A stock broking firm from Vile Parle, Mumbai, called ‘Artha Vriddhi Securities’ recently ended up in hot waters after it has been found to be the center of a massive financial scam; unearthed by Sunil Giri of Blue Sea International. The top management of the fraud stock broking firm, comprising the Director, Sunil Jain; and the owners, Dhiren Shukla and Sunil Jain, was arrested on 23rd July, 2022.
The firm was involved in duping a number of investors for the last few years, of more than 10 crore rupees. One business consultant associated with the firm, Jairaj Bafna, is absconding. The funds and stocks of 800 investors are stuck as their trading terminals have been blocked by NSE.
What Artha Vriddhi Securities used to do was opening trading accounts of the relatives of directors in the same firm and doing the reverse trades of clients and transferring the profits to their relatives’ accounts. The reverse trading was done in the F&O section mainly. The firm has been found culpable of unauthorized trading in clients’ accounts, providing falsified, modified, and deliberately wrong statements to them; and failure to provide personalized trading platforms which were promised as an allurement at the time when the trading accounts were opened.
The Director, Sunil Jain and Business Consultant, Jairaj Bafna have siphoned off around 9.6 crore rupees into their relatives’ accounts through reverse trading and unauthorized trading and have hence, misused the funds.
Blue Sea International had received around 300 e-mails with attachments which contained profit and loss statements with complete date-wise details of the trades. On verifying the same from the NSE, it was found out that all the trades were shockingly completely false and in reality, some other trades were executed which were not informed about to Blue Sea International.
The NSE Grievance Redressal Committee conducted elaborate proceedings and had books of accounts audited; and the investigations revealed that client funds were indeed misused and siphoned off in the directors’ relatives’ accounts. NSE GRC admitted/calculated the claim amount for the loss caused to Sunil Giri, the complainant, at Rs. 1,54,00,000. (Order dated 8th November 2021)
The shares held in clients’ demat accounts were sold without informing the clients and shown as loss to them and a number of unauthorized trades were carried out in various clients’ accounts. When the clients approached Sunil Jain, the Director, for clarity and refunds, he abused and threatened them; and arrogantly dared them to go the legal way. At present, there are about 15 complaints with the NSE for fraud against this firm.
Vile Parle police had filed an FIR against the now arrested Director and owners and the absconding business consultant on 21st July, 2022.
Many investors have lost the savings of a life-time and the main culprits, Sunil Jain and Jairaj Bafna are now operating through some other broking firm belonging to Sunil Jain’s relatives. Ritesh Jain’s, (Sunil Jain’s cousin), Urvi Milan Shah’s, (Sunil Jain’s relative), Ruchita Bafna’s, (Jairaj Bafna’s sister) accounts were all used for receiving ill-gotten investor funds.
On verification of bank statements, it was found out that there were crystal-clear signs of round tripping of funds between the directors’ and the relatives’ accounts. Further investigations into the matter shall reveal how the illicitly acquired wealth was laundered and its further layering took place.