Indian Stock Exchanges Unite Against Deceptive Investment Schemes

Amid growing concerns about fraudulent investment tips, India's top stock exchanges issued a joint advisory to warn investors against unrealistic promises from unscrupulous entities. They emphasized the importance of caution, particularly on social media, and highlighted avenues for reporting potential frauds.

In light of an increasing number of fraudulent investment tips, India's leading stock exchanges have issued a joint advisory to caution investors about the potential risks. The advisory, released on Monday by BSE, NSE, NCDEX, MCX, and MSE, urged investors to avoid social media groups offering stock recommendations and market analysis, as well as apps claiming investment opportunities.

The exchanges warned that joining these groups or downloading fake apps could expose investors to "transnational financial frauds promising unrealistic returns." The advisory revealed that certain unscrupulous individuals or entities, operating under false pretenses, are offering trading opportunities through Foreign Portfolio Investment (FPI) or Foreign Institutional Investor (FII) schemes.

These fraudulent operators often present fake certificates allegedly issued by SEBI or stock exchanges, and use mobile numbers registered under false names to carry out their schemes. They make false associations with reputable organizations, promise guaranteed returns without demat accounts, and even ask investors to share their login credentials for trading accounts. They also lure investors with pre-IPO subscription offers guaranteeing profits, among other deceptive practices.

In light of these activities, the stock exchanges advised investors to be skeptical of high-return claims on social media and avoid falling for dubious stock market advice. Victims of such schemes are encouraged to report suspected frauds to the Chakshu facility on www.sancharsaathi.gov.in and, if already defrauded, to contact the cybercrime helpline at 1930 or report online at www.cybercrime.gov.in. Investors are also urged to verify the authenticity of trading apps, websites, and bank accounts of recognized stockbrokers via stock exchange webpages.

Investors need to understand that high-return investments usually involve significant risks, including fraud, and there are no guarantees of assured returns in the securities market. (ANI)

(With inputs from agencies.)