Stockal Faces Regulatory Heat as Indian Investors Suffer Over Rs 100-Crore Losses in Unauthorised US Stock Trades

An alleged cross-border trading fraud involving Bengaluru-based fintech platform Stockal Securities has left Indian retail investors facing massive capital erosion, with preliminary losses estimated to exceed Rs 100 crore. According to reports by Moneycontrol, nearly 30 retail investors discovered that their long-term holdings in leading US technology giants were liquidated without their knowledge or consent, with the proceeds immediately routed into an obscure microcap stock.

The unauthorized activity occurred on October 15, 2026. Portfolios holding blue-chip equities such as Apple, Tesla, Amazon, Alphabet, Nvidia, and Advanced Micro Devices (AMD) were abruptly dumped. The resulting cash balances were instantly redirected to purchase large quantities of Zhibao Technology Inc. (NASDAQ: ZBAO), a thinly traded Chinese firm.

The targeted Chinese stock subsequently cratered, falling almost 60% from an average entry price of $1.05 to $0.42 by October 23, 2026, wiping out substantial investor wealth.

Anatomy of the Liquidations

In one documented grievance, a senior executive at a leading Indian beverage company reported that 10 major US holdings were liquidated without authorization, yielding gross proceeds of $335,768 (approximately Rs 3.19 crore). The entire capital was diverted into a single order for 3,00,000 shares of Zhibao Technology, resulting in an estimated capital loss of roughly $450,000 (Rs 4.26 crore). The investor noted that typical trade confirmation alerts were absent during the mass sell-off.

Another affected investor, who spoke on condition of anonymity, stated that securities worth $3.1 million (around Rs 29 crore) were liquidated from their Stockal account in just two minutes, followed by the purchase of 30.5 lakh shares of the illiquid counter within 15 minutes, with zero verification or holding delays.

Dispute Between Intermediaries

The episode has exposed regulatory vulnerabilities in platforms facilitating overseas investments under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS). It has also ignited an acrimonious blame game between Stockal and its US-based carrying broker, DriveWealth LLC.

DriveWealth, in communication with an affected investor, contended that unauthorized third-party access originated in the user's interface with Stockal, asserting that security lapses belonged to the Indian platform and that DriveWealth was not at fault. Conversely, Borderless—Stockal's parent entity—maintained that internal reviews found no evidence of a platform-level data breach or architectural compromise, suggesting that user credentials may have been obtained through phishing or social engineering campaigns.

Meanwhile, domestic brokerage firm HDFC Securities clarified in a stock exchange disclosure that its operational tie-up with Stockal for the "globalinvesting.in" portal concluded in July 2024 and emphasized that it is not named among the accused in the police case.

Where Affected Investors Can Lodge Complaints

Given the cross-border architecture of modern foreign investing apps, Indian investors caught in the fraud have avenues of recourse across Indian and American regulatory bodies:

• SEBI SCORES Portal: Stockal Securities is an entity registered with the Securities and Exchange Board of India (SEBI). Aggrieved investors can file complaints against the platform through the SEBI Complaints Redress System (SCORES 2.0). Intermediaries are obligated to address grievances within specified regulatory timeframes.
• National Cyber Crime Reporting Portal and Police FIR: Investors can lodge formal complaints at cybercrime.gov.in and file a First Information Report (FIR) under relevant sections of the Bharatiya Nyaya Sanhita and the Information Technology Act. A primary FIR has already been registered with the Bengaluru Police naming the platform entities.
• US Securities and Exchange Commission (SEC): Because the actual trade executions and asset custody occurred on US exchanges through an SEC-registered entity (DriveWealth), complaints regarding market manipulation and unauthorized trading can be submitted directly via the SEC's Office of Investor Education and Advocacy.
• Financial Industry Regulatory Authority (FINRA): DriveWealth is a FINRA-regulated US broker-dealer. Investors can submit an Investor Complaint directly to FINRA's regulatory enforcement wing and explore FINRA arbitration mechanisms to seek recovery of unauthorized trading losses.

Critical Evidence to Preserve

To establish unauthorized execution and pursue claim recovery, investors must secure comprehensive digital documentation:

• Historical Portfolio Statements: Monthly account statements, holding summaries, and tax statements from prior months proving legitimate ownership of blue-chip US stocks.
• Transaction Records and Audit Trails: Order logs, contract notes, and execution timestamps from October 15, 2026, detailing exact sale times, asset prices, and counterparty routing.
• Email and Security Logs: Complete email headers and inbox logs showing the presence or absence of trade alerts, two-factor authentication (2FA) requests, IP login notifications, or unauthorized email address modification requests.
• Correspondence Records: All email exchanges, support tickets, and chat logs with Stockal, Borderless, and DriveWealth customer representatives.