After finding some unauthorized trading and mismanagement in my trading account, I sent a message to the IIFL manager's official phone to stop taking any derivative exposure in my account. However, the manager executed trade again without my consent in any form and informed me only after the trade was executed. Although I was surprised why he did this and advised him to square off at the earliest opportunity, but could not dispute the the trade confirmation the next day. In next 5 days, the trade made huge losses and I was pressured to provide more margin to support the uncovered exposure or else my shares pledged with them would be sold. Everyday I am now monitoring and assisting them to square off my exposure to minimize the losses accumulated so far. I have now disputed the trade and readying with all information/evidence to claim the losses from IIFL. Question is, if disputing the transaction late would be an issue ? If providing margin money for the fear of loosing my stocks and assisting the broker to manage the exposure to minimize the losses would be regarded as consenting to the original trade, thus the claim for losses will be rejected.
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Lawyers are available now to answer your questions.
If unauthorised trade was done in your account you had rightly disputed the trade
2) you should have complained to stock exchange about unauthorised trade in your account
3)you should invoke the arbitration clause in the contract
4) you should take the plea that you were forced to provide margin as broker threatened to square off the transaction at loss
1) Need your MOU agreement that you have signed.
2) you are saying you didn't do this transaction and made by IIFL themselves, do you have proof that without your consent the transaction is made or have you given any standing orders authority to proceed transaction to IIFL.
3) If not than you can make first complaints to NSE/BSE and SEBI for false transaction.
4) Before they can sell your equity shares you should sent them a notice regarding not to sale shares.
2. Yes since even after unsolicited trade you made further trading with the broker you are deemed to have waived your legal right to redress your grievances, if any.
2. Now if you wish to challenge their actions further you will have to close the account first and then lodge complaint with SEBI.
3. If there is any arbitration clause then invoke such clause to adjudicate the dispute.
4.Alternatively file a case before the consumer forum seeking damages and compensation for trading without your specific instructions or ignoring specific instructions against trading further.
Arbitration or Appellate Arbitration awards for victims of fraudulent trading is highly dismal. It goes mostly in favor of the brokers. The broker client dispute may not fall within jurisdiction of consumer court, it can however be a case for civil court or even criminal court if fraud or deceptive practice can be proved. The biggest challenge is how to challenge the defendant saying that they informed me abut the unlawful trading, albeit after execution and why I did not shoot an email or call their dedicated customer line to dispute the trade. Why I let them to manage what they had done ? How to prove that I was scared that a correction of the trade at that time would have impacted my account with huge loss ? How to prove that I was in a position to be wrongfully influenced to accept what the rogue trader did ? I have asked for the transcript of the phone conversation as they are supposed to keep that evidence under SEBI law. I am engaged with them to recoup the loss to the possible extent because I can't let my stocks to be sold or loss to be widened while do not know what will be the outcome of the long litigation. It is like you can't let your sick child die by avoiding the hospital pending malpractice investigation brought against it by you.
You should invoke the arbitration clause in your contract
2) rely upon correspondence exchanged with broker
3) rely upon transcripts of phone conversation
1) Before placing order if there is no call or e-mail from your side than how can they place the order without your concern. They have to prove these facts in the court or else bear the losses or profit or take responsibility of that whole transaction.
2) Secondly your equity security should not be touch for this purpose.
Question is, if disputing the transaction late would be an issue ? If providing margin money for the fear of loosing my stocks and assisting the broker to manage the exposure to minimize the losses would be regarded as consenting to the original trade, thus the claim for losses will be rejected.
No doubt this may be taken as your consent and approval of the losses you incurred.
However you can issue a legal notice to the manager seeking his explanation to this debacle.
I am engaged with them to recoup the loss to the possible extent because I can't let my stocks to be sold or loss to be widened while do not know what will be the outcome of the long litigation. It is like you can't let your sick child die by avoiding the hospital pending malpractice investigation brought against it by you.
If you still continue to trade despite suffering losses, then you cannot blame the stock broker for the dismal performance of the stock market, you only have to undertake the responsibility.
If the broking company is doing the trading as per their will and wishe you may give stop instruction to them and also contemplate to issue a legal notice if there is a breach on this aspect.