Financial Fraud Awareness

Protecting Yourself from Social Media Scams in the Securities Market

The emergence and widespread adoption of social media have transformed how we connect and share information. Unfortunately, some entities exploit social media platforms (SMPs) to lure and deceive unsuspecting investors in the securities market. These entities employ various strategies to gain the trust and confidence of potential investors:

• Unsolicited Invitations: sending unsolicited links to join WhatsApp groups (such as VIP groups or free trading courses) to entice prospective clients.
• Fake Profiles: creating fraudulent profiles that present them as experts in the securities market.
• Impersonation: frequently impersonating SEBI-registered intermediaries, well-known public figures, celebrities, CEOs, or MDs of established organizations.
• Fake Testimonials: misleading investors by showcasing fabricated testimonials from group members claiming substantial profits, then tricking investors into transferring funds with false promises of similarly high returns.

Investors are urged to be cautious and not trust unsolicited messages from unverified individuals, and to avoid joining questionable WhatsApp groups or communities.

Guidelines for Investors

• Engage only with SEBI-registered intermediaries and utilize authentic trading apps. Verify the registration status of entities with SEBI at the SEBI Registration Verification page before making any investments.
• Conduct transactions solely through the official trading apps of SEBI-registered intermediaries, found at SEBI Investor Support.
• Only communicate through the genuine social media handles of SEBI-registered entities.

SEBI releases this guidance to alert investors about widespread fraud and scams perpetrated by unscrupulous entities, and to provide guidance on protecting themselves while engaging in the securities market through SEBI-registered intermediaries.

Tips from a Research Analyst on Reducing Your Risk of Stock Market Scams via Social Media

1. Search for the Research Analyst’s name at SEBI’s official website.
2. Obtain the email address and phone number of that Research Analyst from the SEBI portal.
3. Communicate regarding products and services exclusively through the email address provided on the SEBI portal.
4. If the Research Analyst responds from that same email address, you can be assured you are communicating with a genuine SEBI-registered professional.
5. Always pay after verifying details through SEBI Check, and only to a “@valid” UPI ID and through the Centralized Fee Collection Mechanism (CeFCoM) for Investment Advisers and Research Analysts.
6. If a party responds from a different email address and refuses to provide details, a “@valid” UPI ID, or CeFCoM for payments, disregard the communication; they may be an impersonator attempting to scam you.

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