A trader-in-training claims he racked up a true-to-life gain of 10 million euros in what he thought was a demo account. Now he wants his money.
The aspiring day trader in question is Harouna Traoré, who’s based in France and opened a 20,000-euro account with a British brokerage called Valbury Capital after completing a trading course.
To prepare for the real deal, Traoré says he used what he thought was Valbury’s demo platform for practice. He ran up 1 billion euros of exposure in US and European equity futures before realizing that he was, in fact, transacting actual money. But at that point, he was already 1 million euros in the red, according to a report from the Financial Times.
Not wanting to absorb such a large loss, Traoré wound up amassing a $5 billion position, which he was able to swing into an eventual 10-million-euro profit.
“I could only think of my family,” Traoré, who is married with two children, told the FT. “I was stressed.”
Having salvaged his initial investment, and made a nice profit on top of that, Traoré called Valbury to fill them in. Much to his chagrin, they informed him that he was in breach of contract, and said his positions were “void and cancelled,” according to the FT report.
Traoré is now suing Valbury for the 10-million-euro profit he says he’s earned, citing breach of contract and negligence.
Robert Falker, the lawyer representing Valbury in the legal proceedings, made the following comments to the FT: “We are familiar with the spurious allegations made by the French arcade trader Mr, Traoré (a seasoned market risk analyst formerly employed by Reuters) which are strongly denied as wholly without merit and will be vigorously contested.”
As the above Reuters mention indicates, Valbury is expected to highlight Traoré’s prior trading experience. The brokerage is expected to mention in its defense that Traoré said in his initial application that he was a regular traders of futures and options.
One element that’s yet to be determined is where the case will be heard. Valbury, which is own by an Indonesian financial services group, is expected to try and avoid the more stringent consumer protection guidelines in France by arguing that Traoré is a financial professional, rather than a novice trader.
Read the full Financial Times piece here.
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