Yahoo Finance Trader who made £10m profit while 'practising' sues a British firm for keeping the money
A "novice" trader who made £10m profit while “practising” has launched legal action against a British firm after it refused to let him keep the money.
Harouna Traoré is suing UK-based Valbury Capital after it seized the earnings he made while using what he believed was a demonstration version of its platform.
The day trader opened a £20,000 account with the company last summer after using a simulation of its trading software to practice dealing in equity futures, according to the Financial Times.
A couple of weeks into the training course, Traoré placed a £1bn order for securities, before realising he was on the live platform and had accumulated a loss of over £1m.
In a bid to recoup his losses, he carried on trading, turning his debt into a profit of more than £10m and building up a $5 billion position in US stock futures.
Despite an impressive turnaround, Valbury claimed that Traoré was in breach of his contract and that his holdings were “void and cancelled”.
In January, he filed a writ against Valbury in a Paris court as a consumer, claiming that the brokerage was negligent and owed him the £10m that he had made.
The married father-of-two said that he “could only think of my family” and was “stressed” about the situation.
The Indonesian-owned financial services company is expected to argue that Mr Traoré is a professional, meaning the case would not be heard in France where he has greater rights as a consumer.
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.”
He added that Valbury had made sure that regulators at the UK Financial Conduct Authority were kept “fully informed”.
Traoré ‘s lawyers have said that Valbury could have enforced stricter trading limits on him and will dispute that his trades were a “manifest error”.
However, the brokerage is expected to argue that Traoré claimed to be an experienced trader in his application to open an account.
He is expected to admit to have embellished his credentials.
The risks are high for Valbury, which experienced losses of £455,405 in 2016- its last set of publicly filed accounts.
