Lost a friend's investment in the stock market

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leeandrews

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A few years ago a friend saw that I was making money as an individual being succesful (at that time) trading stocks and gave me $60,000 to invest at my discretion. I gave her a personal guarantee. Well, over the next several months I manages to lose not only ALL of her money but $120,00 of my money (documented). I did not represent myself as a "broker", just as someone who had success trading from my home. I fully acknowledge that I owe her the balanced of $55,000 not paid back but she is threatening to put me in jail, etc. I would like to know if I have done anything ILLEGAL/CRIMINAL by taking her money which she gave me and putting it into my stock trading account. I NEVER TOOK A PENNY FOR PERSONAL USE. Thanking you all ahead of time for your legal response. I just feel horrific about what has transpired.
 
What exactly was the verbal guarantee? If it was something to the effect of 'I will double your money', you had better be able to show how it was you planned on doing so, or be able to prove that this "friend" and you were just a couple of stock-market naive suckers. Otherwise, you could be charged with fraud.
 
If my 401K gets cut in half I can't put my broker in jail unless he bought a sports car with it instead of investing it. Did you make her aware of the risk involved? Your friend should have got something in writing. If she wants to hand out $60,000 on a verbal agreement tell her to give me a call, thats dumb. You should still feel bad forever!
 
You are not going to face criminal prosecution. What you did was entered into a joint venture. You were not being paid for trading the stocks, you were sharing profits and even "guaranteeing risks." That last part took some ego my friend. (That isn't a slam against you). No one in the industry can or will do that. It's nice that you are sticking to your word.

You didn't represent that you were a broker, if you traded your own money just like you traded her money, didn't co-mingle funds with funds that you were using, and didn't make money on the TRADES vs making money from performance you are ok.

She is just, understandably, crying in her beer and panicking over the loss of her money. Such is life.
 
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