You trust the person on the other side of the call because they sound confident.
They speak the language of the markets. They tell you your account will be managed properly and promise a daily return potential of 10–20%.
It sounds ambitious, but when someone presents it with certainty, it feels convincing.
You deposit ₹25,000. Initially, your account shows a profit. And then, the next day, your trading account reflects a negative balance of nearly ₹1.9 lakh.
How does an account move from profit to such a large negative exposure in such a short time?
This article examines a complaint involving Lemonn Markets Pvt Ltd, where an investor has alleged unauthorised trading, excessive lot execution, and margin exposure without proper disclosure.
Lemonn Unauthorised Trading Issues
Lemonn operates under the entity NU Investors Technologies Private Limited, which is registered with SEBI as a stock broker and depository participant. The company’s regulatory details are publicly disclosed on its website.
The following screenshot reflects the regulatory information section as displayed on the official website:
The screenshot above shows the official regulatory disclosures of NU Investors Technologies Private Limited, which operates the Lemonn platform.
The details visible include SEBI Registrations:
- Stock Broking Registration No: INZ000304837
- Depository Participant Registration No: IN-DP-712-2022
- Research Analyst Registration No: INH000016764
The details are true as compared to the data available on the official databases.
These registrations confirm that the entity is authorised to operate as a stockbroker and depository participant under SEBI regulations.
However, SEBI registration does not eliminate the obligation to follow strict compliance norms.
A registered broker must:
- Obtain clear client consent before executing trades
- Disclose risks involved in derivatives trading
- Clearly communicate margin exposure
- Avoid misleading return projections
- Maintain proper documentation of trade authorisation
If a relationship manager handles trades without informed consent, or if risk and margin exposure are not properly explained, such actions may raise regulatory concerns, even if the broker itself is registered.
Registration allows a broker to operate. It does not remove the obligation of transparency and consent.
What Is Unauthorised Trading?
Unauthorised trading is not simply about loss.
It generally refers to situations where:
- Trades are placed without the client’s explicit consent
- Higher quantities are executed than instructed
- Risk and margin exposure are not properly explained
- Dealer terminals are used without proper recorded authorisation
- Churning in stock market
Loss alone does not prove misconduct. But loss combined with absence of consent and disclosure raises regulatory questions.
Lemonn Trading Complaints
According to the complaint, the investor was contacted by an RM named Vipin and encouraged to open a trading account.
He was allegedly told:
- Brokerage would be minimal
- The account would be managed properly
- 10–20% daily profit could be generated
After depositing ₹25,000, the investor claims he allowed the RM to handle the account due to lack of time.
Under SEBI norms, assured daily return claims are not permitted. Any projection must clearly disclose risk.
Alleged High-Quantity Trade Execution
The investor states that he instructed limited trading; 1 to 2 lots.
However, larger positions were allegedly executed.
Let’s understand what this screenshot shows.
You can see:
- A derivatives (F&O) contract
- Multiple lots executed
- Entry price and exit price
- Position details
In derivatives trading, each “lot” represents a fixed number of shares. Increasing the lot count directly increases financial exposure.
For example:
If 1 lot carries X risk, 5 lots carry approximately 5X risk.
This is not a small difference, it is exponential exposure.
Under SEBI’s suitability and authorisation requirements:
- Brokers must ensure trade quantity aligns with client instruction.
- Risk exposure must match the client’s declared risk profile.
- Executing higher lot sizes without informed consent may amount to unauthorised trading.
If the instruction was 1–2 lots but more were executed, that significantly changes the risk taken.
Sudden Negative Balance & Margin Exposure
As per the complaint, the account initially reflected profit of around ₹19,000 and expected settlement of around ₹29,000.
However, the following day, the account reportedly showed a large negative balance.
This screenshot shows:
- Account summary
- Negative balance approximately –₹1,79,000
- Available margin area
In simple terms, this means the account did not just lose the initial ₹25,000 deposit. It reflected an outstanding liability exceeding it.
This typically happens in leveraged derivative trading, where margin allows larger positions than available capital.
Under SEBI’s margin framework:
- Clients must be clearly informed that losses can exceed initial capital in F&O trading.
- Margin exposure must be explained before executing high-risk trades.
- Brokers must not create leverage without informed consent.
If the investor was unaware of the exposure being created, this becomes a serious risk disclosure concern.
Another snapshot reinforces the exposure.
This image again reflects a negative balance around –₹1,89,000.
The repetition confirms that the exposure was not a temporary fluctuation — it was a sustained liability.
Such large negative balances generally arise from:
- High lot size
- Rapid price movement
- Leveraged margin positions
This is why disclosure and consent become critical.
Trading Activity Pattern
The investor also alleges that total brokerage charged amounted to ₹1,74,720. While this exact total is not visible in the screenshots reviewed, it forms part of the complaint.
The trading summary screenshot shows repeated trade entries.
This screenshot reflects:
- Multiple trades
- Frequent entries within a short time
- Active turnover
High turnover increases brokerage accumulation.
Under regulatory standards:
- Excessive trading primarily aimed at generating brokerage revenue, known as churning, is not permitted.
- Brokers must act in the client’s interest, not merely increase trade volume.
Whether this qualifies as churning depends on documented authorisation and intent.
How To File a SEBI Complaint Against a Stockbroker?
If the broker’s internal grievance process does not resolve the issue, you can escalate the matter through regulatory channels. The process is structured and documentation-based.
1. Raise an Internal Complaint First
Before approaching SEBI, you must submit a written complaint to the broker’s official grievance redressal officer.
Clearly mention:
- The trades you are disputing
- Quantity mismatch (if any)
- Lack of risk or margin disclosure
- Timeline of events
- Supporting documents attached
Keep a copy of your complaint email and the response received. Brokers are required to respond within a defined timeframe.
2. File a Complaint on SEBI SCORES
If the issue remains unresolved, you may register a complaint on the SEBI SCORES (SEBI Complaints Redress System) portal.
While filing the complaint:
- Select the correct intermediary category (Stock Broker)
- Enter the broker’s name and registration details
- Provide a clear and chronological explanation of events
SEBI evaluates complaints based on documented evidence, especially whether trades were authorised and risks were disclosed.
3. Escalate to the Exchange
If required, the matter can be escalated to the respective stock exchange (NSE/BSE) grievance redressal mechanism.
The exchange may review:
- Order logs
- Recorded authorisation
- Margin exposure
- Compliance with trading norms
In certain cases, disputes may proceed to arbitration under the exchange framework.
4. File Arbitration in Stock Market
If the grievance remains unresolved, arbitration through the exchange mechanism is an option.
Arbitration examines:
- Whether trades were placed with consent
- Whether risk and margin disclosures were adequate
- Whether brokerage practices complied with regulations
This is a more formal process and relies heavily on documentation.
Need Help?
If you are facing a similar situation, you do not have to navigate it alone.
Many investors struggle to determine whether the loss was purely market-driven or whether there were gaps in consent, risk disclosure, or trade execution. The distinction matters when preparing a structured complaint.
Register with us and we will assist you in:
- Reviewing trade documents and contract notes
- Organising communication and payment records
- Structuring complaints clearly and chronologically
- Identifying relevant regulatory provisions
- Preparing submissions to brokers, exchanges, or SEBI
Conclusion
Allegations of unauthorised trading are serious in any regulated financial environment.
Lemonn operates as a SEBI-registered broker, and with that registration comes strict obligations, obtaining proper client consent, clearly explaining risk, disclosing margin exposure, and maintaining transparent trading practices.
In this complaint, concerns have been raised regarding projected daily returns, execution of higher lot quantities than allegedly instructed, and the creation of significant negative exposure in a short period of time.
Markets involve risk. But informed consent, transparency, and accountability are not optional, they are foundational to a regulated system.
When clarity is missing, documentation becomes the investor’s strongest safeguard.
