Views needed

awije · 1 Views needed Sat Sep 03, 2011 4:13 pm

awije

Stock Analytic

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Dear forum members, I am new to this forum and I am starting with a problem and hope to hear the views of the members in order to decide on my next move.

My portfolio value is Rs. 9 M. I signed a margin trading agreement with the broker firm recently. I have used the margin facility but have always settled within the month and never carried forward any credit. As of Sept 1st I had Rs. 5,000 in my account after settling last months interest. Then on Sept 1st I bought shares worth about Rs. 3 M which is about 34% of my portfolio. I had some stocks which had appreciated in value and I was going to sell them next week to settle the credit. However the broker has sold some of my shares without my knowledge on Sept 2nd I presume to recover this credit.
What I want to know is if they have the right to do this since I had only on Sept 1st taken the credit and can they sell the next day. Should they not wait atleast for 3-4 days before selling. My other question is since I have a margin facility, can they do this.
Also if it is question of liquidity, doesn't this happen at the end of the month.
I got to know about this only today so unable to talk to the broker and would like to have the views of this forum prior to talking to the broker.
I would also like to know what I can do in this instance. Is the only option available to complain to the SEC. Can I sue the broker, any suggestions are welcome.

Thank you

sumith9999 · 2 Re: Views needed Sat Sep 03, 2011 9:52 pm

sumith9999

Stock Trader

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HI there Awije,

There was another case of force selling on this forum which I have replied. How many more without forum facility would be suffering from force selling. I think we should get ttogether (forum members) and form an association to take our problems to CSE re. irregularities /wrong doings of stock brokers. If one person writes tendancy is that complaint to go to the wpb as is a CSE is govt dept. and we know how govt dept works. If we have a Union or an Association of Investors sort of .. it will carry more weight.

as for ur case, Broker can not forcesell without informing client as you may other methods of settling instead of selling that particular share at a lower price or you may take a TOD from your bank and deposit cash immediately.

By writing to this Froum u will get advice only, but no collective action which is required at this juncture to tame these brokers?? who take law unto their own hands and make money at our expense.

bePositive · 3 Re: Views needed Sun Sep 04, 2011 4:18 am

bePositive

Senior Manager - Equity Analytics

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I believe as a general rule the Broker legally can 'force sell' to recover credit, as one is required to sign papers agreeing to it when you initially open the account with the broker.

Kithsiri · 4 Re: Views needed Sun Sep 04, 2011 8:26 pm

Kithsiri

Senior Vice President - Equity Analytics

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bePositive wrote:I believe as a general rule the Broker legally can 'force sell' to recover credit, as one is required to sign papers agreeing to it when you initially open the account with the broker.

I think many so eager to get going that they failed to or not interested in reading the so-called "fine print" before putting pen on paper.

Roboticfx · 5 Re: Views needed Sun Sep 04, 2011 8:44 pm

Roboticfx

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As I know they will allow 3 days, sometimes 4 if you have told them that you pay credited amount soon. Brokers must inform when they going to sell one's own shares. But we can see many brokers break this rule as they need.

Friends,
Don't wait a minute to report this to the CSE and SEC. If long time has been spent, sometimes it may difficult to take actions. Today an officer of CSE said if they received many complaints about a broker, they cancel their license as soon as possible. Smile

Kithsiri · 6 Re: Views needed Sun Sep 04, 2011 8:49 pm

Kithsiri

Senior Vice President - Equity Analytics

Posts : 1758
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Roboticfx wrote:As I know they will allow 3 days, sometimes 4 if you have told them that you pay credited amount soon. Brokers must inform when they going to sell one's own shares. But we can see many brokers break this rule as they need.
Friends,
Don't wait a minute to report this to the CSE and SEC. If long time has been spent, sometimes it may difficult to take actions. Today an officer of CSE said if they received many complaints about a broker, they cancel their license as soon as possible.

I agree. If you think that Force Selling done was incorrect, why not report the issue but be mindful that all angle are covered from your side. Good luck and please keep the Forum informed about the progress!

Rajaraam · 7 Re: Views needed Sun Sep 04, 2011 9:15 pm

Rajaraam

Vice President - Equity Analytics

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bePositive wrote:I believe as a general rule the Broker legally can 'force sell' to recover credit, as one is required to sign papers agreeing to it when you initially open the account with the broker.

They have that rights if the client fails to settle before the due date( Depending on the broker T+5 or T+3. However you can avoid such bitter action of the broker by entering in to credit agreeement with the broker.( That is a legal document and brokers can forcely sell our shares to recover any dues if we fail to settle before the due date))