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French intern makes 10 M GBP thinking he was on demo...
- Thread starter TraDaToR
- Start date
The crux of this issue is what is called the meeting of minds specifically due to mistake in contract law and the issue of equivalence. And it would depend largely on what the broker thought when the trader was making the trades whether the broker thought also that the trader was on demo or whether the broker knew that the trader is on real trading. In this case the issue at hand is $12 million profit then the court would examine what happens when this is $12 million loss to assess how the situation would be for both the broker and the trader.
1. If the broker also thought that the trader is on the demo and that's why they didn't do anything to terminate the trading on the trade that is over the position limit when the trader was making >$1 million losses thinking that the trader is on demo and none of the losses is real then in this case there is a meeting of the mind with both the broker and the trader thinking the same thing, then unfortunately the trader wouldn't be able to keep the $12 million because in this case, since both parties thought it's demo, the broker wouldn't have held the trader responsible for the losses when he incurred them and should he continued to incurr them or worse enlarged them and the broker would've been on the hook for the $12 million losses that the trader generated since they mistakenly thought it was in demo. Then if the trader wouldn't have been responsible for any losses thinking it was generated in demo then he shouldn't be entitled to the profit either because it's still in demo. The broker should've been still fined and be subject to penalization though by the regulators for inappropriate supervision of operation, failing to execute fiduciary of duties for clients, improper handling of funds, but that's a different story.
2. If the broker is fully aware that the trader is in real trading and responsible for all losses and profit did nothing to allude to the trader of that fact he is on real trading even though they are in complete knowledge that the trader has signed up for demo trading and did nothing to interfere with the trader when the trader is trading with the position over the position limit when the trader made that > $1 million loss with the full expectation that the trader would be responsible for the losses because the trader was in fact trading in real trading situation, they shouldn't be entitled to the profit now that the trader has made profit even though the trader thought he was in demo. In this case, there is no meeting of mind where the broker is fully aware of the fact that the trader is in real trading but the trader thought that he was in demo. The contract law stipulates that even though the contract can be voided if there is no meeting of minds due to mistake but if one party has already benefitted from the mistake at the expense of the other party, then the contract cannot be voided and the other party that was in mistake should be able to enjoy the fruit of that contract. The broker benefitted where they are fully aware that the trader in real trading and the trader was making large losses as they know they would be entitled to go to the trader and hold him responsible for every single penny of the losses that he generated then in this case, the trader should be also entitled to keep every single penny of the profit that he generated also in real trading even though to him, it was demo.
This is a case that gives arise to the famous adage "you can't have your cake and eat it too". In the first scenario where both the broker and the trader think it's demo it's the trader who "can't eat his cake" because he already "had the cake" and won't be responsible for the losses then he "can't eat it too" by keeping the profit. In the second scenario where the broker thinks it's real trading and the trader thinks it's demo, it's the broker who "can't have the cake and eat it too" as the broker "had his cake" by not having been responsible for the losses then he "can't eat it too" by not being entitled to keep the profit either. Neither party would be able to push the losses all to the other party and then hoards all the profit to themselves when it fits.
Everything will depend on what they find in the internal memo of the broker whether they have known the status of the trading platform of the trader or not beforehand and during the whole time when the trader is trading. But still that's a crappy broker when it has such shoddy platform and supervisory structure and only makes $12 million a year. The trader better be careful, the broker could be a front to some "dubious" organization. Even if the court awards the trader the money, he might still not be able to keep it.
1. If the broker also thought that the trader is on the demo and that's why they didn't do anything to terminate the trading on the trade that is over the position limit when the trader was making >$1 million losses thinking that the trader is on demo and none of the losses is real then in this case there is a meeting of the mind with both the broker and the trader thinking the same thing, then unfortunately the trader wouldn't be able to keep the $12 million because in this case, since both parties thought it's demo, the broker wouldn't have held the trader responsible for the losses when he incurred them and should he continued to incurr them or worse enlarged them and the broker would've been on the hook for the $12 million losses that the trader generated since they mistakenly thought it was in demo. Then if the trader wouldn't have been responsible for any losses thinking it was generated in demo then he shouldn't be entitled to the profit either because it's still in demo. The broker should've been still fined and be subject to penalization though by the regulators for inappropriate supervision of operation, failing to execute fiduciary of duties for clients, improper handling of funds, but that's a different story.
2. If the broker is fully aware that the trader is in real trading and responsible for all losses and profit did nothing to allude to the trader of that fact he is on real trading even though they are in complete knowledge that the trader has signed up for demo trading and did nothing to interfere with the trader when the trader is trading with the position over the position limit when the trader made that > $1 million loss with the full expectation that the trader would be responsible for the losses because the trader was in fact trading in real trading situation, they shouldn't be entitled to the profit now that the trader has made profit even though the trader thought he was in demo. In this case, there is no meeting of mind where the broker is fully aware of the fact that the trader is in real trading but the trader thought that he was in demo. The contract law stipulates that even though the contract can be voided if there is no meeting of minds due to mistake but if one party has already benefitted from the mistake at the expense of the other party, then the contract cannot be voided and the other party that was in mistake should be able to enjoy the fruit of that contract. The broker benefitted where they are fully aware that the trader in real trading and the trader was making large losses as they know they would be entitled to go to the trader and hold him responsible for every single penny of the losses that he generated then in this case, the trader should be also entitled to keep every single penny of the profit that he generated also in real trading even though to him, it was demo.
This is a case that gives arise to the famous adage "you can't have your cake and eat it too". In the first scenario where both the broker and the trader think it's demo it's the trader who "can't eat his cake" because he already "had the cake" and won't be responsible for the losses then he "can't eat it too" by keeping the profit. In the second scenario where the broker thinks it's real trading and the trader thinks it's demo, it's the broker who "can't have the cake and eat it too" as the broker "had his cake" by not having been responsible for the losses then he "can't eat it too" by not being entitled to keep the profit either. Neither party would be able to push the losses all to the other party and then hoards all the profit to themselves when it fits.
Everything will depend on what they find in the internal memo of the broker whether they have known the status of the trading platform of the trader or not beforehand and during the whole time when the trader is trading. But still that's a crappy broker when it has such shoddy platform and supervisory structure and only makes $12 million a year. The trader better be careful, the broker could be a front to some "dubious" organization. Even if the court awards the trader the money, he might still not be able to keep it.
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I said 5K not 1.6K, but same difference, notional value is still irrelevant.
"Traoré, who opened an account with $23,000, found himself in the hole by more than $1 million."
That is some dumbass broker, if you ask me...
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I thought this is a French broker but if the broker is in UK, wouldn't it be regulated under FCA? Under UK FCA, no firm is allowed to have clients' funds comingled with the brokerage's own operating funds; everything has to be segregated otherwise they would be closed down.
The currently have one google review: 1 out of 5 stars
Valbury Capital
Scott Eaton 1 review a week agoWorst broker i have ever used, stay away!!! Jeremy in HR is the most rude and obnoxious person i have ever met, so prey you never have a problem with your funds. Their servers drop out on you and their customer service is the worst and most ignorant i have ever encountered for a broker. They withheld my money for no reason for 6 months and gave me no reason for doing this not allowing me to make one withdrawal on an account worth over 100k, NEVER TRADE WITH THIS BROKER!!!!!!!
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The currently have one google review: 1 out of 5 stars
Valbury Capital
Worst broker i have ever used, stay away!!! Jeremy in HR is the most rude and obnoxious person i have ever met, so prey you never have a problem with your funds. Their servers drop out on you and their customer service is the worst and most ignorant i have ever encountered for a broker. They withheld my money for no reason for 6 months and gave me no reason for doing this not allowing me to make one withdrawal on an account worth over 100k, NEVER TRADE WITH THIS BROKER!!!!!!!
Confirms even more my suspicion that it might be a "front" cuz it doesn't give a s*** about its customers and they don't care the fact that their annual revenue is just $12 million, this trader's profit. But to be fair, I didn't really say they are a dumbass broker though, it was @Pekelo who said it in his post above:
I said 5K not 1.6K, but same difference, notional value is still irrelevant.
"Traoré, who opened an account with $23,000, found himself in the hole by more than $1 million."
That is some dumbass broker, if you ask me...
Fixed my previous post to quote Piccolo instead of you.
I agree this broker looks very dodgy, probably the broker never even sent the 'real' account orders to the exchange, they most probably bucket all the trades hoping the account eventually blows up and they get to keep all or most of the initial deposit.
If true there is no chance they could ever pay out the 11 million as it doesn't even exist and neither did the initial $1million loss.
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Hey genius, if the orders never go out of the brokerage, how the fuck did the guy trade real money?