[Resolved]  India Infoline Commodities Ltd. , — Business engaging in unfair, fradulant and deceptive trade practices

India Infoline Commodities Ltd., — unauthorized transactions in Commodities Trading account

Sir,
I have Commodity Trading Account with an Id: VENKDHAM in M/s India Infoline Commodities Ltd., at their Rajahmundry branch, having office address as: D No.6-6-10, 2nd floor, Above Bank of Maharastra, Vadrevu vari Street, T. Nagar, Rajahmundry, Andhra Pradesh.

During the period from dt.13.05.2006 to 19.06.2006, trading transactions were done without my consent in my trading account; and possess my hard-earned money to a tune of Rs.31, 216/- by deflating the balance in my account.

Repeated requests and reminders to sort out my grievance to the company’s management were turned unfruitful; and hence brought to your kind notice.
Please help me out in this regard
Thanks & Regards

G.V.Ramana
Mobile :[protected].

My case o[censored]nauthorized trading is a novel example of rampant misuse of loopholes of the security market. Inspite of my written instructions with the deposit in advance, to purchase blue chip shares on market correction, the surplus funds I had deposited in our account to purchase shares were misused without our knowledge to trade to the extent of 59 crores just to generate brokerage for the company ( India Infoline Ltd.) to the extent of Rs 2, 66, 330 and delayed paying charges of Rs. 33, 072 i.e. the company earned a brokerage of Rs. 3 lakhs from these two accounts in a period of 2 months.
The MODUS OPERANDI of doing unauthorized trading is by pressuring the relationship manager to generate brokerage 4 times their salary or else they are threatened that they will be sacked from their job. Here the broker company earns huge brokerage and in most cases gets away with the crime as in most cases instructions given are oral by unsuspecting, gullible investors and thus later very difficult to prove the cheating infront of judicial forum. Here in the company also helps the RM by not giving any documents or contract notes to the client of the trades done. Thus the client is unaware of the transactions done in his account. Also after discovery of these unauthorized trades by the investor, the company immediately suspends the RM but hold back his salary to force him to good the losses.The broker company to further trap the customer convinces him that ‘ The RM was bad, and if one RM is bad, the entire company does not become bad. We will pay back your losses as it is a meagre amount for the company and also help you to recover the losses from the market by our “expert tips reserved for the management”. They thus urge the customer to trade which they do with concealed ulterior motive of misleading the judicial forum later by showing the exact debits cleared by the authorized trades done afterwards, that the customer was also aware of the earlier unauthorised trades.
So NSE should educate investors once such unauthorized trades are discovered by an investor he should not to do any transactions afterwards in his account.
As many such cases are reported to NSE, done by trading member to increase their turn over, NSE has started the Investor education advertisements in newspaper advising 1 ) not to give e-mail id if not in use.
2 ) not to power of attorney.
3 ) not yo give surplus fund in Account.
Brokers are misusing the power of attorney to trade illegally in customer account and sell of shares from their demat account to cover the resultant losses and finally earning a decent commission for the relationship manager and the Branch Manager.
Inspite of my repeated complaints SEBI, no action has been taken against India infoline Ltd.( I.I.Ltd. ).
Many such cheated investors of I.I.Ltd. and other broking companies will definitely surface to highlight this grave loophole in our capital market.