Stockal trading fraud: HDFC Securities clarifies it is not named in FIR, says partnership ended in 2024

HDFC Securities has issued a clarification following reports of alleged unauthorised trading involving Stockal Securities, now rebranded as Borderless, stating that it has not been named among the accused in the FIR related to the incident.

The brokerage also emphasised that its operational partnership with Stockal had ended in 2024, distancing itself from the transactions currently under investigation.

"We have seen the recent report referring to Stockal and the FIR. To set out the facts," HDFC Securities said in a statement.

"The report itself notes that HDFC Securities is not named among the accused in the FIR," the company said, adding that its operational partnership with Stockal ended in 2024.

Reaffirming its commitment to regulatory standards, the brokerage said, "Customer trust and regulatory compliance are central to how we operate."

It further stated that it would continue cooperating with regulators and relevant authorities as required and provide additional updates where appropriate.

What is the Stockal trading controversy?

The clarification comes amid allegations that several Indian investors using Stockal's platform discovered unauthorised transactions in their US stock portfolios on October 15.

According to reports, holdings in major US companies were allegedly liquidated without investors' consent, with the proceeds subsequently invested in thinly traded microcap securities. Potential investor losses have reportedly been estimated at nearly ₹100 crore.

Stockal, a Bengaluru-based fintech registered with SEBI, facilitates overseas investments through partnerships with US brokers, enabling Indian investors to purchase shares and fractional holdings in companies such as Apple, Amazon, Microsoft and Nvidia.

What has Stockal said?

Borderless acknowledged that 26 customer accounts appeared to have been accessed using valid login credentials. Of these, 13 accounts witnessed unauthorised transactions involving the sale of large-cap US equities and purchases of illiquid securities.

However, the company maintained that no funds were withdrawn from the affected accounts.

Borderless said its investigation had found no evidence of a breach of its platform, infrastructure or internal systems.

It suggested that affected customers may have been targeted through social engineering linked to an earlier third-party data breach, although this remains unconfirmed.

The fintech has engaged independent cybersecurity specialists and is coordinating with US brokerage partner DriveWealth to investigate the transactions and explore possible resolutions.

The controversy has renewed concerns over cybersecurity safeguards, investor protection and accountability in overseas investment platforms.