Mumbai – The Securities and Exchange Board of India (SEBI) has issued a strong alert to investors cautioning them about the growing menace of fraudulent trading activities being conducted through social media platforms and unregulated apps.
In its official advisory, SEBI warned that fraudsters are using free trading apps, fake profiles, and unauthorized groups on platforms like WhatsApp to mislead and defraud investors, particularly novice and unaware individuals.
Rising Social Media Scams Targeting Investors
SEBI noted that social media has significantly changed how information is shared and how users connect. However, this evolution has also opened new avenues for unscrupulous entities to target innocent investors.
“These entities often send unsolicited invitations with links to join so-called VIP groups or free trading courses via WhatsApp and other platforms. Clicking or responding to these links can lead to serious financial losses,” SEBI said.
Misuse of SEBI-Registered Names and Industry Figures
According to SEBI, many of these fraudulent accounts falsely portray themselves as market experts and authorized advisors, often misusing the names of SEBI-registered intermediaries, renowned personalities, or CEOs/MDs of reputed firms to gain trust.
Once investors are lured in with promises of high returns, they are asked to transfer money to personal bank accounts – a clear red flag. SEBI has urged investors to ignore and report any unsolicited messages and avoid joining such unofficial groups or responding to questionable links.
Advice: Stick to SEBI-Registered Brokers and Verified Trading Apps
SEBI has reiterated that all trading and investment activity should be conducted only through SEBI-registered intermediaries and verified trading applications. Before initiating any transaction, investors should verify the legitimacy of the app or broker via SEBI’s official website.
In April, SEBI had also issued a separate warning against “opinion trading platforms”, which allow users to trade on outcomes of events (like answering “Yes” or “No” to predictions). These platforms do not fall under SEBI’s regulatory oversight and offer no legal protection to investors.
Exercise Extreme Caution Online
As online financial frauds rise, SEBI’s alert serves as a timely reminder for investors to remain vigilant, skeptical, and informed. Trust should be placed only in verified platforms, and investors are encouraged to report any suspicious activity to SEBI or relevant cybercrime authorities.
Remember: If an offer sounds too good to be true, it probably is.
