Alledged French Day Trader Is Suing A British Brokerage Firm For $11.6 Million

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Day trading is a dangerous game especially if you’re not up to speed on the events and challenges that change the dynamics of buying and selling equities. Harouna Traoré, a French day trading trainee, decided to invest $23,000 with U.K.-based brokerage firm Valbury Capital last year because he wanted to learn how trade equity futures the right way. Traoré used a simulated version of the Valbury trading platform in order to get his feet wet in the day trading game when he was taking an investment course in Paris.

A few weeks later Traoré started trading at home on what he says was a demo version of the Valbury trading platform. He thought his orders for U.S. and European equity futures wasn’t real, so he put €1billion worth of orders in the system before he found out the demo platform was actually a real trading platform. He lost more than €1 million before he realized he was on a live platform, so he decided to continue trading to recoup his losses. Eventually, Traoré accumulated more than $5 billion in U.S. equity futures. The loss he thought was going to break him turned into a major gain.

Harouna continued trading, eventually building up a $5bn position in US equity futures. He was turning his huge loss into a profit of more than €10 million. But Valbury wasn’t happy with the way Traoré executed the trades, so the British Brokerage firm said his transactions violated his contract and his profit was null and void. Traoré filed a lawsuit in January 2018 to get the money he says he earned trading through Valbury. Valbury denies they did anything wrong because the firm says Traoré is a professional trader, not an uninformed consumer. Valbury also claims Mr. Traoré was a frequent trader, according to the application he submitted to Valbury.

The Traoré lawsuit can cost Valbury more than its reputation as a reputable brokerage firm if Mr. Traoré wins the lawsuit. Valbury could go belly up because the amount of the lawsuit is equal to the firm’s annual revenue.

Traoré’s lawyers claim he is not an experienced financial trader. The lawyers say he is a performance analysis software salesman, not an experienced investor or day trader.

There’s not doubt, Day trading can be cash cow for knowledgeable day traders, and it can be a thorn in the side of brokerage firms that don’t stay on top of the traders that are using them to make a fortune one way or another, according to the top hedge fund investors.

Read More: https://www.cnbc.com/2018/06/21/trader-builds-5-billion-position-after-realizing-it-wasnt-a-demo.html

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