Haji Ahmad Brothers Securities Penalised Over Client Fund Shortfall

The Bangladesh Securities and Exchange Commission (BSEC) has fined Haji Ahmad Brothers Securities Tk 1 million for violating securities regulations by creating deficits in clients’ funds.

The penalty followed hearings held in May based on investigation findings submitted by the Dhaka Stock Exchange (DSE), according to a BSEC order issued on August 10.

BSEC Executive Director and spokesperson Md Abul Kalam said deficits in consolidated customers’ accounts (CCA) constitute a serious regulatory violation. He said the action was aimed at protecting investors, strengthening market discipline and holding violators accountable.

A DSE investigation found that Haji Ahmad Brothers Securities had withdrawn cash from its CCA and maintained multiple beneficiary owner (BO) accounts using identical mobile numbers, email addresses and bank accounts.

The brokerage recorded CCA deficits on several dates in 2024, including Tk 1.18 million on June 13, Tk 3.9 million on July 18, Tk 3.24 million on August 8, Tk 2.37 million on September 2 and Tk 2.85 million on September 3.

A CCA is a broker’s bank account used exclusively to receive investors’ funds for share purchases and to pay them their proceeds. Any deficit can trigger regulatory measures, including fines, suspension of trading rights or cancellation of licences.

Following the DSE inspection, the BSEC Enforcement Department called the brokerage for a hearing in April. In a written response submitted on May 11, the company said it had deposited Tk 3 million into the CCA after its balance fell short by about Tk 2.6 million, restoring the account to a positive balance.

The BSEC rejected the explanation, finding the violations punishable under Section 22 of the Securities and Exchange Ordinance, 1969 and Section 18 of the Bangladesh Securities and Exchange Commission Act, 1993.

The commission has ordered the brokerage to pay the fine within 30 days of August 10 through a bank draft or pay order in favour of the BSEC. Failure to comply could result in further legal action.

Multiple BO accounts

The DSE investigation also found that the brokerage maintained multiple BO accounts belonging to the same clients.

For example, one email address was linked to 16 active accounts, while another was associated with seven active accounts.

The brokerage said some of the accounts were legacy accounts opened before the introduction of current KYC and control procedures. It said it had updated around 255 such accounts over the past two years and was continuing the correction process.

The firm argued that the irregularities stemmed from procedural and interpretational shortcomings rather than any malicious intent or misuse of client assets. The BSEC rejected the explanation.

Wider concerns over client fund management

The case highlights persistent concerns over the mismanagement and alleged misappropriation of client funds in Bangladesh’s brokerage sector.

Several brokerage scandals between 2019 and 2026—including Salta Capital, Moshihor Securities, Crest Securities, Tamha Securities, Banco Securities and Shah Mohammad Sagir & Company—have collectively affected investors by more than Tk 6 billion.

The latest major case involved Salta Capital, where a DSE inspection uncovered alleged misappropriation of around Tk 1 billion from approximately 14,000 retail investors. Trading in all six firms involved in such cases remains suspended.

The DSE has so far refunded around Tk 300 million to investors affected by four brokerage firms—Banco Securities, Crest Securities, Tamha Securities and Shah Mohammad Sagir & Company—using proceeds from asset sales and the Investors’ Protection Fund.