My broker has purchased .shares without my consent .now there is huge amount is due from me ,what to do?

Question

i.have trading account where in i got small portfolio.one day the broker short sold shares without my consent because market went up the deal could not be squared off.next to cover up losses he short sold more number of shares that day market went up and deal was not squared up.now there is payment due from me in account

Answer 1

have u sent this in writing to broker. If the deals shown in the contract note are not what u have ordered u are supposed to send a written intimation to him with 24 hours. the next step depends if u are in India. if so, send a letter to SEBI immediately and file a complaint with local police station against your broker for misusing your trading account. do it immedaitely with out any further delay, other wise the broker can take u to court for not making the payments due. if u are in some other country than India, the rules may be different, in that case consult a lawyer in your country.

Answer 2

Well, if you haven't talked to his supervisor, or contacted a lawyer, checking out the complain links at the Securities and Exchange Commission would be a fair place to begin: http://www.sec.gov/complaint.shtml

Be sure to check out the fine print on your contract, however, the broker may have some implicit authority that you didn't see, but contact the SEC anyway.

Answer 3

First of all, if he performed short sales on your securities, he needs your permission to do so,(usually this is written).If your portfolio is in a private account,(ie: NOT broker assisted) then you have recourse. It may be settled quietly in arbitration depending on the type of account you have.

Answer 4

Hi,

I assume you are somewhere in India.

You can do many things in this situation. First, don't pay even a single paisa of the loss you incurred due to his fault. If you pay, it  will mean that you agree to the trade done on your behalf.

Check whether you trade through a sub-broker or a main broker. If it is a sub-broker, talk to his main broker. And if it happens to be the branch of a main broker, you can talk to his supervisor at the head office.

They will try to drag the matter for long. And after you lose your patience, they will try to "settle" it. I mean, they will try to pay some less amount - mostly around 70% of the loss you incurred due to their fault. Instead, give them time limit when you expect to receive your dues. They will try to drag here also, saying that there are formalities to be done. But don't fall into their trap. If they don't solve it in reasonable time, lodge the complain in BSE/NSE, wherever your trade took place. They will provide for arbitration. (As far as my knowledge goes, the arbitrator doesn't hear you if you file complain after a reasonably long period after the trade. So, take decision fast, say, within 6 months, if you want to go for arbitration.) I am sure, you will get your dues.

All the best.

P.S.: Keep all your facts handy - Specially the contract notes of these trades, and earlier trades also.

Answer 5

Get legal advice asap this guy is going to strip you clean.

Answer 6

Don't pay any charges and loss amount....

And informed direct SEBI about it....

You can also give him a notice under consumer protection act.

Answer 7

get a lawyer mate.

Good luck :)

Answer 8

Dont pay the dues.

Make yourself clear with support of strong evidence, that u havent sent any consent over written or verbal media.

if nothing works mutually...File suite

Answer 9

I would also contact the headquarters of whichever firm he works for and lodge a complaint.  Also contact the federal trade commission to report the guy.  You may be able to report him to the police for theft, talk to the DA.

Answer 10

There appears to be a longstanding business relation with your broker.  Otherwise, without your consent and approval, no broker has got the courage to dispose your shares. Otherwise, you had given him a free hand to deal with your portfolio. Either your broker is trying to utilise your portfolio without your consent or you have not initiated a strong action against him.

There are two options available.  Go to BSE and lodge a complaint/grievance against the broker with all details and documentary evidence to prove that the transactions entered on behalf of you has not been approved and authorised by you. Secondly, Initiate legal proceedings (Both Civil and Criminal)for the recovery of your amount and under Cr Pc, a cheating and fraud case.

Answer 11

your question is not clear, when you broker has sold the shares and not squared up on that day.

Is that shares go for auction or delivered by the broker. in both the cases you will be in profit, because the market is down from the last 15 days.

Varify the content from the broker again before taking the action against them.

Answer 12

go to the site bseindia.com

where you will find section of complaining and suggestions.

also ask the broker of his registration number and file an complaint to bse. because these brokers are registered with bse.

Answer 13

Pinocchio, your nose is growing

Answer 14

Make sure you are on sound ground and you have all you facts correct, including time frames.

Write a letter, providing the details of your problem and address the letter to the Compliance officer of the firm with a copy of the letter to the supervisor of the Margin Department .

Send the letters to the firm using registered mail return receipt requested.

Once the letter is sent, call the margin department and advise them that you sent a letter documenting your problem.

The firm must respond to you in writing within a reasonable amount of time.   In the mean time do not send any money into your account.

If all the information is correct, the firm will cancel the trade in your account, and provide you with another broker.

If you get no response from the firm or you do not agree with their finding, make a copy of the letters you sent to the firm and send them along with a written comment to the local FINRA office and/or to the stock exchange (compliance & regulation department) if your firm is a member

Remember, everything to do MUST be in writing - no phone calls (other than above) and no e-mails

good luck

Some responder told you to get a lawyer of seek legal advice, if you are in the US, this advice is really bad, securities lawyers are very expensive and they will end up getting nothing done, regular lawyers are clueless and will only cost you money.

I spent 7 years working as a regulator in the US & Canada,  those people gave you bad advice

RABBITT if the firm is an exchange member, the exchange is the primary regulator and by SEC rules, the customer should go to the Exchange.  If the firm is not an Exchange member then the FINRA is the primary regulator There is no need to contact a lawyer since all claims, charges are to be handled by arbitration as per the new account agreement

Answer 15

First don't pay it. Take your matter to the authorities and file charges against him.