Embezzlement of Tk 1.61b
Moshihor Securities to face actions under laundering act
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The securities regulator has asked the Anti-Corruption Commission (ACC) to take actions against Moshihor Securities under the Money Laundering Prevention Act over the largest financial fraud in the history of the capital market.
The brokerage firm is accused of embezzling Tk 1.61 billion from investors. Of the amount, Tk 685.8 million was allegedly misappropriated from the consolidated customer account (CCA), while Tk 923.5 million was siphoned off by selling shares of clients.
The Bangladesh Securities and Exchange Commission (BSEC) has also written a letter to the ACC to get a travel ban on individuals responsible for the scam so that they cannot flee the country. The firm's directors and officials had allegedly collaborated to defraud clients.
Additionally, Bangladesh Financial Intelligence Unit (BFIU) has been notified to freeze the bank accounts of the owners and key officials of Moshihor Securities.
Spokesperson of the market watchdog Abul Kalam confirmed the moves taken by the BSEC against the stockbroker.
An investigation had unveiled the scam involving the brokerage firm.
In August last year, an inspection team of the Dhaka Stock Exchange (DSE) discovered a deficit of Tk 685.8 million in the consolidated customer account of Moshihor Securities Limited.
It also found that shares worth TK 923.5 million had been sold from investors' portfolios without informing the rightful BO account holders.
The findings were reported to the commission and then the BSEC separately formed a five-member investigation committee to look into the illegal activities of the firm.
The committee, comprising BSEC and DSE officials, as well as a representative from the Central Depository Bangladesh Limited (CDBL), examined client accounts, back-office software, authorized trading terminals, and negative equity. They also checked whether more than two BO accounts had been opened using the same mobile number, email, or bank account, and whether any unauthorized transactions were made by the firm's directors or employees.
Meanwhile, on April 10 this year, clients of Moshihor Securities held a press conference at the Capital Market Journalists Forum (CMJF) in the capital.
Investors, who lost money, appealed to the chief advisor, financial advisors, and relevant authorities for the recovery of their funds. They also demanded punishment of corrupt officials of Moshihor Securities, DSE, and BSEC.
Investors alleged that Moshihor Securities had used back-office software to send fake portfolio reports to clients via email, mimicking actual portfolios to avoid detection of the embezzlement. The broker had also changed clients' mobile numbers to intercept confirmation messages from the CDBL.
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