Investors lay siege to SEBI office, demand Karvy-like action against BMA Wealth

On Monday, SEBI’s office came under siege as a crowd of 40-50 stock market investors blocked the main entrance of the regulator’s BKC office building. The commotion led to police being called to guard the office, sources said.

The investors said they were protesting against SEBI’s slow course of action against a broker BMA Wealth. Although the broker was suspended by National Stock Exchange (NSE) in October, it has not been declared a defaulter yet, something which would otherwise enable clients to claim money from the exchange investor protection fund.

“It is the only way we think that regulators will wake up from their slumber. A broker BMA Wealth was suspended by the National Stock Exchange in October. All we want is that SEBI act like it did in the Karvy matter and get our shares and money transferred from the broker’s account,” a Mumbai-based investor present at the protest told BusinessLine over the phone.

In the Karvy matter, SEBI forced depository NSDL to transfer shares lying in the brokers account to the 82,599 rightful investors who had paid in full for the security. But the regulator is yet to take any such prompt action against other brokers, who have defaulted on client payments for several months now.

NSE suspended BMA Wealth Creators with immediate effect for non-compliance with the regulatory provisions of the exchange. The broking house had a licence to trade in the capital market, futures & options, currency derivatives and MFSS segments.

IL&FS Securities, Amrapali Aadya Trading and Investments, Kassa Finvest, Unicon, Vasanti Securities, Royal International, Click2Trade, are some of the other brokers who have had complaints of defaults filed against them over the last few years. Some brokers in the list are also said to have diverted client funds to other ventures.

The trading terminals of Fairwealth Securities and BMA Wealth have been disabled by BSE and NSE. BMA was found to have misappropriated client money worth around ₹100 crore, while the management of Fairwealth Securities has been inaccessible to regulators, and has failed to file its weekly compliance report.