Now you are reading
Trader sues the broker for 10 million. He thought he was playing DEMO

Trader sues the broker for 10 million. He thought he was playing DEMO

created Paweł MosionekJune 26 2018

A story so bizarre it must be true. Daytrader from France is suing the British broker demanding the payment of his entire annual profit, which amounts to EUR 10 million. Why? At first he thought he was playing on the DEMO account ...

DEMO "became" REAL

The defendant's broker is Valbury Capital from Great Britain. Haruona Traore opened a real account with this broker, depositing the amount of 20 000 EUR on it after an earlier trading course in Paris, which took place on demo accounts.

A few weeks later, after completing the course, Traore began to speculate alone with full conviction that he was still training on the demo account. As a result, he took a significant risk by engaging in a single transaction the volume of one billion euros on European, American and futures contracts. Then he realized that he was using the platform in the real versionand his balance on the bill is loss of about EUR 1 million.

"Unsure" worked

The French trader continued trading and, to compensate for the losses, he increased his exposure to the transaction to EUR 5 billion. Fate was on his side - he managed to rebound and not only go to zero, but also generate a profit of 10 million. The problem came later. Upon contact with the broker, Traore heard that he had breached the terms of the contract, and the positions had been "canceled and closed".

FCA, an institution supervising the capital market in Great Britain, is considered one of the most renowned. But the rightness of the accusations will not be decided by the regulator and the court. Hence the submission of a claim by Traore to the French court in Pontoise. The claims relate to the payment of the entire amount earned, i.e. the 10 million mentioned earlier.

The broker himself denies having committed any negligence and will also file an appropriate application to the court. Valbury also claims that a French trader should not be treated as a "consumer" but as a "professional", which would result in dealing with the case in the UK, not France, which could also benefit Traore.

Robert Falkner, representative of the Valbury Capital broker: 

"We know the allegations of a French investor, an experienced analyst employed in Reuters, which are definitely unfounded and will be questioned by us."

Interestingly, the main interested admitted himself officially that while creating the account he did not fully present the truth in questions about market experience and to some extent exaggerated them. Attorney of the main interested, that this is true, He worked in Reuteres but only as a software vendor, which does not raise his investment qualifications and the case should ultimately be considered in France. Additionally, he stated that Traore should not be able to trade such a large volume.

What will result from this?

A win by a French trader would mean huge problems for Valbury. The broker earned £ 9,88m this year compared to £ 11,7m a year ago. It can therefore be assumed that an unfavorable judgment in the case would mean the beginning of the end of its activity.

An absurd story, but de facto it could happen to anyone. It teaches us a few basic things:

  1. Always make sure on what account you are logged in,
  2. Choose only proven brokers with an established market position,
  3. Do not "color" your investment experience,
  4. By treating a real account like DEMO you are able to achieve amazing results :-).
What do you think?
I like it
Heh ...
I do not like
About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.

Leave a Response