Misuse of security cheques

I was working with a share market company as a relationship manager wherein one client approached me to trade in stock market in his account with him . he was my neighbor also and he asked for security cheque from me to ensure that no loss should be occurred in his account. he invested Rs 10.00 lacs and also become company's subbrker for earning brokerage also.initially he got payout of 3.00 Lacs as brokerage but later on we loss the whole amount of 10.00 lacs in his account. now he is demanding money from me and misused the cheques and presenting in bank for Rs 16.00 lacs. he planning to serve legal notice .Please guide me : 1. as I did not received any cash from him ,even then can i be liable for any payment ? 2. no agreement was signed between us for the loss. 3. he already trade many times in stock market with other brokers before approaching me. 4. i only signed the blank cheque with no date on the same. 5.I Have all the statements of his trading account wherein he loss the money.