Friends / Lawyers / Legal Consultants,
My 30 odd friends and me have a serious problem, and would like to know what legal course should be adopted.
A person by name Mr.X, started an investment business where he would collect money from "investors", and would invest these into Futures & Options in the stock markets. He also had a website, which is currently down. The investment philosophy was that he would entitle us to a share of profit or loss in an equal sharing basis. Meaning, if at the end of the month, there is a profit of Rs. 1000, it is shared between Mr. X & me, on a 50-50 basis. Also, that if there is a loss, it would be borne in the same fashion. However, if you would not withdraw your money, the profit would be added to your principle and the next months profits were to be proportioned accordingly.
Mr. X only worked on the basis of referrals, and would take money only from people who were referred to him by his "existing clients". While I did not know Mr.X, I was introduced to him by Mr. Y. He would send us a monthly performance report, which talks about the net current value of our investments. I initially invested in 2009, and was not in need of my money until spetember 2011. Back in September, when I called him, he told me that he as taken aggressive positions in the market and would not be able to return my money immediately. However, he requested for 2 months and that time was provided to him.
Back in January 2012, I got to know that the others too had such issues with him and that when I met Mr. X, he told me that all the money has been lost, and that he does not have any property / money to make good my money. However, I asked him to take more time (about 6 months) and then return my money, in utmost good faith. It's been 6 months now and he has not been responding to calls / e-mails, etc.
I contacted Mr. Y, who had earlier introduced me to Mr. X for this business and Mr. Y also tells me that he has a few lakhs invested with him, and that he has not got his money either. Mr. Y is also willing to take a legal route against him.
On behalf of my 30 odd friends, I'm posting this to know the following:
1. What legal action can be taken againt this guy?
2. What should be the procedure to expedite a legal case against him?
3. Should all of us file 1 case against him, or should it be individual cases?
4. Should the case be a Civil case as a recovery suite, or should it be a criminal case?
Please advise.
