.5k.
You then buy 1 million of EUR/USD in account A and you sell 1 million of EUR/USD in account B.
Your position is flat and you've paid 2 lots of spread.
Over the weekend, EUR/USD rises 1%.
Account A is now worth $17.5k and account B is worth -$2.5k.
Your combined accounts are worth $15k. No gain or loss because you are flat.
Except because you are pretending to be two people, your combined accounts are actually worth $17.5k because the notional negative balance is written off as part of a gentleman's agreement not to enforce a negative balance. But if the broker knew that accounts A and B shared the same beneficial owner they would net off the debit in B with the positive balance in A leaving no negative balance and $15k overall. (less total spread paid + slippage)
Therefore the $2.5k over and above the initial $15k which you put in does not exist "but for" the fraud you perpetrated on the broker by concealing the fact that accounts A and B have the same beneficial owner.
volpunter: I'm not going to lose time looking up statutes - it will vary by country, but the above conduct will support a charge of fraud and money laundering in any G8 country. I did a degree in law (though I've never practiced) and garachen knows what he is talking about.
Was this related to my post? I was talking about something else, not fraud, in Europe - probably doesn't exist any more and too small to bother with if it does.
Last edited:
A lot of incorrect information:
a) Giving 7.5k to someone else is not money laundering. Bollocks!!! What they do with the money they received as gift is up to them. If anything the recipient of the gift may have to declare taxes on those. But guaranteed it is not money laundering. By the way, let me school you on some facts: No broker in the world will ask you where the money is from that you intend to fund your account with. Why? Because it is not required by law and hence is irrelevant. What is very relevant, however, is that your bank asks you where the money is from when you receive certain sums in your bank account. Why? Because they are required by law to do so. So, you receiving money from someone is not money laundering. Nor is it if you deposit the received money in your bank account. And it is also not money laundering when you turn around and transfer the deposited money from your bank account to your brokerage account.
b) You just said John opened an account in his name. So he is the beneficial owner of the account. He can do with any of the proceeds as pleases him. If he returns money to you as a gift then you may have to declare certain taxes. But again its not money laundering.
c) By the way you can open both accounts with different brokers in your own name. Nothing speaks against that and because you are not acting illegally by shorting in one account and longing in another account you do not commit any fraud or criminal act whatsoever, no John involved.
d) Here is where you are being stupid: Even if you opened two accounts in your name with different brokers, with the EUR/USD example you are long 17.5k and flat in the account (given as OP laid it out, that you are forgiven negative account balances). So, you are in no way flat but up 2.5k. This whole story has NOTHING whatsoever to do with whether you involve another individual or do it all on your own. You are missing the point completely.
Your claim of charges is utter bullshit. Sorry mate, but you already messed up the whole story, there is no wire fraud nor money laundering going on at all. Again, you do not need to involve any John, and even if you involved another individual...in Germany, for example, you can give 1 billion Euros to whoever pleases you as long as applicable taxes are paid (inheritance or gift giving, or what have you). I am almost sure the same applies in the US, Japan, France, or any other country as well. Your law degree utterly fails you here...
a) Giving 7.5k to someone else is not money laundering. Bollocks!!! What they do with the money they received as gift is up to them. If anything the recipient of the gift may have to declare taxes on those. But guaranteed it is not money laundering. By the way, let me school you on some facts: No broker in the world will ask you where the money is from that you intend to fund your account with. Why? Because it is not required by law and hence is irrelevant. What is very relevant, however, is that your bank asks you where the money is from when you receive certain sums in your bank account. Why? Because they are required by law to do so. So, you receiving money from someone is not money laundering. Nor is it if you deposit the received money in your bank account. And it is also not money laundering when you turn around and transfer the deposited money from your bank account to your brokerage account.
b) You just said John opened an account in his name. So he is the beneficial owner of the account. He can do with any of the proceeds as pleases him. If he returns money to you as a gift then you may have to declare certain taxes. But again its not money laundering.
c) By the way you can open both accounts with different brokers in your own name. Nothing speaks against that and because you are not acting illegally by shorting in one account and longing in another account you do not commit any fraud or criminal act whatsoever, no John involved.
d) Here is where you are being stupid: Even if you opened two accounts in your name with different brokers, with the EUR/USD example you are long 17.5k and flat in the account (given as OP laid it out, that you are forgiven negative account balances). So, you are in no way flat but up 2.5k. This whole story has NOTHING whatsoever to do with whether you involve another individual or do it all on your own. You are missing the point completely.
Your claim of charges is utter bullshit. Sorry mate, but you already messed up the whole story, there is no wire fraud nor money laundering going on at all. Again, you do not need to involve any John, and even if you involved another individual...in Germany, for example, you can give 1 billion Euros to whoever pleases you as long as applicable taxes are paid (inheritance or gift giving, or what have you). I am almost sure the same applies in the US, Japan, France, or any other country as well. Your law degree utterly fails you here...
Last edited:
i feel the same here
you must be a complete idiot, its amazing the length people would go to put others down when all they seek is advice or help.
I think an idiot is someone who doesn't realize their IP can be turned over to police after they post on an open forum step by step how they intend to defraud their broker. And yes, they can and will find you. You're making it way to easy for them.
Doubt there is enough of a Gap still plus need to keep opening accounts in other names, gets tricky!
The Swish HUGE move back in Jan/Feb doing that then, would of made you SERIOUS MONEY.
Any move, at that risk, will likely Margin call out the 1 side instantly aswell, so no way to hold it back to BE after taking a profit on the other side.