Markets regulator SEBI on Wednesday cautioned investors against unsolicited messages from unverified people and asked them to refrain from joining WhatsApp groups or communities.
This warning comes amid a rise in cases where entities are using social media platforms to entice and deceive gullible investors in the securities market.SEBI has observed that such entities use various strategies to gain investors' trust and confidence. Generally, these entities send unsolicited invitations in the form of links to join WhatsApp groups -- often under names like "VIP Group" or "Free Trading Courses"-- targeting prospective clients.
To appear credible, these entities often create fake profiles that depict them as experts in the securities market. In many instances, they impersonate SEBI-registered intermediaries, well-known public figures, celebrities, or CEOs/MDs of established organisations.
They exploit investors by showcasing fake testimonials of large profits, supposedly earned by other group members who are actually playing a supporting role in the scam. This misleading portrayal tricks investors into transferring funds to the bank accounts of these entities, lured by false promises of similarly high returns.
Accordingly, SEBI, in a statement, advised investors "to not trust such unsolicited messages from unverified people and refrain from joining such Whatsapp groups/ communities. Investors are advised to deal with only Sebi-registered intermediaries and through authentic trading apps".
Capital market regulator SEBI has cautioned investors against falling for stock market scams through any of the social media platforms, urging them to verify the registration of entities before transacting with them.The rise of social media has redefined the way people connect and share information, however, some entities are using social media platforms (SMPs) to entice and deceive gullible investors, said SEBI, adding that such entities usually send unsolicited invitations in the form of links to join WhatsApp Groups (like VIP Group, Free Trading Courses etc.) to prospective clients.
SEBI working group suggests experience and knowledge test in addition to net worth Exam for accredited investors? SEBI working group suggests experience and knowledge test .These entities also also created fake profiles in the past, that portray them as experts in the securities market. Many times, they impersonate Sebi-registered intermediaries, well-known public figures, celebrities, CEOs or MDs of established organisations.
The regulator cautioned that such fraudsters exploit investors by showcasing fake testimonials of huge profits from other group members who play a ‘supporting role’ in these scams. Investors are subsequently tricked into transferring funds into the bank accounts of such entities with false assurances of unreasonable returns.SEBI has advised investors not to trust unsolicited messages from unverified people, and refrain from joining unknown Whatsapp Groups or communities.
The regulator has been creating awareness about stock market frauds using social media platforms, after the number of such frauds soared in recent years. So far, SEBI has removed more than 70,000 misleading social media posts and handles since October last year, and approved unique UPI IDs for registered intermediaries, to ensure funds go to only authentic entities.
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