Firstlead Securities accused of defrauding investors by selling shares

Investors on Tuesday alleged that Firstlead Securities swindled its clients out of around Tk10 crore by using fake software even though the transactions of the brokerage firm on the Chittagong Stock Exchange were suspended. 

The investors said the brokerage firm sold shares without informing them and they have not even received any proper response from the stock exchange or the Bangladesh Securities and Exchange Commission (BSEC) in this regard.

Jhunu Chowdhury, managing director of Firstlead Securities, has ruled out the allegations of defrauding its clients.

"It is not possible to sell shares using a duplicate software and cheat investors when the transaction is suspended," he told The Business Standard.

The company's activities have been suspended since March 2021. But, investors claim that the brokerage house continued to make fake transactions through a separate software till 6 February this year.

Jhunu Chowdhury said, "Transactions have been suspended for more than a year, so transactions cannot be done through separate software. However, the in charge of the Dhaka branch office has caused some problems. We are looking for him, but yet to find him."

"We are trying to identify what happened to the investors. There is also a problem in a branch in Chittagong. Those who worked have sold shares. Most of that has been solved," he added.

Investors' complaints 

In a written statement on behalf of the investors, Md Ayub Khan alleged that the chairman and managing director of Firstlead Securities had sold all the shares of at least 30 investors at its Dhaka office.

However, he said, they never received any SMS or mail regarding the sale of the shares.

Speaking at a press conference at the auditorium of the Capital Market Journalists Forum (CMJF) in Dhaka, the investor said even though the firm was closed, he used to trade shares through the company.

"On 20 January this year, I applied to the chief regulatory officer of the Chittagong exchange for the transfer of my shares. Although a long time has passed, no shares have been transferred,"  the investor alleged.

"I have complained to the regulatory body but did not receive any good response. However, the Central Depository Bangladesh Limited (CDBL) has informed us that we do not have any shares in our BO accounts," he added.

He said, "We have lost everything due to the embezzlement by the company. We are in a severe financial crisis. Now we call upon the prime minister and the BSEC chairman to intervene in the matter so that we get our money or shares back at the quickest possible time."

Responding to a question from journalists, Md Ayub Khan said that even though the activities were stopped in 2021, the brokerage house was open till 6 February this year.

"I have personally traded shares. I also took money from the company. However, the matter came to light after the company was locked down on 6 February," he added.