In an age where information spreads at the speed of light and investing has become as easy as downloading an app, fraudsters have found new and creative ways to exploit unsuspecting investors. The Securities and Exchange Board of India (SEBI) has issued a crucial warning to the public regarding the rise of fraudulent and manipulative activities related to the securities market across various social media platforms (SMPs).
Platforms like YouTube, Facebook, Instagram, X (formerly Twitter), WhatsApp, Telegram, and even app stores like Google Play and Apple Store are increasingly being used by scamsters to lure investors. These individuals and entities often disguise their operations under the pretense of offering financial education or advisory services. However, behind the slick marketing and convincing testimonials lie deceptive promises of assured or risk-free returns—an immediate red flag in any legitimate investment context.
Common Tactics Used by Fraudsters
SEBI has observed several patterns in these scams. Some of the most common include:
Unregistered Advisory Services: Fraudsters pose as SEBI-registered advisors, even displaying fake certificates to gain trust.
Impersonation of Registered Entities: Certain WhatsApp or Telegram channels falsely claim to be affiliated with SEBI-registered firms, offering “guaranteed” profits or exclusive investment tips.
Misleading Content & Private Groups: Many scammers run promotional ads leading to so-called VIP or Institutional Trading groups. These private chat rooms often serve as traps to manipulate investor behavior or solicit funds.
Fake Trading Platforms and Apps: Fraudulent applications on app stores claim to offer exclusive services like discounted IPOs, preferential trade access, or sure-shot allocations—none of which are legal or backed by SEBI.
What Should Investors Do?
In light of these alarming trends, SEBI strongly urges all investors to verify the authenticity of any social media handle, investment app, or advisory service before engaging. Only deal with intermediaries that are officially registered with SEBI. You can check their registration status here:
List of Registered Intermediaries
Verified Trading Apps
Furthermore, all SEBI-registered intermediaries will use phone numbers starting with the ‘1600’ series for any transactional or service-related calls. Investors should be cautious of unknown 10-digit mobile numbers claiming to be from financial service providers.
Limited Protection for Investors Using Unregistered Services
It’s important to note that if you fall victim to an unregistered platform or advisor, you will not have access to key investor protection mechanisms. This includes SEBI’s SCORES grievance redressal system, exchange dispute mechanisms, or the smart ODR (Online Dispute Resolution) platform.
How You Can Help
SEBI encourages the public to report any suspicious or unregistered advisory platforms via the Market Intelligence (MI) Portal.
