CIRCULAR ON FRAUDS Verify Sebi registration before accepting investment advice

The Securities and Exchange Board of India (Sebi), in a circular dated April 11, 2025, warned investors about rising fraud and manipulation linked to the securities market on social media platforms.

- HIMALI PATEL

The Securities and Exchange Board of India (Sebi), in a circular dated April 11, 2025, warned investors about rising fraud and manipulation linked to the securities market on social media platforms. Investors must stay vigilant to avoid being misled.

Impersonation trick Fraudsters often pose as Sebi-registered intermediaries. "They create fake but sophisticated websites or apps, with professional-looking interfaces, which resemble legitimate ones. They use similar names, logos, and registration numbers. They sometimes even forge Sebi-like certificates and falsely claim Sebi registration. They also create fake social media profiles of real intermediaries," says Dip Mehta, partner, EY Forensic and Integrity Services.

These scammers share false testimonials. "They initially show small profits to build trust," says Mehta.

Another trick is the promise of exclusive access. "The purpose is to lure people into "VIP" trading clubs on Telegram and WhatsApp," says Ajay Lakhotia, founder and chief executive officer, StockGro.