Defrauded investors to receive Tk25cr from protection fund

The securities regulator has directed the Dhaka Stock Exchange (DSE) to pay Tk25 crore as the first-phase claim settlement to the defrauded clients of four brokerage houses that embezzled investors' money.

The brokerage houses are Tamha Securities, Banco Securities, Crest Securities, and Shah Mohammad Sagir & Co Limited, and the total claim of their defrauded clients is nearly Tk200 crore.

For receiving complaints, 1 October 2023 has been considered as the cut-off date. The Dhaka bourse's trustee board will transfer the Tk25 crore to the DSE Investor Protection Fund.

This is the first time the fund, which was formed a decade ago, will be used.

Earlier, the Bangladesh Securities and Exchange Commission (BSEC) decided to settle defrauded customers' claims with the money available in the protection fund.

If the embezzled money were recovered from the four brokerage houses, it would be submitted to the protection fund.

In June this year, the BSEC formed an inquiry committee to look into the DSE Investor Protection Fund.

The committee had 60 days to check if the money that was supposed to have been in the protection fund, was actually deposited and protected there.

DSE Spokesperson M Saifur Rahman Majumdar earlier told The Business Standard, the stock exchange will disburse this money as per BSEC directives.

The DSE is working sincerely on how to use the fund to protect the investors, he added.

On Monday, the BSEC finally issued an order to the bourses in a move to prevent further embezzlement of investors' funds by brokerage houses using back-office software.

The back-office software of a brokerage firm is where information on investors' money, shares, transactions, cash balance, and deposit balance are preserved.