Mumbai Senior Citizen Cheated of Rs 35 Crore in Elaborate Stock Market Fraud
A 72-year-old man running a guest house for cancer patients in Parel has become the victim of a massive financial fraud amounting to Rs 35 crore, allegedly perpetrated by a well-known stockbroking company and its officials through unauthorized trades in his demat accounts.
The Vanrai police have registered a formal First Information Report (FIR) against the share broking firm and its representatives for cheating the elderly couple by abusing their trust, manipulating trades, and misusing their investment accounts. The case has now been transferred to the Economic Offences Wing for further investigation.
The Inheritance That Turned Into a Nightmare
Bharat Shah, a resident of Matunga, revealed in his complaint that he and his wife had inherited a substantial portfolio of shares following his father's death in 1984. Having no experience in stock trading, the couple decided to open demat and trading accounts with the share broking firm in 2020 based on a friend's recommendation.
They transferred their entire inherited share portfolio to the broker, placing their complete trust in the company's expertise and reputation in the financial markets.
How the Alleged Fraud Unfolded
According to Shah's complaint, the company assigned representatives who acted as their "personal guides" for all trading activities. These representatives maintained regular contact with Shah, directing his trading decisions and handling all critical security elements including OTPs, emails, and confirmations sent by both the broker and the National Stock Exchange (NSE).
Believing the transactions to be professional and secure, Shah allowed the company's staff to operate his accounts freely. He even permitted them to access his personal laptop to send emails on his behalf, demonstrating the level of trust he had placed in the brokerage firm.
The Shocking Discovery and Aftermath
The truth emerged in July 2024 when Shah received an unexpected call from the firm's risk management department. He was informed that both his and his wife's accounts reflected a staggering debit balance of Rs 35 crore.
The company warned that they would liquidate the pledged shares if the massive dues were not cleared immediately. Faced with this ultimatum, Shah took the difficult decision to sell shares worth Rs 35 crore himself to clear the debit amount.
He subsequently transferred the remaining securities to another depository account to prevent further damage to his financial portfolio.
Uncovering the Discrepancies
When Shah carefully reviewed the annual statements emailed by the broker and compared them with statements downloaded directly from the company's official website, he discovered major discrepancies that revealed the alleged fraud.
Shah alleged that the emailed statements contained "false and fabricated figures" that showed profits instead of the actual losses incurred through the unauthorized trading activities conducted in his accounts.
The case highlights the vulnerabilities faced by elderly investors in complex financial markets and underscores the importance of vigilant monitoring of investment accounts, even when dealing with reputed financial institutions.
