French Retail Trader Makes €10 Million Thinking He Was on Demo Account

The Lobby
1

This story would be funny, if it weren’t so sad. It’s a cautionary tale on many levels – the perils of online trading, and the difficulties in evaluating broker integrity, to name just two.

Here’s a brief summary of the story from Finance Magnates.

Finance Magnates picked this story up from the Financial Times, but could not link to the FT article, because FT is available only to paid subscribers, and cannot be redistributed by those subscribers.

It you have access to the Financial Times, you should pull up their article for a more complete version of this story.

Based only on this Finance Magnates article, here’s what occurs to me:

Regardless of the fact that the customer initially thought he was trading on demo, the broker (Valbury Capital) knew that he was trading – and losing – real money. So, why did the broker allow a €20,000 account to go €1.000.000 in the red? Apparently, the broker thought the customer was capable of covering his debt. Fair enough.

But, if the broker was perfectly willing to take a million euro from a customer who was losing, how can they justify refusing to pay him, when he earns back his loss plus a handsome profit?

Unless there’s more to this story than Finance Magnates has told us, I hope this customer nails this broker for all of his profits PLUS court costs.

2

I think somebody in this case is telling a literally incredible story.

Its always obvious that in a dispute with a broker, the broker will always go back over what you have declared in documentation, starting with the application for an account. I’ve read cavalier advice on forums recommending new traders just enter whatever information they think the broker wants to see just so they can get an account open. This will always cause a problem, and the broker will always object if the truth cannot be verified. On top of which, at least in the UK, its a criminal offence.

3

It will play out in court - country yet to be determined.

Most press headlining as a ‘retail trader’ or ‘novice trader’, even witnessed ‘aspiring trader’.

Broker’s lawyer:

Robert Falker, the lawyer representing Valbury in the legal proceedings, made the following comments to 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.”

4

Hahaha I read this story and was amazed :smiley: I’m not sure if this guy is lucky and how you could mistake a demo account with a live one. The one thing I couldn’t understand is how exactly he breached his contract? If he did, why did the broker let him trade even more?