The Bangladesh Securities and Exchange Commission (BSEC) has unveiled a comprehensive strategy to recover investors’ funds embezzled by stockbrokers amid longstanding scams, officials said.
The BSEC has directed the Dhaka Stock Exchange (DSE) to settle small investor claims using brokers’ funds or assets held with the bourse.
For larger claims, the regulator is seeking legal opinions to engage law enforcement agencies in recovering funds and holding brokers accountable.
Embezzlement by brokers remains a persistent issue. Major scandals have involved Crest Securities, Tamha Securities, Banco Securities, Shah Mohammad Sagir & Company, and Mashihor Securities.
In the latest case involving Mashihor Securities in August last year, over Tk 1.68 billion was misappropriated. Travel bans on its top executives proved ineffective.
The BSEC cannot file criminal cases on behalf of investors but can act against securities law violations. It recently urged the Anti-Corruption Commission (ACC) to pursue legal measures. Some cases have been filed, though legal complexities have delayed resolutions. In one instance, a lower court’s asset seizure order against Tamha Securities was overturned after an appeal from a creditor bank.
Since 2019, brokers have embezzled over Tk 2 billion. The DSE refunded Tk 300 million to investors of four suspended brokerage firms over two phases. Brokers misappropriated funds by exploiting consolidated customers’ accounts (CCAs) through cash payee cheques or misusing clients’ deposits.
BSEC Executive Director Md Mahbubul Alam stressed investor involvement: “Many cheques bounced, but clients didn’t file cases.”
