1. TRG Case - Intentional Loss through Trader Change: In the TRG case, it was observed that KSL/KASB/Ktrade intentionally caused a loss to their client by unilaterally changing the client's trader without any prior notification. This action directly impacted the client's trade, leading to an unnecessary and preventable financial setback of PKR 451,500.
2. PIOC Case - Loss through Unauthorized Trade Stopping: In the PIOC case, KSL/KASB/Ktrade deliberately caused a loss to their client by sending an email to Babbar Hanif, instructing the cessation of trade, again without notifying the client. This unexpected intervention in the trading process highlights a serious breach of protocol and client trust. Client lost PKR 640,830
3. Unauthorized Trades by KSL/KASB/Ktrade: There have been instances where KSL/KASB/Ktrade executed unauthorized trades in a client's account. This unauthorized activity not only breaches the trust between the client and KSL but also exposes the client to unforeseen financial risks and liabilities. Client lost estimated PKR 750,000
4. Excessive Account Exposure: KSL/KASB/Ktrade has been noted to increase account exposure limits up to 10X, significantly exceeding the allowed 2X limit, without seeking consent from the client. This overextension poses a grave risk to the client’s financial stability and contravenes established trading norms. Client lost estimated PKR 1200,000
5. Trading via WhatsApp: It has been witnessed that trades with KSL/KASB/Ktrade were conducted through WhatsApp. This unconventional and informal method of trading lacks the necessary security and formal record-keeping, potentially leading to disputes and misunderstandings.
6. Losses Due to Order Stuck in System: Clients have experienced substantial losses due to the order stuck issue in KSL's trading system. This technical flaw in the system not only hinders smooth trading operations but also leads to financial losses for the clients due to delayed or unexecuted orders. Client lost estimated PKR 850,000
7.  Losses Due to Unauthorized Trades in the Ready Market: On the 20th of December, 2023, KSL/KASB/Ktrade conducted additional unauthorized trades in the ready market on behalf of a client, a move that resulted in a staggering loss exceeding 5 million. This action, taken without the client's consent or knowledge, not only represents a serious breach of trust and professional ethics but also led to significant financial damage. Such unauthorized activities raise critical concerns about the integrity of KSL's trading practices and the need for stringent oversight to protect clients from unwarranted financial exposure. Client lost additional 2,450,000+

The real question that emerges is whether there is a potential role to play in preventing a repeat of the Master Securities scenario, thereby protecting the investors of PSX. Considering the current troubling investing trends in PSX and KSL's contributions to these issues, it becomes imperative to evaluate and implement strategies that safeguard investor interests and ensure a stable, transparent, and reliable trading environment.

Brokerage houses that are found guilty of making false claims or engaging in fraudulent activities face serious consequences under the regulatory framework enforced by the Securities and Exchange Commission of Pakistan (SECP) and other relevant authorities. The punishments for such violations can include:

Monetary Fines: Brokerage houses may be subject to substantial fines. The amount can vary depending on the severity and extent of the fraud or the false claims made.

Suspension or Revocation of Licenses: The SECP has the authority to suspend or revoke the licenses of brokerage houses found guilty of fraudulent activities. This can effectively halt their operations and prevent them from engaging in securities trading or other related activities.

Criminal Charges: In cases where the false claims constitute a criminal offense, individuals involved may face criminal charges, leading to legal proceedings. If found guilty, this can result in imprisonment, in addition to financial penalties.

Restrictions on Operations: The SECP may impose certain restrictions on the operations of the brokerage house, which could include limitations on trading activities or stricter regulatory oversight.

Compensation Orders: Brokerage houses may be ordered to compensate investors or clients who suffered losses due to their false claims or fraudulent activities.

Censures and Warnings: In less severe cases, the SECP may issue censures or formal warnings as a reprimand for the misconduct, which can impact the reputation and credibility of the brokerage house.

Mandatory Compliance Training: The SECP may require the brokerage house and its employees to undergo compliance training to ensure better adherence to legal and ethical standards in the future.