He had seen the advertisement in a newspaper and, a month later, walked into the office to meet them in person.
It looked real, a rented office, confident men, a promise that stuck in his head:
“Hum stock mein kaam karte hain, index nahi karte.”
They told him the safe game was stocks, that they would build his account up patiently.
He hesitated, then gathered his courage and deposited ₹3 lakh.
From the second morning, something felt off.
The trades came in bursts, “dhana dhan, dhana dhan”.
Buy, sell, buy, sell, from the moment the market opened until it closed.
He asked them to slow down once or twice. They brushed it off. By the time he stopped to count, the damage was staggering.
On a capital of ₹3 lakh, they had run a turnover of nearly ₹3 crore in a single month.
His capital was wiped. So were the LIC savings he had kept for ten years and quietly poured in, a loss he had not even told his family about.
This is what churning looks like from the inside. And the single most powerful clue was sitting in plain sight: the turnover.
Why is my Trading Turnover So High?
A genuine investor trading ₹3 lakh does not generate ₹3 crore of turnover in a month.
That is a 100x churn of the capital base, and it has nothing to do with making the client money.
A healthy investing account rarely exceeds a 1x to 2x ratio per month.
It has everything to do with brokerage. Every buy and every sell triggers a commission. Trade the same money over and over, all day, and the brokerage stacks up into lakhs while the account bleeds out.
Here is the rough arithmetic that should alarm anyone: the brokerage burned in an account like this can run higher than the actual loss itself.
A position that was down, say, ₹20,000 can quietly carry far more than that in accumulated commission once it has been traded back and forth enough times.
The “loss” the investor sees is partly market – but a large slice of it is simply commission, manufactured by volume.
You do not need to take anyone’s word for this.
Your contract note carries it.
The turnover, the number of trades, and the brokerage charged are all printed there. If the turnover dwarfs your capital and the brokerage is eating double-digit percentages of your money, that is not trading.
That is churning in stock market.
Can I Even Fight This?
When an account gets wiped out like this, a strange thing happens. The initial shock and anger often turn inward. Investors look at their screens, replay the broker’s smooth promises, and feel a crushing sense of guilt. They start questioning themselves instead of questioning the fraud.
If you are sitting with a ruined ledger right now, you are probably frozen by a handful of heavy doubts:
“But I signed a paper saying I won’t blame them.”
He remembered it the moment we discussed it. At account opening, they had him sign something, a line buried in the KYC paperwork to the effect of “loss hua to hum zimmedaar nahi.”
Many investors believe that a signature closes the door. It does not.
A privately drafted disclaimer cannot override SEBI’s regulations. A broker is still bound by the Stock Brokers Regulations, and a signed “I accept my losses” line does not authorise the firm to handle your account, place trades without your instruction, or manufacture turnover for commission.
The rules sit above the paperwork, not the other way around.
“But can I actually file a complaint if I stayed quiet for a few weeks?”
This is where most victims freeze. They think that because they didn’t stop the trades on day one, or because they technically received the automated SMS alerts, they have somehow waived their right to fight back.
In a conversation of a few minutes, three problems were already visible:
- Churning for brokerage. A ₹3 lakh capital driven to a ₹3 crore turnover is volume created for commission, not for the client’s benefit.
- No pre- and post-trade confirmation. A broker handling your account is expected to confirm trades with you, before placing them and after. He never received a single OTP or a per-trade confirmation. Trades simply happened.
- A disclaimer used as cover. The signed KYC line does not legalise any of the above; it is being leaned on precisely because the conduct cannot stand on its own.
And because the account was opened and operated through the firm’s own authorised person / sub-broker, the registered firm is accountable for what its representative did.
How to File a Brokerage Churning Complaint?
- Complain to the broker’s compliance officer first, in writing, and keep the acknowledgement. Pull your full contract notes and ledger; the turnover and brokerage figures are your strongest evidence.
- File a Complaint in SEBI SCORES if there is no satisfactory resolution, typically after about 15 working days.
- Report a complaint in SmartODR for online dispute resolution if it remains unsettled.
- Arbitration / the IGRP panel is where the documented churning, the missing confirmations, and the brokerage-to-loss ratio are weighed. You can file for arbitration in stock market.
A word of caution that applies to cases like this: when the complaint lands, the firm may call directly, offering a quiet settlement
“Hum ek lakh de dete hain, complaint wapas le lo.”
Do not negotiate alone, and do not accept a lowball figure to make it go away. Route it through whoever is representing your full claim.
Has your broker wiped out your account through unauthorized trading?
Don’t let a signed disclaimer scare you into silence.
If your contract notes are showing astronomical turnover compared to your actual capital, Contact us today.
We can help you analyze your ledgers and guide you through the SEBI SCORES and SmartODR escalation process.
Frequently Asked Questions
1. Why is my trading turnover so high compared to what I put in?
Repeated intra-day buying and selling of the same capital inflates turnover. A turnover many times your capital is a classic sign of churning for brokerage.
2. Can a broker trade in my account without my permission?
A broker handling your account is expected to confirm trades with you. Trading without any pre- or post-trade confirmation, and without OTPs or instructions, is a serious lapse.
3. Does the consent letter I signed protect the broker?
No. A privately drafted disclaimer cannot override SEBI’s regulations or authorise misconduct. The rules apply regardless of what you signed.
4. How do I read the brokerage in my contract note?
Look at total turnover, number of trades, and brokerage charged. If brokerage is consuming a large share of your capital relative to the loss, that points to churning.
