• My stock broker has done speculative trading in my account without informing to me

Hello, My stock broker(motilal oswal) has traded my account and incurred losses of 1.3 lakhs . How should I proceed to file case against him. Can I win and get my money back??
Asked 4 years ago in Business Law

First answer received in 10 minutes.

Lawyers are available now to answer your questions.

12 Answers

Hello,

You must have given the consent to motilal oswal for trading on your behalf.

If they have done the trading against your will or without your consent then you may go ahead and file a complaint before SEBI.

Also, at the time of appointing them as your trader you must have signed some agreement which must have given them the indemnity while doing the trading.

Kindly peruse the agreement also before filing the case.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

1) lodge complaint with SEBI against the broker for having carried out transactions without your approval

2) take the plea that no authorisation was given by you to carry on speculative trades

3) enclose copy of letter to the broker

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

What further details you want? Kindly tell me.

Thanks

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

1) if you have executed POA you have authorised broker to act on your behalf

2) your father should complain to SEBI against the broker

3) you can invoke the arbitration clause in your contract with the broker

4) dispute would be referred to arbitrator for his decision

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

Dear Client,

Stockbrokers have the duty to know their customers and to ensure that each recommended investment is suitable for that customer.

The broker by executing the transactions acts as an agent of the investor who is a principle. He is liable to account for all the transactions of the client on the exchange as a broker but when a broker executes a “Dabba Transactions” he acts as a principle with the investor. He becomes the counter party to the trade whereas he should be broker/agent who guarantees trade on the exchange on behalf of the investors. Thus, he can be held criminally liable within the meaning of Section 409 of India Penal Code.

As the broker with a malafide intent to cause loss to the investors and corresponding gain to himself commits:-

(i) Manipulation of Electronic Records

(ii) Alteration of client codes in computer resource to fabricate transactions

The broker can be prosecuted for the offence u/s 66 Information Technology Act, 2000.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Send a legal notice to Motilal Oswal, calling upon them to compensate you in lieu of the losses suffered by you on account of their act of indulging into speculative trading.

Vibhanshu Srivastava
Advocate, New Delhi
9426 Answers
245 Consultations

5.0 on 5.0

You have only one defense. Your father's incapacity to enter into any contract or agreement. He is either illiterate or of unsound mind. You will need certification and then only can you file a case since Power of Attorney does render him the right to take decision of the POA holder without consulting the assignor.

Debasmita Mitra
Advocate, Kolkata
33 Answers

4.0 on 5.0

You may do two things together one file FIR in the police under section 420 and 406 of IPC against the broker and inform the security and exchange control board of India along with the respective Stock Exchange where from the transection took place.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

Hi,

You may file the case against the broker because the agreement are so that it can't be read by a common man.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

If you have given a power of attorney to the stock broker, he might have used that option for this trading.

Have you confirmed that the broker did not have your permission for this trading which incurred you such a big loss, if so you may issue a legal demand notice and seek refund of the loss amount

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

This is your father's account.

if my guess is right your father would have had similar situations earlier too hence it wont be a new thing.

Hence before planning to initiate any legal action on this better consult and discuss with your father because any legal action out of ignorance of law will actually backfire and after the you may be in trouble.

You talk to the stock broker office manager about this ascertain the actual position and the reasons for this and then discuss with a lawyer for initiating legal action, if required.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

You can file a case. Take a defense that the benefit of old age/ less education has been taken by them and they being in dominant position forced to sign the documents.

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer