Need Help resolving conflict

#1
Hi,

My uncle used to do comodity trading by opening client account with MCX-NCDEX registred member.

He started account with 1.5 Lakhes. During high speculation time, member squared off his account and said he need to pay 11.5 Lakhes. Then he told them that he can't pay this much amount. So, member said pay around 2 lakhes and start trading again.
So, my uncle paid 2 lakhes to start trading again.

His member asked him to give an empty cheque, an empty pro note and empty paper with his signature for future trading in a new client membership.

That member used these empty documents, used pro note and wrote some body's name on it said he is i ndebt to him and stopped his bank account. Later he used signed blank check for amount 9.5 Lakhes and when check bounced he kept criminal frud case on him.

So, now he is fighting the case in court. It was purely mistake on my uncle part ot give blank documents. But, what he can do now to come out of this mess.

My question was, when my uncle has balance of 1.5 lakhes, whether member can allow him to trade till his debt reaches 11.5 lakhes. Is there some rule written some where saying member should not allow to trade client once his balance becomes some percentatge of -ve.

Any advice in this regard will be great help.

Regards
 

NOMINDTR

Well-Known Member
#2
Dear friend,

You said, the case is on trial.

I wonder why did not you people brought it to SEBI !!

Though it is a mistake of your uncle, let the court have trail. Consult people file a complaint against the trading member in SEBI whatever the consequence it would bring.

It is not a mere cheque fraud. More than that. Cheating an ignorant investor. Am I right?
 
#3
I am not sure but my uncle told that with in 6 months of square of the account, we can give complaint to SEBI. After blocking the account for trading, the process of asking 2 lakhes etc happened. After completing 6 months that guy put check in the bank and made it bounce. So, my uncle said as 6 months over he can't file complaint with SEBI.

IS there any where it is written in agreement that how much trading member should allow client to do according to balance in bank. i.e. in bank if client has 2 lakhe, till how much loss he can do business.
 

NOMINDTR

Well-Known Member
#4
I am not sure but my uncle told that with in 6 months of square of the account, we can give complaint to SEBI. After blocking the account for trading, the process of asking 2 lakhes etc happened. After completing 6 months that guy put check in the bank and made it bounce. So, my uncle said as 6 months over he can't file complaint with SEBI.

IS there any where it is written in agreement that how much trading member should allow client to do according to balance in bank. i.e. in bank if client has 2 lakhe, till how much loss he can do business.
The law says "Any dispute should be filed with in the period of six months" I remember.

But no trading member is allowed to lend money and to give exposure to clients. Trading member suppose to collect margin specified by exchange and should collect MTM on daily basis.

Check it. If you could prove your uncle has been giving undue leverage, then the trading member is in trouble.
 

hitesh

Active Member
#6
If it's comodity trading than I suppose SEBI will not come into picture at all.

To the best of my knowledge, Forward Markets Commission should be approached for any complain.

So far I know, unlike SEBI which is an independent body, the Forwards Markets Commission (FMC) is under the Department of Consumer Affairs (Ministry of Consumer Affairs, Food and Public Distribution).

I am not sure Law of limitation (within how much time complain can be lodged) with FMC.

Hitesh.
 

NOMINDTR

Well-Known Member
#7
If it's comodity trading than I suppose SEBI will not come into picture at all.

To the best of my knowledge, Forward Markets Commission should be approached for any complain.

So far I know, unlike SEBI which is an independent body, the Forwards Markets Commission (FMC) is under the Department of Consumer Affairs (Ministry of Consumer Affairs, Food and Public Distribution).

I am not sure Law of limitation (within how much time complain can be lodged) with FMC.

Hitesh.
Why don't you take a professional consultation Hitesh?
 
#8
in any case if an investor can question the broker he could get the thing solved.

There is a timeframe for raising a complaint.

Alll trades can be anyway verified at the exchange level.

In commodity trading there are cases where the broker squares off the lots on low margin. Many people are loosing money in this regard.
 

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