Legally Investing Other People's Money

[hartman]

What is the name of your state (only U.S. law)? MICHIGAN
Hello, I have been trading in currencies for quite some time now. I primarily trade the EUR/USD pair. Over the past few months, I have started to teach my strategy/rules to friends to show them the potential. Several have come to me and just asked me to do this for them for a fee.

I initially declined but have decided that it may be a good idea. The fee would only 25% of profits. This would be very similar to a hedge fund structure. What I would like to know is this something I can do simply be establishing an LLC or do I need to go through the steps to form a hedge fund? I certainly hope not. I have six firm commitments and would like to launch this on January 1, 2012.

Thank you in advance for your guidance on this matter.

 

[cyjeff]

You must be licensed to invest other people's money.

Do you currently have such a license?

 

[hartman]

Are you certain?

I don't believe hedge funds are required to have any specific license to invest money for others. I also think they are established in that way to avoid the regulations and filing requiriements that Mutual Funds are subject to.

Since I will not be investing in any stocks (securities), I don't believe I need a series 7 or 63. What specific license do I need?

Thank you,
Payman

 

[anteater]

I have six firm commitments...

Please list their names, addresses, and phone numbers.

I am always on the lookout for suckers.

 

[hartman]

These six individuals would not be suckers. That's for certain. My personal account has grown from $10K to $76K in a little over 2 months. I can understand and appreciate your skepticism. I am simply looking for the best way to structure a company to allow others to have me invest their money utilizing the same strategies I implement in my own account with me charging a % of profits.

 

[ecmst12]

I would suggest you explore here before deciding whether to move forward:
http://www.michigan.gov/lara/0,4601,7-154-10555_22535---,00.html

 

[ecmst12]

In particular, look at the definition of "securities":

http://www.legislature.mi.gov/(S(dw5uhdq0aozsv045b2a1fez0))/mileg.aspx?page=getObject&objectName=mcl-451-2102c&

 

[Hot Topic]

These six individuals would not be suckers. That's for certain. My personal account has grown from $10K to $76K in a little over 2 months. I can understand and appreciate your skepticism. I am simply looking for the best way to structure a company to allow others to have me invest their money utilizing the same strategies I implement in my own account with me charging a % of profits.

Anyone who makes a statement like, "My personal account has grown from $10K to $76K in a little over 2 months" in this economy has a bridge for sale.