When an investor opens a trading account with Motilal Ol, they often do so with the expectation that any advice or trading activity will align with their risk appetite, financial goals, and suitability profile. This trust becomes even more critical when trades are executed by a licensed or authorised person on the investor’s behalf.
However, problems can arise when trading activity moves faster than the investor is comfortable with, or when it occurs without sufficient explanation. In such cases, losses may occur before the investor fully understands what positions were taken or why they were executed.
These situations highlight how trade execution practices—not just market movements—can significantly affect an investor’s portfolio outcomes. When trading decisions differ from what the investor expected or agreed to, the result is often confusion, financial stress, and a breakdown of trust.
This blog underscores the importance of ongoing oversight, timely communication, and a clear understanding between investors and authorised intermediaries.
By paying attention to how trades are managed and reported, investors can identify early warning signs, stay informed about their accounts, and remain actively involved in their trading.
Brokerage Churning & Unauthorised Trading by Motilal Oswal
Ajay Kumar (name changed) received a phone call on 20 July 2025 from individuals claiming to represent Motilal Oswal. During this call, they offered trading assistance and assured him that they would help generate profits.
On 25 July 2025, Ajay opened a demat and trading account through Vishal Gupta (name changed), who introduced himself as an authorised person of Motilal Oswal. At the time of account opening, Ajay clearly stated that he had no prior understanding of trading and that he would be fully dependent on the guidance provided to him.
He agreed to proceed after being informed about lower brokerage rates and the availability of ongoing support. Once the account was activated, Ajay was added to a WhatsApp group and began receiving frequent calls from team members based in Indore.
The team repeatedly informed him that brokerage charges had been reduced. Initially, they advised him to invest in equity shares, and Ajay followed their instructions. Over time, based entirely on this guidance, he invested approximately ₹10.5 lakh.
Shift to Commodity Trading and Increased Activity
Soon after, the advisory focus shifted from equities to commodity trading, specifically crude oil. Ajay admitted that he had no prior knowledge of commodity markets. Despite this, he was guided step by step through WhatsApp calls and encouraged to place multiple trades.
The trading activity escalated rapidly. In one session, Ajay executed nearly 10 trades in the same crude oil contract within minutes.
Image 1 shows multiple crude oil option trades executed in quick succession. While one trade resulted in a relatively small loss of ₹3,853, the repeated transactions led to exceptionally high brokerage and statutory charges, causing a significant net debit in the account.
Within just 17 days of account opening, the total loss in Ajay’s account reached ₹7,47,387.
Unauthorised Sales and Rising Brokerage Costs
Ajay later noticed that some of his holdings were sold without his consent. Even after these sales, the account continued to reflect a negative balance of approximately ₹5,57,660.
During this short period, the trading activity generated brokerage charges exceeding ₹6.3 lakh. Ajay later discovered that the reduced brokerage rates applied only to equity trades, not commodities.
He stated that:
- No one explained what a “lot” meant in commodity trading
- He was not informed that brokerage is charged per lot, per trade
- Trades were executed in multiple lots, resulting in repeated and high brokerage deductions
According to Ajay, the losses were driven by how the trades were executed, not by independent decisions taken by him.
Margin Shortfall and Settlement Discussions
After Ajay raised concerns through official email communication, he began receiving frequent calls from Vishal Gupta and other team members.
Image 2 shows a daily margin statement reflecting a significant MCX margin shortfall, indicating high exposure and insufficient available funds on that trading day.
During these calls, Ajay was offered partial settlements ranging from ₹63,000 to ₹2.52 lakh. In one conversation involving both the authorised person and the compliance officer, a settlement of ₹2.52 lakh was proposed.
Ajay also stated that he was encouraged to recover losses by continuing to trade, which he declined. He reported that the repeated calls and pressure caused him significant mental stress.
What Investor Can Takeaway?
This case study highlights how trading decisions, account control, and cost structures can significantly affect investor outcomes. It shows why investors must stay informed and actively monitor their accounts and charges.
Investors Should:
- Understand products, lot sizes, and brokerage before trading.
- Avoid frequent or high volume trades without clear purpose.
- Monitor contract notes, statements, and margin reports regularly.
- Do not allow anyone to trade without clear and recorded consent.
- Question unexpected charges, losses, or position changes immediately.
- Keep written communication for instructions and confirmations.
How to File a Complaint Against Motilal Oswal?
Investors might want to file a complaint if their trading activities or how their account is managed make them worried about honesty, permission, or fair treatment.
These problems often show up when losses happen quicker than expected or when the actions taken on the account don’t match what the investor asked for.
Raising the issue quickly helps to record the problem early, which makes it easier for regulators or complaint platforms to look into what happened. Knowing when to speak up helps investors stay informed and protected.
Reporting helps create a proper record so that the company and the regulator can look into the issue fairly and clearly.
Having a clear reporting process also makes everything easier to understand and keeps all communication written down so it can be followed up on during the whole process.
Process to report:
- Broker’s grievance cell: Start by contacting the broker’s official grievance or compliance email.
- Lodge a complaint in SCORES: If the problem isn’t solved, file a complaint on the SCORES platform along with any supporting documents.
- Provide details: Include your client ID, trade information, dates, amounts, and copies of emails or statements.
- Track status: Check the updates and responses directly on the platform.
- Escalate the Complaint: If issue remains unresolved, then escalate it and file an arbitration in the Stock Market.
Need Help?
We understand how stressful and overwhelming this experience can be. When trust in a trading relationship breaks down, investors are often unsure about what steps to take next or how to present their concerns effectively.
This is where our team steps in. We guide investors through the entire process—from understanding what may have gone wrong to identifying red flags in trade statements and contract notes. Our team assists in reviewing account activity, organizing records, and preparing proper documentation to clearly present the issue.
We also support investors in drafting complaints, following up with intermediaries, and navigating the resolution process, ensuring that each step is structured and well-documented. With the right guidance and clear paperwork, investors are better equipped to seek clarity, accountability, and a fair outcome.
Having experienced support throughout the process helps investors stay informed, confident, and focused until the matter is fully addressed.
Conclusion
Motilal Oswal Financial Services is a regulated financial services company with a broad reach throughout India. It provides various investment and trading options through its platforms and authorized representatives.
As with other market intermediaries, their work involves interacting with clients, which requires clear communication, appropriate guidance, and correct execution while following legal rules.
Investor awareness is important in avoiding issues and confusion.
Investors can gain advantages by learning about the products, fees, and risks before making trades. It’s also helpful to regularly check account statements and ask questions if something seems unusual.
Staying informed and watchful leads to better decisions and helps protect investors in the long run.
