Religare Securities — unauthorised trading

Sub: Impose Ban on Religare Securities Ltd Immediately and investigate the fraudulent activities, Change of Client code, Criminal misappropriation, conspiracy and the organized crime that is being carried out by providing false / fake / forged documents (Contract notes /Order file / Trade file, Statement of holding etc.) to the investors

Trading member : - M/s Religare Securities Ltd., Plot No. A-3/4/5,
GYS Global, Sec. 125, Noida -201301 (U.P.)


1. We have been cheated by Religare securities limited accused company(s) in an organized, pre-planned and in a well conspired manner. The Managing Director, Directors, President, Regional Heads and the employees have been very actively engaged in connivance and collusion with the other staff members appointed by them through a net work of branches / offices established by them throughout the country in duping and defrauding as many people as they can, adopting the same modus operandi of carrying out illegal transactions without the instructions of its clients.

2. They get the customer’s blank signature on almost all the pages in Registration booklet containing 60-70 pages and by inserting certain addional pages viz- Authorisation for instructions by third person, Letter pursuant to Information technology act, 2000 etc. stating it to be mandatory requirements without stating the importance of that critical documents. Later, misuse the Authorization for instructions by third person by simply writing the third party name as per their wish. While opening the account they get the KYC filled and assign the F&O segment without ‘In person verification’ whereas failing in the responsibility to determine the customer's level o[censored]nderstanding of the securities markets and to disclose / assess the risk factors involved. It is the responsibility of Broker to Know your customer (KYC) before opening the account. Photo copy of KYC & agreements is never provided to clients so that they do not know what all they have signed.

After falling into the trap by providing the blank signatures on” Third party authorization” the client cannot get any relief from any court of law or arbiteration as the third party can do discretionary trading and can take any decision on clients behalf as per NSE (F&O) Regulation 4.5.3 Trading Principles, Clause (h) No Trading Member shall exercise any discretionary power in constituent’s account unless such constituent has given prior written authorization to a stated individual or individuals and the account has been accepted by the Trading Member, as evidenced in writing by the Trading Member. Now they are all set to do the trading in F&O as if they have discretionary authority. They take the blank sign on each and every page it can be seen by viewing original booklet where they get the sign on even page meant for NRI’s. Please note that sebi has already asked the brokers to stop providing e mail id’s and it is therefore illegal to ask to sign Letter pursuant to Information technology act, 2000 but Religare is continuously involved in this illegal activity.

3. They have also made certain clauses in additional Contracts / agreements (without SEBI’s approval) which in itself are violating SEBI rules and regulations eg- Contract between Religare and Client. Eg – Clause 7 Page 33. This clause is totally against and violates SEBI norms but they take the advantage of this clause at other judicial forums and influencing the Police department to curb the investors voice by stating the illegal agreement which is not in the knowledge of SEBI. Moreover, this is for your information that no other trading member has these kind of additional agreements. SEBI is either unaware about this or is silent and watching Lacks of innocent investors falling in the trap of Trading member.

4. SEBI should terminate all the previous agreements / Authorizations / Power of attorney / that have been done by the Religare Clients with immediate effect and fresh application form should be filled and provided to customer without violation of SEBI norms. Lacks of innocent investors have signed them and are waiting to become prey to the trap of Religare any day and they can not have any recourse also as Religare have taken blank signature on Authorization for instructions by third person for doing discretionary trading in the client’s account by hiding it on the backside of non relevant Customer profile sheet.

5. The accused company / Officials carried illegal transactions contrary to the instructions of the complainant thus, causing huge loss to the complainants. Act of trading member needs to be investigated for any/all of the activities of cheating, forgery, Client code modification, fraudulent activities, Criminal misappropriation, that is being carried out by providing false / fake / forged documents (Contract notes /Order file / Trade file, Margin statement, Statement of holding etc.) to the investors. The Accused violated NSE Bye Laws, Rules, Regulation, NSE F&O Trading Regulations-2005, SEBI (Stock Broker and Sub Broker ) Regulations, 1992 and SEBI (Prohibition of Fraudulent and Unfair trade practice relating to Securities Markets) Regulations, 2003, Securities Contract (Regulation) Act 1956. Being a trading member of Exchange and Registered Intermediaries of SEBI he is duty bound to follow Rules, Regulation and Bye Laws, during normal course of his business. I request the SEBI to look into the violations of various regulations, rules, Bye-laws of SEBI/NSE/NSDL.

6. Unauthorized Trading is becoming a regular practice by the trading member because they know how to take the advantage of the loop holes that still remain loosened by SEBI because of lack of enforcement of SEBI Guidelines in the arbitration / Judicial process. One Basic Rule that will sort our 80% of the cases o[censored]nauthorized trading is already passed by SEBI 3.2 Trade operation 3.2.1 (Trading Members shall ensure that appropriate confirmed order instructions are obtained from the constitutes before placement of an order on the system and shall keep relevant records or documents of the same and of completion or otherwise of these orders thereof. ) This can serve as the basis to check all the illegal trades executed on the terminal. Merely by producing misleading summary in the form of evening confirmations, stating that order placement recordings is not retrievable, it can not be taken as a proof of order placement by investor, the Trading member has to keep the records of order placement for at least 5-6 years else they should be made liable for the loss to the investor. To avoid these violations / deficiencies SEBI has already issued the Master circular to the Executive Directors / Managing Directors / Chief Executive Officers All Stock Exchanges/Clearing Corporations on 17 dec 2010. The arbitrators / Judiciary should be explained specifically about this clause so that it is not abused by the arbitrators / judiciary by overseeing it in the process of law. Proper enforcement of this clause by the trading members / Exchange / arbitration will redress 80% of the complaints o[censored]nauthorized trading complaints and should be ensured that it is not overseen under any circumstances in the process of law. It is observed that in only a select number of awards arbitrators have exercised this clause and awarded in favor of investor rest others oversee it or remain ignorant or silent about this.

7. Stock Exchange completely fails in its role in redressing the investor grievances. Investor Services Cell shows a ray of light that they will play an important role in redressing the investor grievances but plays a vital role in adding to the grievances by killing the time in arranging the meeting with broker and trying to portray that they are arranging the required documents / Information for investor and in the end shows the way to arbitration after successfully making client wait for months of time and showing inability that rest of documents will be arranged by the arbitrator. They dare not to take any action against the Trading member and it is on the mercy of the Trading member that what all information it wants to provide or not. To add further NSE too had failed in its regulatory responsibility / discharge of various obligations towards clients, as they themselves do not provide the certain information and gave a deaf ear to repeated requests and keeps it pending for months and never respond or write and have a valid reason to not respond to RTI’s as well.
It may also be noted that Exchanges failed to inspect the trading members as per “Master Circular on Oversight of Members” and quite surprisingly it was also overseen by Stock Exchanges (for the reasons best known to them) and no remedial, penal and disciplinary action was taken by Exchange to avoid these common violations / deficiencies as mentioned in Annexure and hence is directly/indirectly responsible for Deficiency in service and the loss occurred to the investor.

8. At every place the investors get cornered because Judges/ Retd. Judges / Arbitrators / Police understands the language of law and IPC but fail completely to understand SEBI Guidelines and Regulations. That is why the decisions / Awards are usually are not in favor of Victims and Trading members are able to take the advantage of the loop holes of the system. It is strange that even the arbitration department (deemed to be specializing in SEBI Byelaws/ regulations) decides keeping aside the basic SEBI Guidelines and Regulations in the scarcity of Knowledge. Investors pay the Arbitration Fee to exchange in anticipation that exchange will appoint arbitrators who have the relevant knowledge and expertise to deal with SEBI regulations and they will get justice but they fail to appreciate the existing SEBI Framework and usually make the award on the basis of assumptions and benefit of doubts. They come with a firm belief / mindset that the Trading members have a fool proof mechanism and the client is not investor but like a better who came to play in the market and after loosing money starts to complain. While the fact is that most of the clients are only investors and have never done F&O Trading in past or are ignorant about F&O. But arbitrators fail to even try to understand that an Investor cannot do such heavy F&O trades overnight and these trades are done to earn brokerage (churning) which any person with exposure in the market can tell. If the arbitrators are also not able to smell the foul play then, what is the expertise they have on the subject? Effort are made to educate the investor but it is equally important to equip the judicial process to know and understand SEBI Regulations so that the innocent investors may be rescued from the trap of Trading member and justice is done.
White collar Organized crime (comprising of highly technical subject of Stock market – Cash, F&O, commodity and SEBI Regulations) is a new subject in India and can not be simply dealt without providing SEBI Training workshops and practical knowledge to the Arbitrators / Judiciary.

9. The Trading members do have a panel of advocates who have a rich experience of dealing with SEBI byelaws, Regulations but the investors are not even provided that support. Sebi website talks about investor agency but are helpless and it should also provide the advocates with fair knowledge on subject which a common investor can hire / refer for services if required.

10. The Trading member has carried out major violations of SEBI / NSE / NSDL / MCX Guidelines and Stock Exchange has also violated the norms by not carrying out Inspections and taking remedial / penal /disciplinary action required on inspection findings as per the Master Circular (SEBI/MIRSD/Master Cir-04/201 0, March 17, 2010 ). It is important to mention that The Hon’ble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual Fund [2006] 68 SCL 216(SC) held that “once the violation of statutory regulations is established, imposition of penalty becomes sine qua non of violation and the intention of parties committing such violation becomes totally irrelevant. Once the contravention is established, then the penalty is to follow.”

11. Thus, It is clear that the Trading member is liable for monetary penalty under Section 15HA of the Act which states as under :-
Penalty for fraudulent and unfair trade practices. 15 HA. - “If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty-five crore rupees or three times the amount of profits made out of such practice, whichever is higher.

by Religare Securities Limited, is biggest cheat in the history of mankind. They have purchased Police, , EOW, NSE, Arbitration, SEBI also knows about it but every one is silent, even after producing evidences no-one is ready to take action against such big giant - white collar corporate criminal.
Can anyone Help OR every one has been purchased ?????

Sachin Bhardwaj
[protected]@yahoo.com