SEBI cautions investors against fraudsters impersonating registered platforms, exposes modus operandi

With the advancement in technology, scammers are also finding new ways to defraud people. Recently, the Securities and Exchange Board of India (SEBI) warned investors that it has received complaints regarding fraudulent trading activities in the name of SEBI-registered financial institutions.

Modus operandi of scammers exposed

Exposing the modus operandi, SEBI said impersonators use social media platforms such as Facebook and WhatsApp to trap investors by promising them guaranteed high returns.

Investors who believe they are dealing with legitimate registered intermediaries download the fraudulent app and invest through it.

"However, the reality is that their investments never actually occur on the Stock Exchanges. Instead, these transactions remain as paper trades within the app. When investors try to withdraw substantial amounts, the app suddenly becomes non-functional," SEBI said.

The regulatory body has advised investors to stay away from fraudulent trading schemes and apps promising unrealistic returns through block deals and IPO allotments.