Aug 26 2024, 17:19
Defrauded Investors Urge Authorities to Act Against NSEL Brokers
Thousands of Investors Still Waiting for Justice Years After NSEL CrisisNew Delhi,
Thousands of investors who lost their hard-earned money due to the fallout of the National Spot Exchange Limited (NSEL) crisis are still waiting for justice and the return of their funds. Their prolonged wait is eroding trust in the system. The crisis, which began over a decade ago, involved brokers misleading investors with false promises of safe and assured returns, leaving them in financial turmoil. Despite clear court directives and the stringent provisions of the MPID Act, many brokers have yet to face the necessary legal action, and justice continues to be delayed.
The National Spot Exchange Limited (NSEL) case stems from a payment default that occurred in 2013. The crisis was triggered when the Forward Markets Commission (FMC), the commodities market regulator, directed NSEL to halt the launch of new contracts, leading to the abrupt closure of the Exchange in July 2013. This event marked the beginning of a major financial crisis, leaving thousands of investors facing significant losses and sparking ongoing legal battles to recover the funds.
The NSEL provided a platform for buyers and sellers to trade in commodities, involving clients, traders, and investors registered through their respective brokers. These brokers, in turn, were registered on the NSEL exchange. However, investigations have revealed that brokers exploited this system, engaging in fraudulent activities that defrauded thousands of investors.
The investigation uncovered several key findings that highlight the fraudulent activities of the brokers involved in the NSEL crisis. Brokers took Power of Attorney from their clients and executed trades on the NSEL on their behalf. They misrepresented NSEL contracts as fixed return products, luring traders into investments with promises of risk-free returns. Furthermore, brokers funded their clients beyond their repayment capacity and conducted trades without proper authority, sometimes using clients' names and PAN details for benami transactions. To conceal these illicit activities, brokers also engaged in rampant client code modifications.
Courts have ruled that brokers are to be considered as financial institutions under the Maharashtra Protection of Interest of Depositors (MPID) Act. The Court also upheld the attachment of assets, including bank accounts and properties, under this Act. This decision reinforces the legal framework aimed at protecting investors' interests and recovering their lost funds, providing renewed hope for justice to the thousands of affected investors. However, authorities have yet to take the necessary actions to implement this ruling effectively.
In March 2015, the Economic Offences Wing (EOW) of Mumbai Police arrested directors of three major brokerage firms. By December 2018, these brokers and their directors were charge-sheeted under various charges, including being declared Financial Establishments under the MPID Act. In December 2022, the EOW filed a final charge sheet against 16 additional brokers and their directors.
Despite these actions, significant delays in attaching the brokers' assets have frustrated investors. The MPID Act allows for the attachment of properties of entities declared as Financial Establishments to protect depositors' interests. However, the assets of brokers who accepted deposits from investors and failed to repay them remain largely unattached.
In May 2023, the MPID Court ordered the attachment of properties belonging to one prominent broker. However, authorities have only attached a fraction of the required assets. The High Court upheld the MPID Court's directive, emphasizing that inaction should not hinder the attachment process.
Investors, frustrated by the lack of progress, have taken legal action to expedite the attachment of assets. An application filed by an investor led to a court hearing where the Competent Authority confirmed that brokers had induced investors with false promises of guaranteed returns. The court ordered the attachment of properties, but significant progress is still lacking.
Public Outcry and Social Media Campaign:
The ongoing delays and perceived favoritism towards certain brokers have sparked a public outcry. A social media campaign under the hashtag #ActAgainstNSELBrokers has gained momentum, demanding swift justice and accountability. Prominent figures and social media influencers have joined the call for justice, amplifying the voices of affected investors.
Thousands of investors are still waiting for justice years after the NSEL crisis. They were promised safe returns by their brokers but are left empty-handed.
The NSEL crisis has left a lasting impact on investor confidence and financial stability. As the call for justice grows louder, it is imperative for the concerned authorities to act promptly. Investors are demanding that the government attach the assets of all brokers involved, ensure accountability, and restore public faith in the financial system.
---------- Ends
Khabar kolkata:The journey of Bishop Canning-Artage Sports Academy began with a function at St. Thomas’ Boys’ School, Kidderpore on Thursday. On that occasion, two former footballers of Mohun Bagan and East Bengal were seen on the same stage. Apart from Bishop Canning, Mohun Bagan's former footballer Jose Ramirez Barretto, East Bengal's former footballer Douglas Da Silva, Kolkata Municipal Council Mayor (Sports) Debashis Kumar, Eastern Railway Chief Public Relations Officer Kaushik Mitra, St. Thomas’ Boys’ School Principal Suman Biswas and others. Jaydeep Mukherjee was on stage from Artage Sports.
Pic: Prasenjit Biswas.
Sep 07 2024, 11:31
- Whatsapp
- Facebook
- Linkedin
- Google Plus
1- Whatsapp
- Facebook
- Linkedin
- Google Plus
2.0k