Fraud and Manipulation in Securities Market

The Securities and Exchange Board of India (SEBI) alerted investors about increasing fraud and manipulation via social media platforms as per a circular dated April 11, 2025. Investors are advised to remain vigilant to prevent deception.

Impersonation Trick

• Fraudsters impersonate SEBI-registered intermediaries by creating fake websites and apps that look professional and legitimate.
• They replicate names, logos, and registration numbers and may even forge SEBI-like certificates and create fake social media profiles.
• These scammers share false testimonials and initially show small profits to build trust.
• They lure individuals into 'VIP' trading clubs on platforms like Telegram and WhatsApp.
• To verify a SEBI-registered investment advisor, request their registration number and confirm it on SEBI's website.

Fake Trading and Advisory Apps

• Fraudsters use dormant apps originally created for unrelated purposes to avoid scrutiny.
• Verify the developer's name and check for mismatches with known brokers as a red flag.

Stock Advisory Groups

• Unverified investment groups on messaging platforms often provide unreliable tips.
• Verify broker details on SEBI's website and avoid apps asking for direct fund transfers outside of recognized brokers.
• Enable privacy settings to block additions to unknown groups.

Beware of Fake Certificates

• Fake documents are often low in quality with grammatical and typographical errors.
• Compare logos and branding with those on SEBI's official website.

Red Flags to Watch Out For

• Be cautious of promises of unrealistically high returns and guaranteed returns.
• High-pressure tactics and claims of insider information are warning signs.
• Watch out for generic mobile numbers instead of the official '1600' series numbers designated for registered entities by SEBI.

Steps to Take After a Cyber Fraud

• Report the fraud at cybercrime.gov.in or visit your local police station with all communication and payment details.
• Lodge a complaint with SEBI through the SCORES portal and provide supporting documents.
• Inform the NSE or BSE to help identify unregistered entities.
• Report suspicious phone numbers to the Sanchar Sathi portal or app.
• Notify your bank or UPI app immediately to block the transaction.
• Call 1930 to freeze the recipient's account.