Spike in stock market scams puts Sebi on high alert

Broker lookalikes, scam apps prompt regulator to issue 2nd caution notice

- KHUSHBOO TIWARI

A surge in spurious applications (apps), websites, and even contact numbers impersonating stockbrokers and their executives has raised concerns, prompting the market regulator Securities and Exchange Board of India (Sebi) to call for swift action from its regulated entities.

With instances of investors being duped of crores through these apps reaching the regulator, Sebi Chairman Tuhin Kanta Pandey, in a recent meeting with industry representatives, urged stricter action by registered intermediaries, said sources.

People aware of the development said the regulator is strengthening its internal teams focused on cybersecurity, surveillance, and alerts owing to the rising number of such cases. Sources added that Sebi has taken serious note of the surge and asked stockbrokers to initiate first information reports (FIRs) against such entities at the earliest, apart from following the standard procedure prescribed in such cases.