Software Opened $8M Loophole, Firm Says

(CN) - A Russian man in the United States on a work visa exploited a software glitch to swipe nearly $8 million by trading Russian ruble futures, a commodities firm claims Cook County Court. Plaintiff Open E Cry claims that Marat Yunusov's trades on June 4 - last Friday - accounted for more than 50 percent of all the foreign exchange trades on the Chicago Mercantile Exchange that day.

Open E Cry, a broker registered on the Merc as OEC, claims that in early June, Yunusov discovered the glitch in the third-party online accounting software it used.

Because of the software error, losses in Russian ruble futures, a lightly traded commodity, were reflected at 1/10th their actual value, Open E Cry says.

Upon discovering the software error, Yunusov and an unnamed accomplice made more than 19,000 trades in a single day - June 4 - booking the losses on Yunusov's account, while hiding his gains in his confederate's account, according to the complaint.

The plan would allow Yunusov to "walk away" from the large debit in his trading account, while recouping his losses through equivalent profits in the other account, the complaint states.

By the end of the trading day, Yunusov's account reflected liquidated losses of more than $8 million, while the other account reflected a gain of $7.5 million, OEC says. But OEC says that Yunusov's greed raised a red flag.

His trades on June 4 accounted for more than 50 percent of all the foreign exchange trades done on the Merc that day, and nearly 98 percent of the trading in Russian Ruble futures, according to a footnote in the complaint.

OEC says it has demanded that Yunusov, of Kazan, Russia, cure his account's negative balance, but he has refused.

OEC demands repayment of $8 million, punitive damages, prejudgment interest of $2,600, attorneys' fees and costs on claims of fraud, fraudulent accounting, unjust enrichment, and injunctive relief.

It is represented by Jeffry M. Henderson and Robert Christie with Henderson & Lyman in Chicago.

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