SECP refers Blink Capital case to FIA over Rs446.6m alleged fraud

August 09, 2026 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has approved referring the case of Blink Capital Management (Private) Limited to the Federal Investigation Agency (FIA) for further investigation and legal action over alleged illegal deposit-taking, guaranteed-return investment schemes and a suspected Ponzi-type fraud involving claims of more than Rs446.6 million.

The action follows an SECP investigation launched after complaints from investors against Blink Capital and its management over the collection of funds from the public on promises of fixed returns and repayment of the original investment through post-dated security cheques.

Blink Capital Management was a licensed futures broker and market maker of Pakistan Mercantile Exchange Limited (PMEX), with its registered office at 13-A-3, Mian Mehmood Ali Kasoori Road, Gulberg III, Lahore, and branches in Karachi and Islamabad.

According to the SECP investigation, the company’s directors and shareholders included Hassan Maqsood, the then Chief Executive Officer, and Muhammad Farooq, a director.

The matter first emerged in June 2025, when PMEX received complaints from investors and the public alleging that Blink Capital was accepting deposits on a fixed-profit basis while guaranteeing the return of the original investment through post-dated security cheques.

PMEX subsequently took interim measures, including freezing funds and restricting Blink Capital’s market-making activity. Following an inquiry, PMEX found the broker non-compliant with the applicable regulatory framework, imposed a Rs1 million penalty and suspended Blink Capital’s trading rights. Blink Capital subsequently closed its offices and disabled its website.

As complaints continued to be received by both PMEX and the SECP, the Commission initiated a formal investigation under Section 83 of the Futures Market Act, 2016, through an investigation order dated August 15, 2025.

The SECP investigation found that 35 complainants lodged claims amounting to Rs446.664m. Of the 35 complainants, trading accounts had been opened by Blink with PMEX for only seven clients, and those accounts were inactive.

The investigation team conducted a detailed financial-trail analysis involving 29 complainants and Rs408.6 million, equivalent to approximately 91.48% of the total claimed amount. Later complaints were not included in the financial-trail analysis, although similar transactional patterns were observed.

The complainants provided documentary evidence relating to approximately Rs406.542m out of the Rs408.6m covered in the financial-trail analysis, including cash payments. The investigation team was able to trace Rs360.17m in bank accounts linked to Blink Capital, its management and associated persons.

According to the financial trail, Rs288.32m, or 80.05% of the traced amount, was transferred to Blink. Another Rs10.35m, or 2.87%, was transferred to then CEO Hassan Maqsood, while Rs500,000, or 0.14%, was transferred to Muhammad Farooq, director, and Ammara, identified as Farooq’s spouse. A further Rs60 million, or 16.66%, was transferred to an account titled Blink Capital Management, a sole-proprietorship business in the name of employee Ali Fida. Another Rs1 million, or 0.28%, was transferred to Ali Fida, the Chief Operating Officer of Blink.

The investigation noted that the funds were mostly moved into the personal accounts of then CEO Hassan Maqsood and director Muhammad Farooq. Significant amounts were also withdrawn in cash. Funds were additionally transferred to the personal accounts of Blink employees, including Rizwan, Shahid, Noaman and Ali Fida.

The investigation also observed instances where funds were transferred to complainants of Blink, apparently on account of profit payments.

The investigation team further found that approximately Rs90 million transferred to PMEX was subsequently withdrawn, with a major portion of those funds deposited into the accounts of Hassan Maqsood and Muhammad Farooq.

According to the SECP investigation, Blink Capital entered into agreements with investors, mostly for a two-year tenure, offering fixed returns on a monthly or annual basis. The promised returns ranged from 3.7% per month to 48% per annum.

The agreements were executed on stamp paper and were mostly signed by then CEO Hassan Maqsood, while in some cases they were signed by then director Muhammad Farooq.

The agreements were mostly witnessed by Ali Fida and, in certain cases, by Blink employees Muhammad Shahid, Muhammad Noaman and Muhammad Rizwan.

Blink Capital also issued post-dated cheques as guarantees, mostly signed by Hassan Maqsood and, in some cases, by Muhammad Farooq.

Based on the available evidence, the SECP investigation team concluded that Blink Capital was allegedly operating a Ponzi-type fraudulent investment scheme, unlawfully collecting funds from the general public and offering guaranteed returns beyond the scope of its licensed activities.

The investigation found that funds were mainly collected into Blink’s proprietary account, personal accounts of directors and an account titled “Blink Capital Management”, which was declared as a sole-proprietorship business in the name of employee Ali Fida.

According to the findings, the company maintained the Blink Capital Management bank account in Ali Fida’s name, into which Rs60m was received from complainants. The funds were subsequently transferred to Ali Fida’s personal account, while some amounts were withdrawn in cash and certain payments were made to complainants.

The investigation team concluded that Blink Capital was involved in illegal deposit-taking and offering guaranteed returns. The SECP identified potential violations of the Companies Act, 2017, the Futures Market Act, 2016, and the Futures Brokers (Licensing and Operations) Regulations, 2018.

The investigation specifically highlighted Section 84(1) of the Companies Act, 2017, relating to acceptance of deposits from the public, and Section 47(2) of the Futures Market Act, 2016, under which Blink allegedly failed to operate in accordance with its licence and exceeded the scope of its licensed activities by engaging in illegal deposit-taking and offering guaranteed returns.

Considering the gravity of the findings, the SECP Commission approved referring the matter to the FIA under Section 41-B of the SECP Act, 1997, for further investigation and appropriate action under the law. The referral is also intended to facilitate the redressal of grievances of affected investors.

SECP Chairman Dr. Kabir Ahmed Sidhu said the Commission would deal strictly with market abusers, manipulators and entities misusing their regulated status to deceive investors.

“Safeguarding investors’ interests is paramount. SECP will pursue those who abuse the market or investors’ trust, and will take all necessary regulatory and enforcement actions to protect investors and preserve market integrity,” he said.

The SECP also warned the public to exercise caution against unauthorized investment schemes, particularly those offering fixed or guaranteed returns. The regulator advised investors to verify an entity’s legal status and the business activities it is authorised to undertake before investing funds.

Copyright Mettis Link News