Most investors accept losses as part of trading. What they don’t accept is waking up to discover that their shares were liquidated without prior consent, and later being told that “margin rules” justified everything.
That is where disputes begin between Dealmoney Commodities and one of its clients.
In a long-running investor complaint involving Dealmoney Commodities Pvt. Ltd., the issue was not market volatility or bad trades. The issue was who authorized the liquidation, whether SEBI rules were followed, and whether a broker can escape responsibility by blaming its authorized person.
An NSE Appellate Arbitration Award dated 04 October 2024 provides rare clarity on these questions.
Dealmoney Commodities User Complaint
The investor, Abhishek Sethi, alleged that:
- His shares were liquidated without prior consent
- No pre-trade confirmation was taken.
- Losses occurred due to the actions of the broker’s authorized person.
- SEBI rules on unauthorized trades were violated
The broker, Dealmoney Commodities, argued that:
- The trading was handled by Raah Financial, an authorized person
- Any separate agreement between the investor and Raah was not binding on the broker.
- Margin shortfall justified liquidation
- Post-trade confirmations were sufficient.
This dispute moved through every level of the regulatory pipeline, exchange grievance, arbitration, High Court, and appellate arbitration.
Here is what actually happened and where it ended:
- July 2017 – Trading account opened through Raah Financial, an authorized person of Dealmoney
- 2017-2018 – Trading conducted under a portfolio arrangement called Asset Pays Money (APM)
- Liquidation Event – Investors’ exposed shares were squared off
- Investor Complaint – Filed before NSE alleging unauthorized liquidation
- IGRP Order – Investor’s claim of ₹70 lakh allowed
- Bombay High Court – Directed arbitration; ₹70 lakh deposited with the Court.
- Arbitration Award (07 May 2024) – Majority arbitrators upheld the IGRP order
- Appellate Arbitration Award (04 Oct 2024) – Appeal dismissed; investor allowed withdrawal with interest
Arbitrator’s Findings
Based on certain evidence and findings, here is what was disclosed:
1. Authorized Person Status Was Undisputed
Dealmoney itself admitted that Raah Financial was its authorized person.
Documents on record showed Raah managing the investor’s portfolio within the investor’s demat account held with Dealmoney.
This point alone closed the door on distancing arguments.
2. Broker Liability Cannot Be Outsourced
The tribunal relied on SEBI’s Authorized Person framework, which clearly states:
- Acts of omission and commission of an authorized person are deemed acts of the stockbroker
- The broker remains responsible even if the authorized person exceeds authority.
The finding was unambiguous:
Dealmoney was vicariously liable for Raah’s actions.
3. Pre-Trade Confirmation Was Mandatory and Missing
As per SEBI, brokers need to retain evidence of client authorization before executing trades.
Accepted evidence includes:
- Signed written instructions
- Call recordings
- Emails
- Internet transaction logs
- SMS records
The burden of proof lies entirely on the broker.
In this case:
- No pre-trade confirmation was produced
- Post-trade SMS/email confirmations were held insufficient
4. Liquidation Without Consent Was Established
The tribunal concluded that:
- Shares were liquidated without prior consent
- SEBI rules were not followed
- The investor suffered a loss as a direct result
Final Outcome of the Case
- The appeal raised by the broker was dismissed
- The arbitration award dated 07 May 2024 confirmed
- The investor is allowed to withdraw ₹70 lakh plus accrued interest.
- Amount to be withdrawn from the deposit held with the Bombay High Court
This was not a technical win. It was a substantive finding on unauthorized liquidation and broker accountability.
Why This Case Matters to Other Investors
This award clarifies several points that are often misunderstood:
- “Authorized person” actions do not shield the broker
- Post-trade confirmations do not cure unauthorized trades.
- Margin shortfall does not override SEBI’s authorization rules.
- Investors can succeed if the evidence and process are followed correctly
Many complaints fail not because the investor is wrong, but because the process is mishandled.
What You Can Do in Such Cases?
If you suspect unauthorized trading or liquidation, follow this order strictly.
Step 1: File a Complaint Against a Stockbroker
- Email the broker’s grievance/compliance desk
- Clearly state:
- Trades or liquidation are disputed.
- Dates, quantities, and scripts
- That authorization was not given.
- Ask specifically for:
- Pre-trade confirmation records
- Call recordings
- Dealer/order logs
Do this immediately.
Step 2: File a Complaint in SCORES
- Securities and Exchange Board of India’s SCORES platform can be used for grievance escalation.
- To escalate it further, file a complaint in SMART ODR.
Step 3: File for an Arbitration in Stock Market
If permitted under rules:
- Appeal against the arbitration award
- A panel reviews legality, reasoning, and regulatory compliance
This is the stage reached in the Dealmoney complaint case.
Need Help?
Disputes like this are not about shouting louder. They are about documentation, timelines, and regulatory alignment.
Contact us, we at FraudFree, provide end-to-end guidelines for investors dealing with:
- Unauthorized trading penalties or liquidation
- Excess brokerage or dealer-driven trading
- Authorized person misconduct
- Exchange complaints, arbitration, and appeals
This includes:
- Understanding whether your case is actually actionable
- Knowing what evidence matters and what doesn’t
- Structuring complaints so they survive IGRP and arbitration scrutiny
- Explaining regulatory findings in plain language
The objective is clarity and process, not false promises.
Conclusion
This Dealmoney Commodities appellate award shows that:
- Investor protection mechanisms do work
- Brokers remain accountable for their authorized persons.
- SEBI’s pre-trade confirmation rule is not optional
But it also shows something else:
Only investors who follow the process, preserve evidence, and escalate correctly get relief.
Losses may be part of trading. Unauthorized actions are not.
