This article explores how stock brokers manipulate the client’s accounts in order to save his own tax liability.
How do the brokers manipulate can be explain herein, the brokers would show their own trades or trades of their proprietary trading accounts under the codes of less attractive clients. By doing this they are able to manipulate the profit positions of the day trader and hence reducing their tax burden. These transactions occur without the authorization of the clients.
Such manipulation was unearthed by income tax department and has the potential of Rs. 800 Crore tax evasion.
Investors have made complaints, stock exchange and Sebi needs to take note of these practices and introduce real-time alerts to investors. Real time alerts can be like a SMS being sent to the investor whenever any trade is done or being executed in his account.
© Tarun Mitra
This article draws its data from the article “The Art of Manipulation” by Rajesh Gajra appeared on Page 15 of Businessworld magazine, Volume 29 Issue 5, For the week 16-22 June 2009, Released on 15 June 2009