Nearly 30 Indians lose over Rs 100 crore as US stock holdings sold without consent
Bengaluru: Nearly 30 Indian retail investors have lost more than Rs 100 crore after their US stock holdings were sold without their authorisation through fintech platform Stockal Securities, with the proceeds used to buy shares of little-known companies, according to a report by Moneycontrol.
The alleged transactions took place on October 15, 2026, when investors' holdings in major US companies, including Apple, Tesla, Amazon, Alphabet, Nvidia and AMD, were liquidated without their consent. The money was then allegedly channelled into purchases of relatively obscure stocks, exposing investors to heavy losses as their prices declined.
The incident has triggered a dispute between Stockal and its US-based clearing broker, DriveWealth, over how the unauthorised transactions occurred and who should be held responsible.
Moneycontrol reported that the preliminary loss estimate of over Rs 100 crore is based on information shared by two affected investors. The actual losses could be significantly higher.
How investors' US stock portfolios were liquidated
One of the affected investors, a senior official at a leading beverage company in India, told Moneycontrol that 10 of his major US stock holdings were sold without his permission.
The holdings included shares of Apple, Tesla, Amazon, Alphabet, Nvidia and AMD, which were liquidated for a total of $335,768.
The proceeds were allegedly used to place a single order for 3,00,000 shares of Chinese company Zhibao Technology Inc., traded under the ticker ZBAO. The shares were purchased at an average price of $1.05 each.
ZBAO's stock price subsequently fell nearly 60%, closing at $0.42 on October 23.
The investor estimated his losses from the transactions at around $450,000, or Rs 4.26 crore. He also questioned why he had not received the usual trade confirmations or alerts for the unauthorised transactions.
According to him, Stockal's parent entity, Borderless, contacted him only on October 18, acknowledging suspicious account activity on October 15 and informing him that DriveWealth had restricted activity.
The investor has filed a complaint with the Securities and Exchange Board of India (Sebi) and approached the US Securities and Exchange Commission (SEC), seeking intervention.
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Another investor alleges $3.1 million portfolio was sold
Another investor, who spoke to Moneycontrol on condition of anonymity, alleged that securities worth $3.1 million (around Rs 29 crore) in their Stockal account were sold without authorisation.
The investor claimed that the entire portfolio was liquidated in just two minutes and replaced with 30.5 lakh shares of a thinly traded stock. The purchases were completed within 15 minutes, allegedly without any holding period, alert or verification.
The investor said the account had not been restored and the losses had not been reimbursed.
An FIR has been registered in Bengaluru, naming DriveWealth LLC, Stockal Securities, Borderless Softech Private Limited and Borderless Investing Inc.
Stockal suspects phishing or social engineering
The exact method through which the accounts were accessed and the trades were executed remains unclear.
Stockal told Moneycontrol that the circumstances and mechanism of the activity were under investigation. Its initial assessment suggested that a customer's email account and, consequently, their credentials may have been compromised through social engineering or phishing.
The company also said it had not found evidence of a breach of the Borderless/Stockal platform based on the review conducted so far.
The explanation has not established how the unauthorised trades were carried out or who accessed the investors' accounts.
DriveWealth blames Stockal over account security
The incident has also led to a dispute between Stockal and DriveWealth, the US-based clearing broker that executes trades and holds assets in custody for the platform.
In a letter sent to an affected investor on October 30, DriveWealth said the unauthorised third-party access had occurred through the investor's interface with Stockal. It maintained that any security lapses relating to the platform were Stockal's responsibility and that the activity had not originated at DriveWealth.
DriveWealth said Stockal had instructed it to freeze the affected account while the investigation continued. It claimed that it followed the instruction but repeatedly warned Stockal that leaving the positions unchanged could expose investors to further market losses.
The US broker also alleged that some initial corrective measures were paused on Stockal's explicit instructions. It said repeated attempts to establish whether Stockal had contacted the affected investor had not received confirmation.
DriveWealth criticised Stockal's handling of the incident, saying it had received conflicting instructions and that the matter was not being addressed with the urgency required.
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What is HDFC Securities' link to Stockal?
Stockal is a Bengaluru-headquartered fintech platform registered with Sebi that enables Indian retail investors to trade in US stocks, exchange-traded funds (ETFs) and other overseas securities.
It offers an India-facing app for funding accounts, trading and tracking portfolios, while working with US-based clearing brokers such as DriveWealth to execute trades and hold assets.
The affected investors had been introduced to Stockal through HDFC Securities, which partnered with the platform in 2019 to launch globalinvesting.in. However, the operational global investing partnership between the two companies ended in July 2024.
With the investigation still under way, questions remain over how the investors' accounts were accessed, how the unauthorised trades were approved and who will compensate those affected. The investors are seeking the restoration of their holdings and recovery of their losses.