Trading done by Bonanza Portfolio without customers knowledge

[vickrampurswani]

Hi,
This is for my friend who is a customer of Bonanza Portfolio Ltd.
My friend normally used to call the Bonanza executive to instruct him to do trading. And he used to tell what needs to buy or sell. For some reason my friend was away from his email for 1 months time and one day when he checked it, he found that Bonanza were doing trading on his behalf without his knowledge or permission.
He complained to NSE and there Bonanza is saying that since customer did not object within 24 hours , he can not say that he had objection.
My friend suffered loss of 300000 because of this. Now he is thinking of going for Arbitration against Bonanza.

I need your suggestion on what should be done.
Is checking email is necessary for clients?
Customer has to give in writing to the Broker to NOT trade for a period of time? (I think this is obvious that if not instructed no trading shud be done)

What legally can be done?

 

[gulshanranjan]

Your frnd can sue broking house to recover the losses. i belive, its not the broking house but the RM/Dealer who wil be held responsible. i belive he has not given any poa to his rm/dealer to execute trades on behalf of him, if given , then nothing can be done.

Better ask your frnd to go & meet branch head in personal with a written complaint & send a email also & ask for acknowledgment.

I understand ur frnd pain,
Hope he get his money back soon.

 

[vickrampurswani]

Your frnd can sue broking house to recover the losses. i belive, its not the broking house but the RM/Dealer who wil be held responsible. i belive he has not given any poa to his rm/dealer to execute trades on behalf of him, if given , then nothing can be done.

Better ask your frnd to go & meet branch head in personal with a written complaint & send a email also & ask for acknowledgment.

I understand ur frnd pain,
Hope he get his money back soon.

But as far as I know there was no one in between my friend and Bonanza Portfolio. And there were long discussions with them. Infact when called by NSE officials, the Bonanza Regional Manager came to represent them and when she was arguing about not checking the mail , the NSE official objected saying CLIENT IS NOT SUPPOSED TO CHECK HIS MAILS EVERYDAY. This gave ray of hope to my friend, but we want to know what is that can be done legally. Bonanza also offered my friend for settlement but they want to settle only 40000 and not 300,000. My friend believes that either win or lose doesnt matter, but since Bonanza breached the trust that he had in them, he wants to take legal action to teach them a lesson

 

[hitesh]

But as far as I know there was no one in between my friend and Bonanza Portfolio. And there were long discussions with them. Infact when called by NSE officials, the Bonanza Regional Manager came to represent them and when she was arguing about not checking the mail , the NSE official objected saying CLIENT IS NOT SUPPOSED TO CHECK HIS MAILS EVERYDAY. This gave ray of hope to my friend, but we want to know what is that can be done legally. Bonanza also offered my friend for settlement but they want to settle only 40000 and not 300,000. My friend believes that either win or lose doesnt matter, but since Bonanza breached the trust that he had in them, he wants to take legal action to teach them a lesson

Whether your friend had given a MANDATE to the broking firm to issue contracts in Digital Form ? That is to say thru email?

If yes, than broker is justified in sending contract notes thru email.

However, if your friend has not authorised broker to send electronic credit note, than you have a sound case.

Please go thru the following arbitration case (somewhat similiar to your case), which will give you some clue.

http://www.nseindia.com/content/assist/arbitration/arb_CM_C_0016_2010.pdf

 

[tejvish]

could you pls tell which branch/city.

 

[vickrampurswani]

could you pls tell which branch/city.

He operated from Indore not sure but I think there would be only one branch in Indore.

 

[vickrampurswani]

Whether your friend had given a MANDATE to the broking firm to issue contracts in Digital Form ? That is to say thru email?

If yes, than broker is justified in sending contract notes thru email.

However, if your friend has not authorised broker to send electronic credit note, than you have a sound case.

Please go thru the following arbitration case (somewhat similiar to your case), which will give you some clue.

http://www.nseindia.com/content/assist/arbitration/arb_CM_C_0016_2010.pdf

Hitesh, we are absolutely fine with broker sending the digital contract note. Here the point is that how can the broker trade without the customer's permission. I mean my friend would definitely check his mails if he has instructed the brokerage firm for any trading on any day. But just because we have a trading account with Bonanza means we have to check mails everyday just to see if Bonanza is not doing any trading to generate there commission? I mean isn't it obvious that unless the customer instructs broker should not trade?

It would be nice if you can tell me what is the clause as I am not very much aware about the rights of the brokerage firm in this case but I raised the point by my basic understanding that if I am keeping money with someone doesnt mean that he can do whatever they want without my instructions.

Just to tell you I went thru several arbitration documents on the internet against Bonanza and in all the cases they tried to save themselves and in most cases were successfull saying that Applicant did not object in 6 months. However in my friends case we reported to NSE in 2 months when my friend came to know about this. I think Bonanza wouldnt have used excuse of 6 months if they have a valid point of customer not objecting within 24hours. Please shed some light if possible as this would help many more people going in that direction

 

[alroyraj]

Actually for trades taken by phone, the broker is supposed to maintain voice transcipts of every order taken by the client to prevent fraud. Many brokers do this including Indiabulls, geojit. Even if the PoA is given records of tardes have to be maintained.

 

[vickrampurswani]

Whether your friend had given a MANDATE to the broking firm to issue contracts in Digital Form ? That is to say thru email?

If yes, than broker is justified in sending contract notes thru email.

However, if your friend has not authorised broker to send electronic credit note, than you have a sound case.

Please go thru the following arbitration case (somewhat similiar to your case), which will give you some clue.

http://www.nseindia.com/content/assist/arbitration/arb_CM_C_0016_2010.pdf

Even if the mandate has been given still do they have rights to Trade on behalf of my friend without his instructions? I mean no need of calls from my friend to use his money? I am not aware about their rights so asking you. In any case we will be going for Arbitration but want to know if anything else can be done. Is it like if we take an account with broker like Bonanza we have to check everyday that they shud not do any trades? Isnt it obvious to wait for clients instructions?

 

[getsatendra]

Guys,

I badly need your help. I have been fighting with Bonanza for last 2 months ever since I came to know about the loss of 2 lacs from my account. The company is not only trying to give clean chit to the two of their employees (who have confessed role) but also they haven't yet given me the contract note or power of attorney going thru which I wud know of their authorities. They have made trading into Future- options etc and thus reducing my balance to nil.

Kindly inform me how to take up the issue with NSE. any contact numbers? do i need to visit them or send a letter by post or email?

Plssss guys help me on where to take up this matter for justice?? I am planning to approach consumer court and Civil court.