Harouna Traor’e was an employee with Thomson Reuters, he was laid off due to downsizing. There is some inconsistencies as to his position at Reuters. According to Valbury attorneys, he was a seasoned market risk analyst at Reuters and according to Traore’s attorneys, he was employed at Reuters to sell analysis software to investors and he had no prior experience in financial markets. When Traore applied for the Valbury account, he claims that he embellished his trading experience.
I began this post with the discrepancies regarding Traore’s experience as this is the crux of Valbury’s defense. Valbury is the brokerage that Traore applied for a trading account. Traore is claiming that he was using a demonstration version of Valbury Capital’s brokerage platform so he could familiarize himself with the basics of trading. He subsequently opened an account, depositing 20,000 euros. He was practicing on what he believed was the demo version and made huge trades. He later found that it was not the demo and he had amassed a loss of more than 1 million euros.
He was obviously distraught but he did reverse the loss and eventually built a substantial profit of over 10 million euros. He contacted Valbury to explain his experiences and Valbury claimed that he had breached his contract. His positions were voided and cancelled. Considering that the brokerage could not realistically cancel his transactions as they were ‘live’, in essence they just confiscated his profits.
Valbury contends that since Mr. Traore made the trades under the belief that they were on the demo program, they are treating his trading as a ‘manifest error’. They also allege that Mr. Traore had breached his trading limits.
Mr. Traore’s legal counsel contends that treating the trades as a ‘manifest error’ is spurious because when these trades were exercised, Mr. Traore was fully aware that he was trading ‘live’ and not on the demo program. Counsel also contends that Valbury should have prevented him from breaching his trading limits. As Valbury is in sole control of the live platform, it is their responsibility to maintain that trades exceeding a trader’s limits should be barred by the program.
Valbury is attempting to keep this lawsuit to be heard in the French courts by portraying Mr. Traore as a financial services professional rather than an inexperienced colnsumer. The French courts are more supportive of consumer protection.