DB Stock Broking, the registered sub-broker based in Assam ran away with ₹7,000 crores capital of 23,000 investors.
Now the questions are:
- How did this happen?
- What made investors invest that huge capital?
- What is SEBI doing?
- What can investors do now?
But before getting into the details, let’s focus again on the one common concern of how and why people fall into such scams.
Why couldn’t they see the red flags?
Why do investors repeat the same mistake of investing in schemes promising guaranteed returns even after so many regulations and updates?
Why don’t people realize that scammers couldn’t do scams if they become less greedy and more responsible towards their money? But every time, scammers win because of the people who give in to their fake schemes.
How it All Started?
DB Stock Broking, a SEBI-registered stock broking firm, run by Deepesh Burman since 2018 in Assam. In 2019, he also got registered as an Authorized Person of Angel One.
But instead of working legally like any other sub-broker, he chose another shortcut and illegal way and ran a Ponzi scheme where he came up with promising 8% monthly returns to 120% annual returns.
To trap people in the scheme, he did a lot of PR by associating with different colleges including Guwahati University, Royal Global University, and Assam Engineering College.
Not limited to this he bought many awards that presented him as a genuine personality.
Seeing his association with educated personalities, people got influenced and invested thousands, lakhs, and crores of capital. Starting from Guwahati, he later spread his web to Nalbari, Kangra, Hyderabad, Banglore & Mumbai.
Investors suspected this scam when one day his Guwahati office shut down suddenly. They tried to contact him on the available number and dropped several emails but didn’t get any response.
This aroused the issue and later findings revealed that around 23,000 investors had invested their ₹7,000 crores in his scheme. Since he is also a registered AP of Angel One, this renowned stock broker also came into the limelight.
On this, Angel One released one Press Release with the detail that he has been associated with Angel One since 2019, and in the regular inspection as per SEBI guidelines they didn’t find any wrongdoings in his work.
Angel One mentioned that as an AP he had provided 280 clients in the last 12 months out of which only 44 are active clients. The brokerage generated from the client base of this AP was around ₹82,77.367.
Also, the trading volume of his clients in comparison to the overall client base was almost negligible.
This all was mentioned & signed by Angel One’s compliance officer Mr. Naheed Rihan Patel. Along with this, Angel One has started working on the termination process of Deepesh Burman as an AP.
What Do Police Findings Revealed?
Investors on becoming aware of the scam reported the case to the Police however, the Police couldn’t trace him yet.
In their investigation, they found that he had invested most of the clients’ funds in real estate, partnerships with builders, and other businesses.
Also, some of the investors found his Scorpio car near Guwahati Club which is now in the custody of the Police.
Once again the case is similar to Karvy Stock Broking where the broker pledged their clients’ shares with the bank and availed loan which he invested in other businesses of Karvy.
Although the person associated with that fraud is in police custody, clients who lost their capital are still fighting court cases with banks to get their shares back.
Hopefully, this time things won’t happen, and people succeed in recovering their capital.
Deepesh Burman Left a Video for his Clients
The scammer has not stopped yet and still finding out way to retain the trust of his clients.
As per one of the articles in Deccan Chronicle, Deepesh Burman had left one video recording for his clients where he mentioned that due to some service issue, there is a communication gap and soon everything would be back to normal.
Now is that true or Deepesh Burman is just earning some time for himself? Investors must be alert this time and not fall into his trap again.
What SEBI is Doing in this Case?
Even after so a big scam why SEBI has not taken any action or updated anything to date?
If we consider that the scam is not that old and the scheme has been running for the past 2-3 years, there could be at least a single investor who might have raised a complaint on the SEBI portal. If that is true, then why had SEBI not taken any action?
DB Stock broking is a registered entity thus it becomes the responsibility and duty of SEBI to keep check of the activities. Has SEBI didn’t do any audits of his broking firm? If yes, then didn’t SEBI get a single clue of his activities?
This raised the concern even more as it depicts a huge possibility of a gap in audits of SEBI.
What Investors Must Do?
Since Deepesh Burman is a SEBI registered person thus investors can file complaints on the SEBI portal. Other than this it is important to raise the concern in Cyber Crime which can at least freeze the account details and stop further transactions in his bank account.
Investors must not stop and report this to ED, PMO, and all other platforms to increase the chances of recovery of their capital. Investors must note that their silence or any delay in reporting could reduce the chances of recovery.
A quick action is something that would only help investors in the recovery of their amount.
