Surat stockbroking fraud: Avoid unregistered middlemen posing as brokers

Dealing with such entities is highly risky, as they can block trading and abscond with deposits

A major financial fraud is under investigation in Surat, where more than 54 brokers and investors have allegedly been cheated of ₹4.84 crore by a share trading firm. According to media reports, the accused are the owners of Green Wall Enterprise, which purportedly operated on behalf of Jainam Broking.

 

The firm promised clients high leverage, promising to allow them to trade up to ₹50 lakh by depositing just ₹5 lakh. On August 14, 2025, investors found themselves locked out of their trading accounts. Their funds also became inaccessible.

 

This case highlights the need for investors to exercise extreme caution when choosing brokers and to be alert to red flags while working with them. By doing basic due diligence and being alert, investors can reduce the risk of falling victim to such scams.

 

Choosing a stockbroker

 

Before onboarding, confirm that the broker is registered with the Securities and Exchange Board of India (Sebi). “Work only with brokers registered with Sebi and recognised stock exchanges,” says Ajay Menon, managing director and chief executive officer (MD & CEO), Motilal Oswal Wealth Management. Check the broker’s registration number on Sebi’s website and its membership on the exchange’s website.

 

Ensure independent client accounts exist. Trivesh D, chief operating officer, Tradejini, emphasises that the firm must provide clients direct access to their trading account and control over their funds.

 

KYC compliance is mandatory. “Insist on proper KYC, account agreements, and disclosure documents,” says Vikas Singhania, CEO, TradeSmart.

 

Avoid intermediaries, such as Green Wall Enterprise in this case. “Investors must be cautious of opaque entities that claim to act on behalf of a broker while managing client money and controlling accounts,” says Abhishek Kumar, Sebi-registered investment adviser and founder, SahajMoney.com. Kumar adds that dealing with such intermediaries is highly risky, as they can block trading and abscond with deposits.

 

Stay away from brokers who promise assured or guaranteed returns or offer extraordinary leverage. “Many investors are lured by promises, such as trading up to ₹50 lakh account with just a ₹5 lakh deposit. Such schemes often result in frozen accounts or vanished funds,” says Trivesh.

 

Similarly, do not fall for offers of extremely low trading costs unless thoroughly verified. Download mobile apps only from the broker’s official website or verified sources, and verify that the domain of emails and contact numbers match the broker’s official details. “Fraudsters may use the names of prominent brokers to pose as authorised agents or partners,” says Singhania.

 

Demand full disclosure of fees, details of the dispute redressal process, and the credentials of the compliance officer.

 

While investing

 

Always transfer funds only to official accounts. “Ensure funds are transferred only to the account of a Sebi-registered broker and not any intermediary,” says Abhishek Kumar. Third-party bank accounts being used to collect investor funds is a red flag. Treat communications from unofficial emails or WhatsApp numbers with suspicion.

 

Investors must receive trade confirmations, contract notes, and depository statements regularly and reconcile them. Refusal to provide these documents is itself a warning signal.

 

Investors should retain direct control over their funds. Any shortcut offered during the onboarding or subsequent process should be treated as a red flag.

 

If fraud occurs

 

Immediate action is crucial. “Investors should immediately file a complaint on Sebi’s SCORES platform, inform the stock exchange, and register a first information report (FIR) with the police,” says Menon.

 

They may also lodge a police complaint with the Economic Offences Wing (EOW). “They may file FIR for criminal breach of trust and conspiracy, and ask for freezing of assets,” says Trivesh.

 

If the fraud was online or app-based, file a complaint with the cybercrime authorities. Submitting statements and documentary proof of investment is essential to strengthen the criminal prosecution already initiated.

 

In parallel, investors should approach Sebi through the SCORES platform and the investor grievance cells of NSE and BSE, which provide grievance redressal and arbitration mechanisms.

 

“These actions can trigger regulatory measures under the Prohibition of Fraudulent and Unfair Trade Practices Regulations,” says Tushar Kumar, Advocate, Supreme Court of India.

 

He suggests that civil remedies can be pursued through recovery suits or collective action petitions.

 

“Investors may further apply for interim attachment of the accused’s assets under the Bharatiya Nagarik Suraksha Sanhita 2023 (BNSS),” adds Tushar Kumar.