The Securities and Exchange Board of India has issued a stark warning about the rising threat of securities market frauds proliferating across social media platforms. In an advisory aimed at protecting investors, the regulator cautioned against deceptive practices employed by unscrupulous entities, urging individuals to exercise vigilance and verify the authenticity of social media handles associated with SEBI-registered entities.
An alarming surge in fraudulent activities has been observed on platforms such as YouTube, Facebook, Instagram, X (formerly Twitter), WhatsApp, Telegram, as well as application marketplaces like Google Play Store and Apple Store. Exploiting the widespread adoption of digital communication technologies, fraudsters have resorted to enticing victims with promises of assured or risk-free returns, while disguising their operations as educational initiatives. They amplify their deceit through misleading testimonials and guarantees that lure investors into a false sense of security.
The regulator highlighted the prevalence of unregistered investment advisory services, where impostors falsely claim registration with SEBI or showcase fabricated certificates ostensibly issued by the authority. Fraudulent trading platforms, along with WhatsApp and Telegram channels, have been impersonating SEBI-registered entities, misleading investors with assurances of preferential services like institutional trading accounts, IPO allocations at discounted prices, and block trades offering significant benefits.
These scamsters further exploit gullible investors through carefully designed misleading content and manipulative advertisements, which draw users into private chat groups or channels promising exclusive services. The tactics employed range from fraudulent apps to deceptive posts across social media, all aimed at capitalizing on the trust of unsuspecting individuals.
In response to these developments, SEBI has emphasized the importance of dealing solely with registered intermediaries and verified trading applications when navigating the securities market. The regulator has urged investors to exercise utmost caution and undertake comprehensive due diligence before engaging with social media handles purporting to represent SEBI-registered entities.
Through its advisory, SEBI hopes to empower investors against falling prey to the sophisticated schemes devised by fraudsters who exploit the digital landscape to perpetuate their activities. The regulator continues to reinforce its commitment to safeguarding the interests of the investing public while promoting a secure and transparent securities trading environment.
