Mumbai Securities Brokerage Dupes Clients; senior management caught

0

A securities brokerage firm in Vile Parle, Mumbai, called ‘Artha Vriddhi Securities’ recently found itself in hot waters after being at the center of a massive financial scam; unearthed by Sunil Giri of Blue Sea International. The senior management of the fraudulent securities brokerage firm, including the director, Sunil Jain; and the owners, Dhiren Shukla and Sunil Jain, were arrested on 23rd July 2022.

The company has been involved in defrauding a number of investors over the past few years of over Rs 10 crore. A business consultant associated with the company, Jairaj Bafna, is on the run. The funds and shares of 800 investors are blocked because their trading terminals were blocked by NSE.

What Artha Vriddhi Securities used to do was to open the trading accounts of the relatives of the directors of the same company and do the reverse transactions of the clients and transfer the profits to the accounts of their relatives. Reverse trading was done mostly in the F&O section. The company was found guilty of unauthorized transactions on clients’ accounts, providing them with falsified, altered and deliberately misleading statements; and the failure to provide personalized trading platforms promised as an enticement when opening trading accounts.

The manager, Sunil Jain, and the business consultant, Jairaj Bafna, embezzled about Rs 9.6 crore from the accounts of their relatives through reverse transactions and unauthorized transactions and thus embezzled the funds.

Blue Sea International had received around 300 emails with attachments containing profit and loss statements with full details of the date of the trades. On checking the same with the NSE, it was discovered that all the transactions were shockingly completely fake and in fact some other transactions were executed without being informed by Blue Sea International.

The NSE Grievance Redress Committee conducted elaborate procedures and audited books of accounts; and investigations revealed that client funds were indeed misappropriated and diverted to the accounts of the administrators’ relatives. NSE GRC has admitted/calculated the amount of the claim for the loss caused to Sunil Giri, the plaintiff, at Rs. 1,54,00,000. (Order of November 8, 2021)

Shares held in clients’ demat accounts were sold without informing the clients and presented as a loss to them and a number of unauthorized transactions were carried out in the accounts of various clients. When customers approached Sunil Jain, the manager, for clarification and refunds, he abused and threatened them; and arrogantly dared them to go the legal way. At present, there are around 15 complaints to the NSE for fraud against this company.

Vile Parle Police had filed an FIR against the now arrested manager and owners and the fugitive business consultant on July 21, 2022.

Many investors lost their life savings and the main culprits, Sunil Jain and Jairaj Bafna, now operate through another brokerage firm owned by Sunil Jain’s relatives. The accounts of Ritesh Jain (cousin of Sunil Jain), Urvi Milan Shah (parent of Sunil Jain), Ruchita Bafna (sister of Jairaj Bafna) were all used to receive funds from ill-gotten investors.

While checking the bank statements, it was discovered that there were clear signs of back and forth of funds between the administrators’ and relatives’ accounts. Further investigation into the matter will reveal how illicitly acquired wealth was laundered and its subsequent stratification took place.

Share.

About Author

Comments are closed.