And finally…accidental trader makes £10m, but brokerage says he can’t keep his profit
A trader from who racked up a €10m (£8.8m) profit after realising he wasn’t using test program is suing the company providing the platform after it seized his earnings.
France-based Harouna Traore was taking a class in Paris to become a day trader and had been using a demonstration version of British brokerage firm Valbury Capital’s platform to learn how to trade equity futures last summer, the Financial Times has reported.
He opened an account at Valbury with about 20,000 euros and a short time later, while at home practising on what he thought was the demo, racked up real world losses of £1m on positions worth more than €1bn of orders in U.S. and European stock futures.
He then realised that the trades were live.
“I could only think of my family,” Traore, married with two children, told the FT. “I was stressed.”
But instead of stopping, he continued to trade, according to the FT’s report, increasing his position in U.S. stock futures to $5bn and turning his loss into a profit of about £10m.
Traore called Valbury a few days later to explain the situation. In response to his skillful turnaround, the firm declared Traore was in breach of his contract and that his holdings were both void and canceled.
Traore has sued Valbury for the £10m, declaring the firm was negligent and had breached his contract.
Valbury, owned by a Indonesia-based financial services company, denies doing anything wrong.
The FT reported the firm is expected to argue that Traore was a financial services professional, not a consumer, and that the case should not be heard in French court, where Traore would likely receive much greater protection.
Traore for his part admits he “tried to embellish” his experience on his application to open an account on the site.
The case could be of vital importance for Valbury as Traore’s haul matches the firm’s entire revenue for 2016, according to the most recently filed public documents.
Valbury’s revenue declined 15 percent year-over-year from 2015, the FT reported.
Robert Falkner, a partner at Reed Smith, the law firm representing Valbury, told 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.”
Traoré lawyers said in a court filing that Valbury could have imposed stricter trading limits on him. They will also dispute Valbury’s claim that his trades were a clear error.