Stocks

Arcadia Share declared as defaulter; investors can claim within 3 months

Our Bureau Chennai | Updated on July 06, 2021

Earlier in February, the NSE had disabled the trading terminals of Arcadia Share & Stock Brokers in all segments for alleged misuse of clients’ funds and securities

The National Stock Exchange has declared Arcadia Share & Stock Brokers as a defaulter from July 2 and asked constituents of the broking firm (investors or clients) to submit within three months, their claims online or in physical format.

Earlier in February, the NSE had disabled the trading terminals of Arcadia Share & Stock Brokers in all segments for alleged misuse of clients’ funds and securities.

According to a public notice by NSE, “All claims submitted by investors will be considered for processing if found due and payable in accordance to rules, bylaws, regulations and guidelines of the exchange, SEBI circulars and regulations and the maximum compensation limit per invest is ₹25 lakh out of the Investor Protection Fund (IPF).”

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NSE had received an alert about an off-market transfer of securities by Arcadia during September and October 2020, and later found that off-market transfer of securities worth ₹5.51 crore to clients’ demat accounts without enough securities available in the client collateral account.

NSE had also received an alert from depositories regarding invocation of pledged securities by banks from proprietary demat accounts of Arcadia between October and December 2020 worth ₹20 crore.

A forensic audit later found that the amount payable to the clients was about ₹47.51 crore as on December 31, 2020, whereas the clients payable as reported in the cash and cash equivalent balances submission by Arcadia as on the same date were ₹11.17 crore. “This clearly establishes that Arcadia has been intentionally filing incorrect information and data with a view to conceal the true position of the availability of clients’ funds and securities,” NSE had said.

Published on July 06, 2021

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