Markets Regulator Warns Against Social Media Securities Frauds

MUMBAI: The Securities and Exchange Board of India (Sebi) issued a stark warning on Friday about the increasing number of fraudulent activities in the securities market, particularly those proliferating through social media platforms (SMPs). The regulator urged the public to report any suspicious activities via its official portal at https://mi.sebi.gov.in/.

How Fraudsters Operate

With the surge in digital platform usage, fraudsters are increasingly luring victims with trading advice masquerading as educational content. Sebi highlighted the use of deceptive testimonials and the promise of unrealistic, guaranteed returns as common tactics employed by these scammers.

Common Types of Frauds

The regulator outlined the most prevalent securities market frauds on SMPs, including unauthorized investment advisory services falsely claiming Sebi registration, platforms impersonating Sebi-registered entities, and the promotion of misleading content to entice investors into private chat groups. Sebi rules explicitly prohibit intermediaries from guaranteeing any returns to investors.

Stay Informed and Protected

Sebi's advisory serves as a crucial reminder for investors to remain vigilant and conduct due diligence before engaging with any investment opportunities presented on social media.