BSE warns of scammers impersonating SEBI-registered platforms; here's how to protect yourself

Market regulator Securities and Exchange Board of India (SEBI) has been receiving complaints from investors and intermediaries regarding fraudulent trading activities in the name of prominent SEBI-registered financial institutions, the BSE Investors Protection Fund has cautioned.

With the rise of the popularity of the stock market among the masses, fraudsters are increasingly using sophisticated methods to deceive investors.

The BSE Investors Protection Fund said that the impersonators connect to investors through social media and messaging applications, such as Facebook pages and WhatsApp groups and make enticing promises of guaranteed high returns.

"Investors, believing they are dealing with legitimate registered intermediaries, download the 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," it said.

How to stay safe from fraudulent investors?

The BSE Investors Protection Fund has advised investors to stay away from fraudulent trading schemes and apps promising unrealistic returns through initial public offering (IPO) allotments and block deals.