How an "honest" stock exchange drove a Kazan trader into debt - page 6

[Georgiy Merts]

Alexey Volchanskiy:
He's some kind of petty manager, and the 7 million that was originally owed was inherited by his wife. So the money is by no means a seed.

Yeah, that's what I thought at first too... But, did some digging on the internet.... I think this guy turned into a "small time manager" with 7 million from his wife on the first working day of the year. To avoid paying back the millions he owed to Alfabank... And before that, he was noticeably richer.

There's a very interesting article here that says, "The kid was on his way to success, but he didn't get lucky." And I don't feel any sympathy for him anymore. It would be nice if the Alfa Bankers could shake him down for 9 million in debt:

http://sterlitamak.ru/newscity/v_gorodskom_sude_sterlitamaka_nachalos_zasedanie_po_delu_denisa_gromova/

[Alexey Volchanskiy]

George Merts:

Yeah, that's what I thought at first too... But, did some digging on the internet.... I think this guy turned into a "small time manager" with 7 million from his wife on the first working day of the year. To avoid paying back the millions he owed to Alfabank... And before that, he was noticeably richer.

There's a very interesting article here that says, "The kid was on his way to success, but he didn't get lucky." And I don't feel any sympathy for him anymore. It would be nice if the Alfa Bankers could shake him down for 9 million in debt:

http://sterlitamak.ru/newscity/v_gorodskom_sude_sterlitamaka_nachalos_zasedanie_po_delu_denisa_gromova/

In fact, if I were him I wouldn't make any reverse deals and leave the debt in billions or whatever it was. Then no one would get to him for sure)). But how much fun would it have been...(dreamily rolling his eyes :)

PS: all video has been removed

[Georgiy Merts]

The video has indeed been removed. But the article is very revealing. And at the bottom there are also comments from disgruntled people.

I doubt very much that if he were "just a small-time manager" he would have plundered his wife's entire inheritance on the stock market like that. For him the seven million is the result of only one "case". And who knows how many of those "deals" he pulled off...

The kid was on his way to success... but he didn't get lucky. It turned out that it was much harder to bend the system than its individual representatives.

Yeah, and you wouldn't be in his shoes, Alexei... "Scale of fraud" isn't what you think it is.

Although, it is not quite clear - maybe it is the namesake and "namesake", the other Denis Gromov, who lives nearby? There are such coincidences - a fraudster and an honest trader, both have the same first and last names, and live in the same region...

[forexman77]

George Merts:

It's not quite clear though - maybe it's a namesake and "namesake", the other Denis Gromov, who lives nearby ?

Did you notice that one is 38 years old and the other 42)

[Aleksey Vyazmikin]

Here is something else interesting in the law

Federal Law dated 22.04.1996 N 39-FZ "On the securities market

"

Article 10.1-1 Requirements to professional participants of securities market and their activities

...

5. The professional securities market participant shall be obliged to organize the risk management system related to execution of professional activities on the securities market and execution of transactions with its own property (hereinafter referred to as the risk management system) that corresponds to the nature of transactions of professional securities market participant and shall contain the risk monitoring system ensuring timely delivery of necessary information to the management bodies of professional securities market participant. Requirements for organisation of the risk management system by professional securities market participants shall be established by the Bank of Russia depending on the type of activity and nature of operations performed.....

...

"

i.e. the broker should have calculated all the risks associated with trading and not allow the risks to exceed the collateral funds...

[forexman77]

-Aleks-:

Here is something else interesting in the law

Federal Law dated 22.04.1996 N 39-FZ "On the securities market

"

Article 10.1-1 Requirements to professional participants of securities market and their activities

...

5. The professional securities market participant shall be obliged to organize the risk management system related to execution of professional activities on the securities market and execution of transactions with its own property (hereinafter referred to as the risk management system) that corresponds to the nature of transactions of professional securities market participant and shall contain the risk monitoring system ensuring timely delivery of necessary information to the management bodies of professional securities market participant. Requirements for organisation of the risk management system by professional securities market participants shall be established by the Bank of Russia depending on the type of activity and nature of operations performed.....

...

"

i.e. the broker should have calculated all the risks associated with trading and not allow the risks to exceed the collateral funds...

Money is not securities.

[forexman77]

Dmitry Fedoseev:

Mm-hmm. One trade a second and that's for 38 minutes) That's him thinking at the speed of light.

[Aleksey Vyazmikin]

forexman77:
Money is not a security.

Is it a derivative instrument there, or do you think that they, like say futures and options, do not fall under this paragraph of the law?

[Alexey Volchanskiy]

forexman77:
Mm-hmm. One trade per second and that's for 38 minutes) That's what he's thinking at the speed of light.

Some kind of scalper drive was behind it, plus, as written here, on the exchange, one order is broken into many trades

[Aleksey Vyazmikin]

Went to the website of the broker in question

"

Quick access to margin loans and credit

With Alfa-Direct, an investor has access to low-interest securities loans (margin loans), securities loans (sales "without cover") to take profits in a "falling market" and securities loans for any purpose (with transfer to any bank on behalf of the client).

There is no need for the user of Alfa-Direct to pre-order the necessary resources (securities or money) from a broker to make "leveraged transactions". The decision to issue a margin loan or a securities loan is made automatically at the moment the client submits his order for a transaction and does not require any prior coordination with the broker. The Alfa-Direct client terminal itself informs the user of the maximum amount of credit (loan) that can be received at the moment.

"

But I wonder if this information was available until the person pressed the button, after which he received information in the terminal about the status of his commitments...

I can't find the maximum leverage by currency - for equities I get 0.8 - through repo, if I understand correctly...

But it is not clear about the swap - is it always negative? It would be logical to expect that a short on the ruble should give a positive swap...

Rates for maintaining uncovered foreign exchange positions (SWAP rates)*:
- on cash in Russian Roubles (% p.a.) -		19,8
- on US dollars (% p.a.) - 19.8		8
- on EUR (% p.a.) - 8		8

And here's another well-known bank broker writes about leverage like this:

"

• Margin lending is provided as part of the brokerage contract. You do not have to draw up any additional documents in order to get leverage. Once the brokerage service contract is signed, additional resources are raised automatically, immediately at the time of the transaction. You only need to monitor the market situation and margins, and react quickly to price movements.

"

i.e. you can't tell what kind of leverage you're getting so easily, but certainly not 1k7600 like the citizen in the story under discussion...