A French day trader is suing UK broker Valbury Capital after it voided the €10m profit he had accrued using what he thought was a demo version of its trading software but which turned out be a live account.
Harouna Traoré opened a €20,000 account with Valbury in 2017 after he had used a dummy version of its platform while on an equity future trading course for retail investors in Paris.
While using what he believed was a training version of the platform that protected him from losing any money, he placed orders for €1bn worth of European and US equity futures. It was only when he had racked up losses of more than €1m that he realised the account was live.
Traoré then continued trading and managed to establish a $5bn position in US equity futures and a profit of €10m. But when he informed Valbury of the situation, the broker told him his positions had been cancelled because he had breached the company's trading limits.
Traoré is suing Valbury, which is owned by an Indonesian financial services company but based in the UK, for breach of contract and the return of his €10m profit.
According to the Financial Times, Valbury is arguing that Traoré is not a novice retail trader but an experienced capital markets analyst. "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," said Robert Falkner, partner at law firm Reed Smith which is representing Valbury.
Traoré's lawyers say that their client has been employed by Thomson Reuters but was repsonsible for selling its performance management software rather than as a market analyst.
Valbury has also argued that the trades were a "manifest error" which is disputed by Traoré who argues that the trades that led to his €10m profit were only made once he realised his account was live.
Should Traoré be successful in his claim it could be ruinous for Valbury given that its revenue for 2017 (£9.88m) is effectively equal to the sum that Traoré is seeking for compensation.