Investigation of trading losses and potential misrepresentation

The client - a group of investors - had lost their principal equity investments due to secondary market trading losses (derivatives and equity segment). The investments of the group were being managed by a wealth management firm. The investors believed that the statement of profits/loss provided by the wealth management company was inconsistent and wanted to conduct an independent investigation.

The information available with the customer was limited, leading to overall transactional trends across investors, customer balances and instruction communication on investments.

We conducted an analysis to evaluate indications of foul play on the part of the wealth advisor and any diligence lapses on the part of investors.

We thoroughly investigated all information available and we were able to consolidate evidences in the nature of documentation inconsistencies, transactional trends, key exceptions, timeline of events and related evidences in the form of a report for legal counsel’s consideration.

Nexdigm (SKP) conducted an analysis to evaluate indications of foul play on the part of the wealth advisor and any diligence lapses on the part of investors. We investigated all the information available and we were able to consolidate evidences in the nature of documentation inconsistencies, transactional trends, key exceptions and timeline of events.

We noticed uninformed investment/liquidation of equity shares retained as a margin by the wealth advisor. Nexdign (SKP) also found inconsistent trends of derivative investments, including transactions not being aligned to active market trades and indications of uninstructed investments on behalf of the investors. Our findings were extensively documented and presented for the Legal Counsel’s consideration.