MUMBAI: A 72-year-old man from Matunga West has alleged that he lost Rs35 crore ($3,910,060 USD) after a Mumbai-based brokerage firm carried out unauthorised trading in his and his wife’s accounts over a four-year period.
Bharat Harakchand Shah, who runs a low-cost guest house for cancer patients in Parel, inherited a large share portfolio from his father in 1984. With little knowledge of the stock market, the couple had never actively traded until 2020, when a friend advised Shah to open trading and Demat accounts with Globe Capital Market Limited.
According to Shah, the company’s representatives assured him that trading could be done safely using his inherited shares as collateral, with no additional investment required.
Two employees assigned as “personal guides” identified as Akshay Baria and Karan Siroya soon took full control of the couple’s accounts. They allegedly placed orders, initiated trades and even visited Shah’s home, guiding him through emails, OTPs, and verification messages while withholding key information.
Between March 2020 and June 2024, the annual statements emailed to Shah consistently showed profits, giving him no reason to suspect wrongdoing.
However, the alleged fraud surfaced in July 2024 when Globe Capital’s Risk Management Department informed him that both accounts had accumulated a debit balance of Rs35 crore and demanded immediate payment.
Shah says he was then told that massive unauthorised trades including circular trading had been conducted, leading to heavy losses. Under pressure and fearing the loss of his remaining assets, he sold his remaining shares and settled the full amount before transferring his leftover holdings to another firm.
The truth became clear only after Shah downloaded the full trading statements from Globe’s website and found major discrepancies compared to the profit statements emailed to him earlier. He also learned that the National Stock Exchange (NSE) had issued notices in his name, none of which were ever disclosed to him.
Calling it an “organised financial fraud,” Shah filed a police complaint with Vanrai police station. The case, registered under IPC Sections 409 (Criminal Breach of Trust) and 420 (Cheating), has been transferred to the Mumbai Police Economic Offences Wing (EOW) for further investigation.
🔍 HackWarn.com Analysis
Why This Scam Succeeded
1. Complete Trust in “Personal Guides”
Scammers posed as trained financial advisors and gained full access to Shah’s accounts. Older individuals, especially those lacking investment knowledge, are more vulnerable to this kind of manipulation.
2. Fake Profit Statements
For four years, the brokerage allegedly sent fabricated “profit reports,” creating a false sense of security while hiding real losses.
3. Long-Term Psychological Control
Daily calls, home visits and constant guidance conditioned the victim to follow instructions including entering OTPs and approving emails without question.
4. Lack of Transparency and Oversight
The victim did not access original statements from the company portal until years later. The scammers exploited this gap to conceal unauthorised trades.
5. Technical Complexity
Trading statements, market notices and circular trading patterns can be confusing for ordinary investors. Fraudsters use this complexity to commit misconduct undetected.
🚨 Immediate Action Steps (For Investors Worldwide)
1. Always Access and Verify Official Statements
Download statements directly from:
- Broker’s official portal
- Stock exchange platform (NSE/BSE)
- Your bank or investment bank
Never rely on emailed reports alone.
2. Never Share OTPs, PINs, or Login Credentials
No legitimate broker or advisor needs:
- Your OTP
- Your login password
- Your bank authentication codes
If anyone asks, it is a red flag.
3. Review Your Account Regularly
Check:
- Trading activity
- Holdings
- Profit & loss
- Margin usage
Unexplained trades must be reported immediately.
4. Report Suspicious Activity EarlyNotify:
- Your brokerage’s compliance department
- The stock exchange (NSE/BSE)
- Your country’s securities regulator
- Local police or cybercrime authorities
Early reporting can stop losses and preserve evidence.
5. Use Reputed, Regulated Brokers Only
Before opening an account, verify the broker’s license with:
- SEBI (India)
- SEC (US)
- FCA (UK)
- ASIC (Australia)
- MAS (Singapore)
- HK SFC (Hong Kong)
6. Educate Older Family Members
Elderly people are frequent targets. Ensure they understand:
- Never approve OTPs blindly
- Never allow remote access
- Never trust unverified “portfolio managers”
7. Keep Original Records Always save:
- Contract notes
- Ledger statements
- Demat statements
- SMS alerts from exchanges
These documents are crucial in proving fraud.
