Investors were also advised to exercise caution and refrain from joining social media groups where stock recommendations are provided. | Representation
The country’s two major stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), have warned investors against “unscrupulous individuals and entities falsely claiming to offer trading opportunities.”
In a notice issued to investors, the two stock exchanges specified that fraudulent actors are using Indian and international phone numbers as well as social media accounts to orchestrate their schemes.
“It has been brought to the attention of the Exchanges that some unscrupulous persons or entities, operating through Indian and international mobile numbers and social media platforms, are falsely claiming to offer trading opportunities through Foreign Portfolio Investment (FPI) or Foreign Institutional Investor (FII) schemes, posing as reputed financial institutions,” the notice read.
Avoid suspicious social media groups
Investors were also advised to exercise caution and refrain from joining social media groups where stock recommendations are offered along with market analysis, or from downloading apps offering investment opportunities.
The advisory urged investors not to subscribe to any scheme, recommendation or product that guarantees returns in the stock market without verifying its authenticity. Investors were also advised not to share their trading account credentials such as user ID or password.
“Investors should understand that investments offering high returns often involve high risks and could be fraudulent,” the warning said.
The most common forms of scams
The notice also lists some of the most common forms of scam. Some of the main ones are listed below:
- Claims of association with reputable persons/organizations
- Providing unregulated trading platforms and unauthorized trading applications
- Attract investors to join or create institutional accounts and ensure high returns with an official account
- Offering guaranteed returns on investments in capital, currency or commodity markets.
- Provide services to manage investors’ trading accounts and request their login credentials.
‘Report fraud to Chakshu’
In case of suspected fraud, the exchanges advise investors to report it to the Chakshu centre (http://www.sancharsaathi.gov.in). If an investor has already lost money, he or she should report the incident to the cybercrime helpline on 1930 or through http://www.cybercrime.gov.in. Additionally, investors are advised to check the websites of the stock exchanges to verify the authenticity of the trading applications.
First published: August 27, 2024 | 12:23 pm IS
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