Update: 'It'll cost you $1.8 million': Business owner asks financial advisor to invest money for him, then refuses to pay advisor's share

Author image for Remy Millisky
Remy Millisky • Writer and Editor
Sep 22, 2023 11:00 AM EDT

A young business analyst saw an opportunity and didn't let it slip from their grasp. 

If you're looking to make a lot of money fast, you can certainly try the stock market. There are no guarantees in this game---you could also end up super broke or in debt. But if you play your cards right, just like u/TheBreakUp2013 did, you could net yourself some cold hard cash. 

This person provided a quick update to their much-beloved story about a deal with their boss that went wrong. They write that as a business analyst, their boss trusted them to invest his own money. The company's owner approached the OP to tell them the plan: invest a bunch of money into the stock exchange and see if they could make it big. If you have $1 million to invest like this owner did, that's a fine strategy. In the end, the boss lost out just due to carelessness. The OP should just keep investing that money, and reaping their well-deserved rewards. 

Check out this entire tale below, as well as commenters who applauded the OP's methods. Then, before your next international trip, check out these 30+ spots that are popular tourist traps you should avoid at all costs. 

Advertisement
  • 01
    Rectangle - 100 THE 193 FEDERAL RESERVEN PE 44480289 E5 100 ¹00 100 10 0 100 00100 EDERAL Steven T. Machin 100 TES 'The owner wanted big risk and big reward' HIVATE 100 575 SA connected them with another, and to the opinions of mankind requires that they 44480289 C in Crester then p d to insti purning
    via Jonathan Borba on Unsplash
  • 02
    Font - UPDATE: Short me $70,000 in Violation of our Written Agreement? It'll Cost you $1.8 million.
    via u/TheBreakUp2013
  • 03
    Font - DISCLAIMER: The names and some of the situations have been changed to protect the identities, but the dollars and general nature of the situation is completely true.
    via u/TheBreakUp2013
  • 04
    Font - BACKGROUND: A year out of school in the early- 1990's, I procured a job as a business analyst for a large, family- owned tech company. This business was located in the booming heart of technology at the time and was very profitable. As tech took off over the next decade, the company thrived and remained family-owned. What was a rich family and company became exceedingly wealthy with a valuation/net worth in the high 9/low 10-figures. The family that owned it was quite neurotic, very moody
    via u/TheBreakUp2013
  • 05
    Font - As I progressed in the company, I gained more and more face time with the owners. I worked on some projects directly with ownership that really paid off and gained me even greater access to their inner circle. Now, like a lot of people at the time and particularly those who worked in tech, I was heavily invested in tech stocks. I discussed some of my investments and gains with ownership as casual conversation, though investing had nothing to do with my role in the company. That is until o
    via u/TheBreakUp2013
  • 06
    Font - in the company, was a personal matter between the owner and me, and to document my compensation for this side arrangement (20% of all profits). Around this same time and by working in the industry I started to notice the weakness associated with a lot of tech companies. They just weren't living up to their hype and stock price and some seemed like they were starting to run out of money. I had no inside information, just a strong sense of which companies were struggling based on my work in
    via u/TheBreakUp2013
  • 07
    Font - Since the owner wanted big risk and big reward, I used his money and obtained leverage or margin from the financial institution where I maintained both his and my trading accounts. The accounts were separate, but both under my name (again, I documented this and gained consent). Well, both my account and his suffered some moderate losses in the first two months of 2000 before the bubble began to burst and both accounts, but his in particular, began to skyrocket.
    via u/TheBreakUp2013
  • 08
    Font - OWNERSHIP'S PETTINESS In June, the company began to suffer a downturn. We were still profitable, but since we provided tech services and products we were not immune to weakness in the broader market. I had not informed the owner of my short strategy. He came to me one day and asked how his money was doing, saying he suspected it was way down like the general market. To his surprise, I informed him that while we still had some money tied up in options (puts) and shorts, but based on the po
    via u/TheBreakUp2013
  • 09
    Font - The owner, either through ignorance or lack of attention, said "Great, $1.35 million. Fantastic work in this down market. Will you please wire it to me?" I responded that I would, but would be taking my 20% of the $350,000 profit, or $70,000, before wiring him the $280,000. I also reminded him I still had open positions that had yet to pay off or close, but I didn't state the amount. He, once again, appeared not to understand or comprehend the open positions statement, but instead totally
    via u/TheBreakUp2013
  • 10
    Font - how times were tough, I should be grateful for a job, particularly at my young age, and the entire $350,000 was necessary for him and the company. I knew this wasn't true based on my position within the company. Worse, this was my first time personally experiencing the greedy and corrupt nature that served as the basis for ownership's reputation.
    via u/TheBreakUp2013
  • 11
    Font - THE REVENGE Now comes the revenge. Since, after two separate conversations, the owner didn't seem to grasp that the open positions would yield at least some income, and thus additional profit, I decided not to mention it again. I sent him back the entire $1.35 million and continued to manage the open positions to the best of my ability. And here's the kicker, the owner never brought it up again. He seemed to think the $1.35 million payment was the entire value of the account and never und
    via u/TheBreakUp2013
  • 12
    Font - Ultimately, after a bit more net gain, I covered all of the shorts and exercised all of the options (puts in this case) for an additional $1.8 million. I worked for the company for 3 more years and owner never asked about it during my tenure, after I gave notice, or since. I know it's a bit crass and even shady af, but given his dishonesty with me over the $70,000, I felt justified in keeping the additional $1.8 million. I paid taxes on the gain (long term cap gain), and went on my way wi
    via u/TheBreakUp2013
  • 13
    Font - The final ironic cherry on top of this sundae is that during my remaining 3 years I gained greater influence with ownership in position within the company because they considered me loyal for giving the $1.35 million back and not making too much of a stink about the $70,000 profit. Little did they know I got the better of them. The company eventually folded due to family disputes, but my understanding is that ownership walked away in very good financial position. They likely could have be
    via u/TheBreakUp2013
  • 14
    Font - UPDATE: The original post is below. Only this "update" paragraph is new. There have been no negative consequences from the below, and no consequences (other than a few people DM'ing me with incorrect guesses). In fact, the remaining family members have reached out a time or two about some consulting work. They have no clue.
    via u/TheBreakUp2013
  • 15
    Font - Zookeeper-007 That's why you don't sew over people handling your money for you
    via u/Zookeeper-007
  • 16
    Font - unicorn8dragon Bravo, and some jealousy too haha. But for any others reading this, be careful. There are a lot of laws and rules around investment advising. I'm not sure if those would apply to this specific situation, but it's always going to be murky and especially if it's a personal or professional relationship.
    via u/unicorn8dragon
  • 17
    Font - + [deleted] So...if the account was in your name, weren't you on the hook for the $1.3 million you paid him? Wouldn't that have been taxed as short-term gain?
    via u/deleted

Want More? Follow Us and Add Us as a Preferred Source on Google.

Tags

millionaire stocks malicious compliance bosses malicious-compliance-reddit finance update money shorts owner wealth wealthy
Scroll Down For The Next Article