SEBI caution investors against stock market scams via social media platforms
The Securities and Exchange Board of India (SEBI) on Wednesday cautioned investors against stock market scams involving the use of social media platforms.
The regulator has urged investors to deal with entities that are registered with SEBI and through authentic trading apps.
SEBI said that some entities are using social media platforms to entice and deceive gullible investors in the securities market. These entities use strategies to induce investors into trusting them by gaining their confidence. They send unsolicited invitations in the form of links to join WhatsApp groups (like VIP group, free trading courses etc.) to prospective clients.
“These entities create fake profiles that portray them as experts in the securities market. Many times these entities impersonate SEBI registered intermediaries, well known public figures, celebrities, CEOs/ MDs, etc. of established organisations,” SEBI said in a release.
They exploit investors by showcasing fake testimonials of achieving huge profits, from other group members who play a supporting role in these scams. Investors are then tricked into transferring funds to the bank accounts of these entities, with false assurances that such unreasonable returns can also be earned by them.
The regulator advised investors to not trust such unsolicited messages from unverified people and refrain from joining such WhatsApp groups/ communities. Investors communicate with only genuine social media handles of SEBI registered entities, it said.
Investors can verify the status of registration of entities with SEBI at https://www.sebi.gov.in/intermediaries.html before investing. They should also carry out transactions only through authentic trading apps of SEBI registered intermediaries at https://investor.sebi.gov.in/Investor-support.html.
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