Synopsis
Mumbai's SEBI has issued a warning regarding the surge in securities market frauds on social media platforms. Investors are urged to verify the authenticity of SEBI-registered entities and exercise caution against deceptive practices that promise unrealistic returns.Key Takeaways
- SEBI warns of increasing securities market frauds.
- Fraudsters impersonate SEBI-registered entities.
- Investors should verify social media handles.
- Only engage with SEBI-registered intermediaries.
- Beware of misleading trading apps and ads.
Mumbai, April 12 (NationPress) Concerned about the rise of frauds in the securities market across diverse social media platforms, the capital markets regulator SEBI has released an advisory urging investors to exercise vigilance and thoroughly verify the authenticity of social media accounts affiliated with SEBI-registered entities.
SEBI has reported a surge in fraudulent activities related to the securities market on platforms including YouTube, Facebook, Instagram, X (formerly Twitter), WhatsApp, Telegram, as well as on Google Play Store and Apple Store, among others.
“As digital communication channels become more prevalent, it has been observed that con artists are luring victims with trading tips under the guise of offering educational services. They also disseminate misleading or false testimonials, and promise guaranteed or risk-free returns through various social media platforms,” SEBI stated.
Furthermore, SEBI has identified unregistered investment advisory services being offered by entities that falsely assert their registration with SEBI, or that display fraudulent certificates allegedly issued by the regulator.
Additionally, impersonation of SEBI-registered entities by deceitful trading platforms and channels on WhatsApp and Telegram has been noted. These platforms misleadingly claim or imply a connection with SEBI-registered entities, suggesting they offer assured or risk-free returns.
“Scammers are attracting naïve investors by asserting that they provide exclusive services on their platforms (fraudulent trading/advisory applications) that facilitate securities trading, claiming to offer preferential services regarding trades and stock prices — such as institutional trading accounts, discounted IPOs, block trades at reduced prices, and guaranteed allocation of IPOs,” SEBI reported.
Moreover, manipulative and misleading content has been crafted by fraudsters to entice investors into joining private chat groups or channels on WhatsApp/Telegram, through deceptive advertisements or posts across various social media platforms.
“Investors are urged to exercise caution and due diligence in verifying the authenticity of social media handles of SEBI-registered entities when engaging with them,” the regulator added.
Additionally, while investing in the securities market, investors are advised to transact only with SEBI-registered intermediaries and legitimate trading applications,” it concluded.
