Nearly 30 Indian investors allege their US stock portfolios were liquidated without consent on Stockal. Their blue-chip US holdings were allegedly replaced with thinly traded shares of Chinese microcap Zhibao Technology. Reported losses from the October 15 incident now exceed ₹100 crore, raising questions on cross-border platform security.
How We Got Here
Founded in 2016, Stockal enables Indians to invest in US stocks, having raised over $15 million from investors like HDFC Securities. The platform partners with US brokerage DriveWealth to facilitate these overseas investments.
The Numbers
- Borderless, Stockal's parent, states 26 accounts were accessed by an unauthorised third party using valid login credentials.
- In 13 accounts, large-cap US equities were sold and microcap securities purchased, Borderless reported.
- One investor reported $3.1 million (₹29 crore) of securities sold in 2 minutes, followed by 30.5 lakh Zhibao shares bought in 15 minutes.
- An FIR has reportedly been registered in Bengaluru, escalating the dispute to legal channels.
- DriveWealth claims the incident occurred on Stockal’s app, while Borderless says it found no evidence of a breach of its own systems.
What Happens Next
🇮🇳 Why This Matters for India
For retail investors in Hyderabad and Pune eyeing global diversification, this incident throws a harsh spotlight on the security and recourse available with cross-border trading platforms.
The Take
This issue highlights the precariousness of trusting third-party integrations with sensitive financial access. Expect other cross-border platforms to quietly review their API security and partner liability clauses within the next 90 days.
Source:
Inc42 ↗