SEBI Issues Warning Against Social Media Investment Scams

The Securities and Exchange Board of India (SEBI) has issued a public warning about rising investment scams being promoted through social media platforms. Fraudsters are using fake profiles and misleading content to lure investors with promises of guaranteed returns.

In a press release, the authority said, SEBI has noticed an increase in frauds related to the securities market on various Social media such as YouTube, Facebook, Instagram, X (previously) Twitter, WhatsApp, Telegram, Google Play Store, Apple Store, etc.

With the increasing adoption of digital communication platforms, it is observed that scammers are enticing victims by giving trading calls in the name of providing education. They also provide misleading or deceptive testimonials, promises or guarantees of assured or risk-free returns, etc., through various SMPs.

Common types of fraud relating to the securities market are

1. Unregistered investment advisory services provided by entities that falsely claim to be registered intermediaries with SEBI or by showcasing fake certificates purportedly issued by SEBI.

2. Impersonation of SEBI registered entities by fraudulent trading platforms, WhatsApp, Telegram channels which deceptively claim or suggest affiliation with SEBI-registered entity claiming to provide an assured or risk-free return

3. Misleading/manipulative contents designed by scamsters to entice investors to join private chat groups or channels on WhatsApp/Telegram e.g, VIP group, Discounted trading group, Institutional Trading group, Official stock Community, Investment Club, etc., through fraudulent ads/posts on various SMPs.

4. Scamsters are enticing gullible investors by claiming that they provide exclusive services on their platform (Fake trading/ advisory apps), facilitating securities trading that allows the subscriber to enjoy preferential services regarding trade and share price, e.g.

- Institutional trading account

-IPOs at a discounted price

-Block Trade at a discounted price

-Sure-shot allocation of IPO

About SEBI

The Securities and Exchange Board of India (SEBI) is the regulating authority for India's securities and commodity markets. The Securities and Exchange Board of India's fundamental functions include ...protecting the interests of investors in securities, promoting the development of, and regulating the securities market.

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