On Wednesday, the Enforcement Directorate announced the filing of a new chargesheet in the money laundering investigation connected to National Spot Exchange Limited (NSEL).

The federal agency said in a statement that 19 broking firms and their directors were the target of a prosecution complaint brought on January 28 before a special Prevention of Money Laundering Act (PMLA) court in Mumbai for allegedly conspiring with NSEL officials to entice investors to trade on this platform. On February 3, the court declared that it had taken cognizance of the chargesheet.

As part of its investigation, the CBI previously filed six chargesheets against 94 defendants and attached assets valued at Rs 3,288 crore. According to the ED, it was discovered that broking firms deceived their customers by making false promises regarding the exchange and pushing illegal pairs trading contracts after registering with the NSEL.

NSEL set up a system that avoided collecting warehouse receipts or tangible goods for its clients in conjunction with broking firms, knowing that they were enabling trades in this way, the agency claimed.

In order to attract investors into trading on the NSEL platform with the promise of large profits, the brokerage firms conspired criminally with the NSEL to defraud the investors through a fraudulent scheme.

According to the agency, the defendants in the aforementioned case formed a criminal conspiracy to defraud investors, persuaded them to trade on the NSEL platform, produced forged documents such as fake warehouse receipts and accounts, and ultimately committed criminal breach of trust against approximately 13,000 investors totaling Rs 5,600 crore.