Vijay (name changed), who runs a small business in Gujarat, opened a trading account because a broker convinced him it was the smart move.
The pitch was the usual one: leave it to us; we’ll deliver the profit; you just fund the account. It was a registered broker, so it felt safe enough.
The first day or two went exactly to script. A little profit, shown clearly, enough to make him relax. Then the broker took over the account completely.
And here is the part Vijay never agreed to: the trades just kept coming. One after another, all day, placed by someone else.
He did not approve them one by one. The only “updates” he got were vague WhatsApp calls in the morning: “we’re taking this much quantity today”, and even those did not say what would actually be bought or sold. He found out what had happened only after it had already happened.
By the third day, an account he had funded with around ₹1 lakh was close to zero. And when he looked at the records, the reason was not a run of bad trades. Nearly ₹80,000 to ₹90,000 had gone in brokerage alone.
When he came to us, he assumed he had lost it in the market. He had not. The trades themselves were the product, and he had never authorised them.
We have taken up his case, and it rests on two clear violations.
Unauthorised Trading Is a Violation, Full Stop
A broker can execute only the trades you have authorised. That is the entire arrangement.
Running your account and placing orders without your specific authorisation for each one is unauthorised trading, a clear breach of the rules a registered broker operates under.
It does not matter that you handed over access, and it does not matter that “they said they knew what they were doing.” If you did not approve the trade, the broker had no business placing it.
And the WhatsApp call does not save them:
- A vague call is not authorisation. “We’re taking this quantity today” doesn’t mean you’re approving a specific trade. Real confirmation is per-trade and specific.
- A broker casually trading your account over WhatsApp is itself improper. That is not how authorised trading is supposed to work, and it is a sign the activity was meant to stay loose and undocumented.
So the first problem is not that the trades lost money. It is that they were placed at all.
The Brokerage Is the Whole Tell
Now the second violation, and it is the one that exposes the motive.
When a broker is churning an account, trading it over and over for no reason except the fees each trade generates, the brokerage balloons against your capital.
Nearly ₹90,000 of brokerage on a roughly ₹1 lakh account is not normal trading. It is the signature of an account being run for the broker’s income, not your returns.
That is the quiet truth of a case like this: the broker’s earnings are your churn. Every extra trade is money out of your account and into theirs, which is exactly why the trades never stopped.
Your Contract Note Is the Evidence
Here is the document that wins this case, and most people never open it.
Every executed trade is sent to you as a contract note, usually an emailed PDF, listing the trade and the brokerage charged on it.
Pull those out and the whole thing is visible in black and white: the trades you never placed, and the brokerage stacked on each one.
That is what turns “I lost money trading” into “a registered broker placed unauthorised trades in my account and stripped it through brokerage.”
How to Recover Your Money Back?
If you discover unauthorised trades on your account, do not panic; the law completely protects you against the growing threat of stock broker scams in India.
By taking the right steps, you can minimise unauthorized trading risks, reclaim lost funds, and seek accountability from your broker.
Here are the steps to file a complaint against unauthorised trading:
- File a Complaint Directly with Your Broker: Submit a detailed written complaint to the broker’s compliance officer. Clearly list the unauthorised trades, missing confirmations, WhatsApp-based recommendations, and any disputed brokerage charges.
- File a Complaint in SCORES: If the broker fails to resolve the issue satisfactorily within 15 working days, escalate the matter through the SEBI SCORES grievance redressal platform.
- File a Complaint in SMART ODR: If the dispute remains unresolved after SCORES, take the matter to the SMART ODR (Online Dispute Resolution) platform for mediation and conciliation.
- Stock Market Arbitration: If mediation does not resolve the dispute, pursue exchange arbitration, where an independent arbitration panel will hear the case and issue a binding decision.
A registered broker is accountable for this conduct; there is no hiding behind “the client gave us access.” The claim covers the losses and the excessive brokerage, and the contract notes are what carry it.
The line worth remembering: if you didn’t approve the trade, it wasn’t yours to lose, and a brokerage bill that size is not a fee; it’s the scheme.
Don’t want to do this alone?
Register with us, and we will walk you through every step, from reading your contract notes to filing the complaint in the right place.
You focus on what happened. We handle where it goes next.
Frequently Asked Questions
1. Can a broker place trades without my permission?
No. Trades require your authorisation. Placing them without your specific approval is unauthorised trading, a clear violation, and it is claimable.
2. They “confirmed” everything on a WhatsApp call. Doesn’t that count?
No. A vague call is not per-trade authorisation, and a broker trading your account that way is itself improper. Save those calls and messages; they are evidence, not consent.
3. How do I prove what was done to my account?
Your contract notes. Each emailed note lists every executed trade and the brokerage charged. Together they show the trades you never placed and the fees stripped out, the spine of the case.
