Real Face of NSEL Brokers

Since NSEL crisis came to light there has been series of events where, FTIL the parent company of NSEL is questioned. The defaulters and brokers are sidelined when the money trail of the defaulting amount of 5600 Cr. is traced to the defaulters. Since 2013 when the crisis came to knowledge there has been a needle of doubt on brokers as they fraudulently used details of investors for NSEL platform.

Securities and Exchange Board of India (SEBI) the market regulator has launched a probe against brokers for the act of selling goods with assured returns of 16% and misleading the investors. This is altogether new turn into the NSEL proceedings as this probe has fresh evidences against brokers. According to the sources there are six leading brokers involved.

Accounts of brokers that sold NSEL schemes are also being investigated. It is suspected that these brokers conducted selling of products of NSEL with promise of assured returns. There is also possibility of involment of black money diverted to sister concerns. Apart from SEBI, a high-level committee constituted by the Bombay High Court and other probe agencies are also investigating the matter. 

It is stated that the committee as also other regulators and investigative agencies have found major differences in the data and details submitted by various investors as part of their claims, as against the data submitted by NSEL. These discrepancies include submission of wrong PANs (Permanent Account Numbers), raising doubt about source of funds, while authorisation letters and trade execution documents submitted by brokers have also been questioned. There are also cases of some brokers that they created fake ledger accounts in the name of their clients without their knowledge, sources said. Complaints against brokers include false assurances, enticement and falsification by brokers, trading without right authority from clients, misuse or unauthorised modification of unique client code, funding by NBFCs related to the broker and non-receipt of payouts by clients.