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