Brokerage firms played
a major role in the Rs.5600crore National Spot Exchange Limited (NSEL) payment
crisis. Investigation agencies have been investigating brokers over cases filed
against them. Trading clients in the case had earlier filed recovery suits
against brokers alleging that they were involved in various fraudulent activities
in regards to trading on NSEL platform.
On July 2013 the NSEL
crisis came to light. Since then matter is investigated by many agencies.
Exchange was forced to suspend all its trading contracts. Trading clients have
filed separate cases against top five leading brokerages. Suits are filed in
over brokers for mis-selling and wooing them to invest in agri commodities.
Economic Offences Wing
(EOW) of Mumbai police had arrested officials of some commodity brokerage firms
on charges of inducement and mis-selling of NSEL products in the past.
Enforcement Directorate (ED) is also interrogating the top officials of broking
firms to ascertain their role in the case. Evidently, some brokers had high
exposure in the NSEL case. Among them were Anand Rathi (Rs.629crore), India
Infoline Commodities (Rs.326crore) and MotilalOswal Commodities (Rs.263crore).
Other broking firms with explore in NSEL are Phillip Commodities (Rs.140crore),
Geofin Comtrade (Rs.313crore) and Systematix Commodities Services
(Rs.277crore).
SEBI has also launched
probe against leading brokerages into alleged mis-selling of products with the
promise of assured returns from commodities traded on the NSEL. SEBI is also
investigating brokers over various complaints including false assurances,
inducements and misrepresentation, trading without appropriate authority from
clients, misuse or unauthorized modification of unique client code, funding by
NBFCs related to the brokers and non-receipt of payouts by clients.
Recovery suits against
AnandRathi, India Infoline Commodities, MotilalOswal Commodities and Phillip
Commodities are filed by trading clients in Bombay High Court. These six
trading clients have put their hope in the legal system and investigating
agencies; we can hope that they receive justice in least possible time, thus
ending their long awaited suffering.
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