What kind of scam scheme is this? Neighbor invested $200 and they take huge positions for him

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hi


i'm wondering if this scamming scheme is familiar to one of you and what their intention is. my neighbor (who is 68y old and has zero clue about forex) told me fully excited that he invested $200 into currencies and after 3 weeks it already became 700. some traders who called him, he has to give them 10% of the profits. right away i knew there is something wrong about this. later he said he invested $200, and "they" also paid $200 in his account. they call every day and check via remote desktop his positions and sometimes close/open new ones. he showed me the open positions: 3 times EUR open, all of them same lot size of 0.10. obviously they apply zero risk management nor ATR. lets say those 3 positions have an average D1 ATR of 50 pips, it would mean they risk $150, which is about 20% of his account all against EUR. or even more. crazy. 

Of course their goal is that he puts later big money in the account, and i guess as soon as he tries to get the money out he will not be able to do so..?
does this scheme look similar to anyone? besides the non existent risk management, how likely is it they're not a scam and he will get his money out?
and whats the catch with their additional invest of the $200? for they have an easier game to keep his money as well? 

when i looked up the broker i found out its a while label, but i guess i'm not allowed to mention their name.


thanks


 
  1. If they win, he makes 10%. If they loose he looses nothing. Sounds great for him.
  2. The ATR of the EURUSD is 85 Pips, the Spread is 1.5 or 1.8%; yet he charges 10%. Their money will be gone soon enough.
  3. Trading other people's money for profit required a license in most countries; he's risking serious jail time.
 
William Roeder:
  1. If they win, he makes 10%. If they loose he looses nothing. Sounds great for him.
  2. The ATR of the EURUSD is 85 Pips, the Spread is 1.5 or 1.8%; yet he charges 10%. Their money will be gone soon enough.
  3. Trading other people's money for profit required a license in most countries; he's risking serious jail time.

no, it's the other way around, the neighbor is the clueless client/victim, and got called from some broker or whatever they are to invest in them. he has to give them 10% of the profit his account makes. 

 
bosslife:

no, it's the other way around, the neighbor is the clueless client/victim, and got called from some broker or whatever they are to invest in them. he has to give them 10% of the profit his account makes. 

It is similar to HYIP - you can read in wikipedia here.
Nothing special ..
 
Sounds like binary option fraud company. Warn your neighbour to detach from them. It is likely that they have personel that know how to take advantage of emotiomal weaknesses of customers, mainly elderly. This was the same with option companies. Most probably that the callers use stage names because its ilegal to call a customer and persuade him to invest in most countries. They can get real mean, even taking his house.
 
If they continue to make profits but be aware when they will ask to invest more.
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