Is sub broker be liable for the loss incurred by the client in mcx or ncdex ?

ARK (Querist) 02 August 2012 This query is : Resolved
My friend was a sub broker of a very well reputated company of MCX. But Last 6 months back his clients made a debit of 5 lacs in the accounts and unable to pay the loss. Now the company has sent my friend(sub broker) notice to pay the loss incurred by the client in a week.If he wont pay the debit in 7 days from the day of letter receieved he will be additionally charged 18 % per annum interest. My friend is saying that its the duty of the Company's Risk management to take care of the debits and credits. Now what to do??? Please suggest. . .

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Guest (Expert) 02 August 2012
If your friend failed to carry our specific instructions of the client, definitely the MCX broker is liable to bear with the loss incurred to the client. Alternately, the broker can also hold your friend liable for the said loss, if justified on the part of the client.

However, if your friend had been quite careful in making transactions of the client strictly according to the instructions of the client, the claim of the client would not be justified. So, your friend should ask the MCX broker to give justification for claiming loss from your friend.

Raj Kumar Makkad (Expert) 03 August 2012
This is your repeated query so refer to reply of your similar query.

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