Exchanges Caution Investors Against Fraudulent High Return Schemes
By : RAVI RANJAN PRASAD
Update: 2024-08-27 17:14 GMT
MUMBAI: Stock exchanges have issued a joint release cautioning investors against fraudulent mechanisms being adopted to lure investors and siphon off their funds from bank accounts.
"Some unscrupulous persons/ entities operating through Indian and International mobile numbers, through social media platforms like WhatsApp Groups, Telegram Channels, Facebook, Instagram Channels, etc. are falsely claiming to offer trading opportunities through Foreign Portfolio Investment (FPI) or Foreign Institutional Investor (FII) Sub-accounts or Institutional Accounts with special privileges impersonating reputed financial institutions, showcasing fake certificates purportedly issued by SEBI/ Exchanges.These operations often use mobile numbers registered under false names to orchestrate their schemes," said a joint release issued by.NSE, BSE, MCX,NCDEX and MSE.
"Victims of these scams have been asked to transfer funds to third-party bank accounts and funds are siphoned off from these accounts immediately and left in lurch with only the paper profits shown in the fake trading Apps.," the exchanges said about the modus operandi being used.
"Investors are urged to exercise utmost caution, conduct due diligence, and verify the registration status of any entity claiming to be a SEBI/NSE/BSE/MCX/MSE/NCDEX registered intermediary," the joint release said.
."Investors are advised not to share their trading credentials such as user id/password or any other sensitive information with anyone," the release cautioned.
"Exercise due caution and refrain from joining any WhatsApp/Telegram group where stock recommendations are given along with market analysis or downloading any App offering Institutional account services for members of WhatsApp/Telegram groups which have the features of trading in UPPER CIRCUIT stocks, Block Deals at discounted prices, preferential allotment in IPOs etc. Please note that you could be the next victim of transnational financial fraud promising unrealistic returns through fake institutional account services offered through fake trading Apps.," the release further warned.
The activities of such persons/ entities may include:• Claims of being associated with organisations/individuals of repute,
• Providing unregulated trading platforms and unauthorized trading applications which resemble or impersonate Applications/Websites of registered trading members,
• Luring to join/create "Institutional account" to get guaranteed/high returns without the need for an official trading or Demat account,
• Offering assured/guaranteed returns on Investment in Capital/Forex/Commodities market,
• Offering to handle trading account of investors by asking investors to share their login credentials (including passwords),
• Claiming to facilitate pre-IPO subscriptions with false promises of assured profits,
• Offering dabba/ illegal trading services,
• Enticing victims through online trading courses, seminars and mentorship programs in the stock market, leveraging social media platforms as well as live broadcasts.