Nearly 30 Indian investors have reported losses over ₹100 crore in a suspected trading scam involving Stockal Securities, a fintech platform based in Bengaluru. The investors claim their US stock holdings were sold without authorization on October 15, according to a report by Moneycontrol. The proceeds from these unauthorized sales were allegedly used to buy large amounts of thinly traded Chinese stocks.
Key Details
Affected investors said their portfolios included major US companies like Apple, Tesla, and Amazon. One investor, a senior official at a well-known Indian beverage company, said shares worth $335,768 were sold without his consent. This resulted in personal losses of about $450,000, or roughly ₹4.26 crore. He pointed out that there were no individual trade confirmations or warnings for the significant liquidation and purchases, raising concerns about the platform's operational controls.
Legal experts suggest that investors may seek compensation under the Indian Information Technology Act. They may also pursue criminal action against Stockal under relevant laws. Experts emphasized that SEBI-registered intermediaries like Stockal must follow strict rules regarding investor protection and cybersecurity. If unauthorized trades result from failures in these obligations, the intermediary could face regulatory scrutiny and civil liability.
Background
In response to the allegations, DriveWealth LLC, which executes trades for Stockal, denied any involvement in the unauthorized transactions. The firm stated that it does not have a customer-facing application for trade placement. DriveWealth also confirmed that its systems and client data were not compromised during the incident.
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This situation may lead to increased scrutiny of fintech platforms and their compliance with regulatory standards. It could also affect investor confidence in cross-border trading. Investors will be watching for regulatory actions or statements from SEBI regarding the incident and its implications for investor protection.
Based on reporting by: livemint.com, moneycontrol.com