Every day, we come across countless stories of retail investors being misled in the name of stock market profits. But Renu’s case struck a chord, a first-time investor who trusted too easily and paid the price for it.
Here’s how she turned that loss into a small but powerful legal win.
The 70:30 Profit-Sharing Trap
Renu, a resident of Delhi, opened her trading and Demat account with Angel One in November 2023 after Prikshit and Poonam (agents) convinced her.
They promised her a guaranteed profit model with 70:30 profit sharing.
According to their pitch: “You invest, we trade. You take 70% of the profits, and we take 30%.” Sounds lucrative, right?
That was the beginning of a nightmare.
What Really Happened?
Renu entrusted her account and added a capital of ₹20 lakhs to her account between November 2023 to January 2024.
They were operating under the banner of Angel One, and one of them (Manish) was even an Authorized Partner (AP) with the broker.
But instead of managing her funds responsibly, they allegedly conducted reckless, unauthorized trades without her knowledge or consent.
Despite no returns, Angel One charged her a brokerage of ₹99,775, just from the volume of trades executed in her account.
And to make things worse, the broker argued that Renu had already received payouts of ₹1.64 lakhs, implying she was aware and consenting to all trades.
But let’s be real, when someone else is managing your account and misleading you, occasional payouts are just part of the illusion.
When Trust Turns into Exploitation
Renu never wanted to be a trader. She was promised easy profits and recovery of losses, even after the initial trading failed.
They kept reassuring her: “Don’t worry, we’ll recover it in the next trade.”
Sound familiar?
It’s a classic trap that so many unsuspecting investors fall into. What started as trust turned into blind faith, and that blind faith cost her ₹20 lakhs.
Our Fight: Holding the Brokerage Accountable
We stepped in and filed an arbitration claim through SEBI’s Online Dispute Resolution (ODR) portal.
In the arbitration proceedings, we pointed out:
- The false promises made by the agents.
- The misrepresentation of the profit-sharing model.
- The unauthorized access and mismanagement of her account.
- The fact that Angel One continued to benefit, charging nearly ₹1 lakh in brokerage.
Angel One’s defense?
“She gave her login credentials.”
“She got SMS and contract notes.”
“She never objected until there were losses.”
But here’s the thing: they terminated their own APs after Renu complained, citing misconduct. That alone was a red flag they couldn’t ignore.
The Final Award: A Step Toward Justice
The arbitrator didn’t ignore the fact that Renu had shared her login details, which weakened the argument for full recovery of losses. But he also recognized the unfair practices employed by the agents—practices that the brokerage should have curbed.
In the words of the arbitrator:
“For the client, the agent is the face of the company… Any assurance from the agents would be considered an assurance by the company.”
The award: ₹2,00,000 in compensation to Renu for the unfair trade practices of Angel One’s agents.
If not paid within 15 days, it would attract 9% annual interest.
Key Takeaways for Every Investor
- Never believe in guaranteed profits.
- Avoid profit-sharing arrangements unless they’re legally structured and documented.
- Do not share OTPs or credentials, ever.
- Keep all chat records and evidence.
- If you’ve been misled, you can fight back.
Register with us now if you have been a victim of any such profit-sharing model or unauthorized trading practices. Our team will provide you with end-to-end support and represent you in the arbitration or other hearings related to the case.
