Spare 5 minutes – save your fund & friend – don’t trade in commodities in Multi Commodity Exchange / Broking Firms:
I had deposited rs.1 lac with orion broking services, coimbatore for trading in commodities and on 19th aug’15 the said broking firm absconded and closed their operations by squaring off (Looting) the entire deposit amount of rs.4.18 crores of 596 traders under the guidance of mcx. The true incident is briefed under to inform the general public not to trade in commodities in mcx / broking firms:
Multi commodity exchange ipf trust had given only 54.73% of the total amount deposited with orion broking services, coimbatore that too, only after 17 months from the date of issuance of arbitral award given by the arbitrators (Retd. Judges) and in the meanwhile mcx had made lot of dramas by prolonging the settlement by announcing the said broker as expelled and as well as defaulter inbetween all these 17 months.
Mcx ipf trust has informed us that as per rules, bye-laws of the exchange we will get our full deposit amount shortly in their communications and also that the arbitrator (Retd. Judge) who had conducted the arbitration proceedings also confirmed that we will get atleast our hard-earned full deposit amount with the said broking firm. But to our surprise they invoked section 12a of the exchange rules and given only 54.73% of deposited amount with the said broking firm i. E. For rs.1 lac they have given me only a compensation amount of rs.54, 730/- along with an indemnity bond format for claiming the compensation amount (Indirectly forcing depositors to accept the said amount as full & final amount), which states that if the affected depositor claims the said compensation, then there is no legal option available with the said depositor that too after almost 18 months from the date of issuance of arbitral award given by the arbitrator (Retd. Judge) through mcx.
Finally, after two and half years, i received a letter from mcx ipf trust since i have not gone for an appeal on the abovesaid arbitral award they had given another 2.16% (Apx.) i. E. 2, 160, so totally i received only 56, 890/- and mcx have looted rs.43, 110/- of my hard-earned money.
By finally giving the above 2.16%, the mcx is also releasing legally the barred managing director of orion broking services johnson p. Jose (Ex-employee of mcx) and his associates to do future financial market business with some other name and mcx will enthuse these kind of fraudsters to be in the financial market for the benefit of getting commodity transaction tax (The reasons best known to you). Also assets worth more than rs.1 crore of the md of orion broking was ceased by the police officials by dec’16 itself and the same should be refunded to the affected traders on a pro-rata basis (Atleast to those who are having arbitral award).
Also it is shocking that only maximum limit of rs.2 lacs as compensation will be given by the investor protection fund to the depositor and one of the trader based at coimbatore invested rs.15 lacs as deposit with the said broking firm and he had received rs.2 lacs only as aforementioned and the balance amount of rs.13 lacs, mcx has withheld the money stating that it is as per rules, bye-laws of the exchange. He got heart attack after receiving the compensation letter from mcx ipf trust and died within two days. I had a discussion with the wife of the demised depositor also and the reason stated by the wife is that for tax purpose only, they have deposited the amount for trading in the said broking firm.
Please note that only rs.2 crores is the maximum limit that mcx ipf trust is giving to any broking firm and the same happened in the instant case of orion broking services also (The following details were taken from mcx site itself, as under:
Total no of claim – 738
Total dismissed – 142 (During arbitration proceedings)
Total arbitral award cases – 596
Total deposit amount made
In orion broking services by
596 traders excluding
Dismissed cases of traders – 4.18 crores
By mcx ipf trust – 2.00 crores
Balance rs.2.18 crores (Belongs to 596 traders) looted by orion broking services under the guidance of mcx and we even taken up the matter with sebi also, but no action was taken by sebi eventhough sebi is getting service charge of maximum rs.2 per trade for each and every trade done by the traders in the commodity market since sept’2015 itself.
Also don’t fall prey into any training classes in regard to commodity trading and the intraday market will not fix into any kind of available indicators since if you are taking a position all these indicators won’t help you since the mcx trading terminal is having entire buy and sell trades of the traders then and there and the only motive of the trading terminal is to hit the stop loss placed by the traders both on buy as well as on the sell trades and inturn mcx will get profits always since we are trading with our precious sentiment (Money).
Also if you put buy (Or) sell trade by having sufficient full amount then also your order will not be taken up by the exchange and the reason is that the broking firm sometimes won’t pay their daily commodity transaction dues to the exchange and the same will happen between 12.30 to 1.00 p. M. On any day by showing “don’t execute fresh orders” and that itself is the first sign that the particular broking firm is going to abscond and mcx won’t care about all these, since they are hand-in-glove with the particular broking firm.
Also there is no assurances for our deposit amount with the broking firms (Only 50% deposit amount will be compensated to the trader, if particular broking firm absconding) and the same is mentioned in the trading ac opening form itself and moreover we have accepting for the same by acknowledging the said clause also. Hence, we cannot file legal case with mcx also and we have been trapped at opening a trading account with the broking firm itself.
Latestly also, lot of broking firms are absconding from the said commodity trading business and absolutely there is no control by mcx. So as a public, we should keep greater distance with these kind of exchanges and save your hard-earned money, henceforth.
Don’t believe in arbitration proceedings conducted by mcx and the same is only done to prolong your claim process and they will give you only 50% deposit amount (Approx) as mentioned in the ac opening form.
Eventhough, mcx is looting traders deposit always alongwith the connivance of broking firms, without any ethics they are mentioning “trade with trust” in their logo (Banner).
If a trader commits a loss, mcx will auction even his/her property to claim the loss amount, but if a broking firm commits default due to improper control of the mcx, then also, we are at the receiving end.
Beware! Avoid trading in mcx or else no one even sebi won’t help you and inturn you will lose your entire hard-earned money and please note that there is no short-cuts in developing one’s standard of living.