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Nearly 30 Indian investors trading in US equities have accused fintech platform Stockal Securities of liquidating blue chip holdings from their portfolios without authorization and redirecting the capital into a thinly traded Chinese firm. Preliminary assessments provided by affected account holders indicate cumulative financial losses exceeding 100 crore rupees following the suspicious market activity recorded on October 15. The unauthorized sell-offs targeted prominent technology equities including Apple, Nvidia, Amazon, Tesla, Alphabet, and AMD. The entire proceeds were immediately used to acquire massive positions in Zhibao Technology Inc., whose market valuation subsequently collapsed by roughly 60 percent.
Massive Liquidations and Sharp Market Losses
Individual accounts sustained heavy losses within minutes as large volumes of prominent shares were systematically cleared out. One individual reported that 10 US stocks were liquidated without consent, generating 335,768 dollars which was immediately diverted into 300,000 shares of Zhibao Technology. That investor calculated a net capital erosion of about 450,000 dollars, representing approximately 4.26 crore rupees, and has filed regulatory grievances with both the Securities and Exchange Board of India and the US Securities and Exchange Commission.
In another instance, US securities valued at approximately 3.1 million dollars, or around 29 crore rupees, were sold off without authorization. Within a window of just 15 minutes, 3.05 million shares of Zhibao Technology were acquired through the account without the mandatory user verification protocols. The subsequent decline of Zhibao shares exacerbated the damage, as the stock plummeted to 0.42 dollars on October 23 against an average entry price of 1.05 dollars cited by an affected party.
Platforms Trade Blame Over Systemic Breach
The controversial trades have triggered a dispute between the platform and its foreign brokerage associate regarding culpability and platform security. Stockal stated that an internal inquiry is actively underway, indicating that compromised customer credentials or phishing schemes may have enabled the unauthorized access. The platform affirmed that internal diagnostic checks revealed no technical breach across its own core systems.
Conversely, US brokerage partner DriveWealth dismissed claims of responsibility in formal communication issued on October 30. The brokerage maintained that the intrusion originated directly through the interface connecting clients to Stockal, pointing to defensive lapses on the domestic fintech platform. DriveWealth also stated that Stockal directed it to freeze compromised portfolios, while asserting that repeated alerts had been issued concerning continued market risk tied to the unapproved equity allocations.
Regulatory Complaints and Police FIR Filed
Legal actions have commenced across jurisdictions as investors seek accountability and restitution for the unauthorized transactions. An affected investor filed a formal First Information Report in Bengaluru naming Stockal, its associated corporate entities, US partner DriveWealth, and intermediary HDFC Securities. Parallel complaints have reached regulatory authorities in both India and the United States to establish the failure points in transaction monitoring.
The ongoing inquiries will determine whether the multi-crore transactions stemmed from individual credential harvesting, platform vulnerability, or external manipulation. As both brokerage intermediaries continue to trade blame, affected market participants remain without clarity regarding financial recovery or ultimate legal liability.
