Investors affected by the Stockal scam may seek remedies under the Information Technology Act, 2000, and the Bharatiya Nyaya Sanhita, 2023, if negligence in maintaining reasonable security practices is established, legal experts told Moneycontrol.
Moneycontrol reported on November 3 that nearly 30 retail investors have allegedly lost more than Rs 100 crore in unauthorised stock trades linked to Bengaluru-headquartered fintech platform Stockal Securities. The affected investors alleged that their accounts were accessed without authorisation on October 15, resulting in the mass liquidation of their US blue-chip stock holdings and causing "massive losses" to their portfolios.
Read More - Investors lose over a Rs 100 crore in Stockal Securities scam: Dozens of retail investors report unauthorized US stock liquidation
Stockal Securities is a Bengaluru-based Indian fintech platform registered with SEBI that allows retail investors in India to buy and sell US stocks, exchange-traded funds (ETFs) and other foreign securities. It offers an India-facing app for account funding, trading and portfolio tracking, while partnering with US-based clearing brokers such as DriveWealth LLC to execute trades and hold assets in custody.
"If negligence is established (by Stockal), investors may seek compensation under Section 43A read with Section 46 of the IT Act," said Pranav Bhaskar, Senior Partner at SKV Law Offices.