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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 31300
Experience:  Over 5 years in practice
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This is for Remus2004

Customer Question

This is for Remus2004. What is defined as a fraudulent document? How shall the litigation on a contract dispute undergo if one of the parties only signed his/her name in his/her commonly known name or his/her legal name?

Submitted: 4 years ago.
Category: Law
Expert:  Stuart J replied 4 years ago.
Hello, I am Law Denning and I am a practising solicitor in a High Street practice. I have been an expert on this website in UK law since 2008. During that time, as you appreciate, I have answered thousands of questions from satisfied users on a variety of subjects. Because we are all in practice with clients and court and other users, I might not always respond in minutes, particularly evenings and weekends. Please bear with me in that case

It is my pleasure to try and assist you with this today. Please bear with me
while I gather some further information from you in order for me to be able to
advise you fully.

Unless I have all the facts that I need, my answer would not be accurate.

-Could you explain your situation a little more?
Customer: replied 4 years ago.

Ok so this is the situation. Now I have a friend who runs a private equity fund, so he collects private investments from people. Now he encountered bit of a hiccup, he has this investor who invested 500,000 HKD, and it it agreed that he can only lose 25% of that for them. Now this investor is also very supportive of him and borrowed him another 500,000 HKD. Now the fund actually lost all of the money with a bad bet on equities, but he took out his money and started his own individual operations, he made back the money with the 25% loss of the original 500,000 HKD and also paid back the sum of the money which he borrowed from this investor. (There was nothing on the contract which stated that he could not pay back the losses with his own money, it basically says that if the losses exceeds the agreed amount "the fund is responsible." hence, as long as the fund finds a way to pay their client back it's fine.

Now, the investor is saying that he didn't communicate clearly that the fund lost money when he returned the money and thought that it was profit, but he basically sent a text when he was in the UK to this certain investor that "the invested capital has to bare a 25% loss", which is quite clear, in some sense I believe she concurred with what he said as his client actually then gave her account number to him, there is also a copy of the contract saying that profits are not guaranteed but losses are. Now they are trying to say that he was irresponsible and finding ways to sue him, both commercially or criminally, but from what i can see there is actually no what which he "frauded" them, he used his own new operation to pay their losses, and everything which was stated on the contract was paid back.

Therefore, I don't really understand why he's worried, because he seems worried. Hence, everything on the contract was followed upon, and it was signed by both parties. He had absolutely not taken any money, and there was actually no clear statement on the contract that if the fund loses more than 25% the fund manager has to notify his client within how many business days. So I do not understand how this is done.

Anyways, the contract was signed in Hong Kong, but the trading happened in the United Kingdom, and every account which he traded on was based in the United Kingdom, is there in some sense a cross boarder issue here?

He has also reported this case to the police, that she is in someway causing nuisance to him, be briefly outlined everything in the contract, the police in Hong Kong agreed that he did everything, and I ensure you that he stated everything in truth, now he called back about the case of nuisance but the case has been closed. I am now interpreting that there is not much of a criminal aspect then as the case has been closed by the police already.

I would like you to answer me on the take of this, whether is liable for anything and the necessary actions he should take to protect himself.

Customer: replied 4 years ago.

My friend is actually had his parents and everything investigated by this person. The brother of his client is trying to contact his parents, he CLAIMS that they spoke to a high ranked police and claimed that the CONTRACT which he signed with his client is a fraudulent document, but it was a two people contract, which he signed with them, that's very weird. It is very weird that this client is threatening to call the police unless they receive reimbursement. I shall also attach the contract here.

(a) Regulation of Investment Services - It is illegal to carry on a business in a regulated activity such as managing a portfolio of securities for another person without a license from the SFC. If you actively market a service to the public in Hong Kong and the service is a regulated activity, you are deemed to carry on a business in that regulated activity. Here, it seems that you are managing a portfolio of securities for Ms. Wong but it isn't clear if you are carrying on a business or if you have actively marketed to the public in Hong Kong.


This is the law in Hong Kong for funds.

My friend replies to me:

"In light of the comment about regulation of investment services: I have not been trading in Hong Kong, non of the indicies or currencies I bought belong to a Hong Kong authority. I mainly traded Foreign Exchange, which is somewhat very irrelevant and not fairly related to securities, as I mentioned in the phone call to you, I do not actively market to the public of Hong Kong. I only manage this for a very few friends and family members, and no, I am not carrying on a business, I do not charge them performance fees or anything, I do not claim to them it is a business, I only said it's a fund of private money and that's it. So no, it's not a business, I do not claim it is, and no I do not advertise it to the public. City Index is a spread betting company, I'm not sure if you have heard of it, but I do not physically purchase a pile of securities, I simply go "long or short" on a financial product and the company pays me the difference."

So what's your take on this? Thank you. See if there is any fraudulent aspect of it

Customer: replied 4 years ago.

Hong Kong and the UK runs the same legal system by the way, so give me your UK law take on this situation

Expert:  Stuart J replied 4 years ago.

This isn't my area I am afraid. I am going to opt out of this for
another expert to consider. Please do not reply or it comes back into my inbox.
Another expert will pick it up at some stage. It is now open to all experts.

Expert:  Nicola-mod replied 4 years ago.

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!