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Sebi directs depository participants to take swift action against any fraud

Mumbai, May 29, 2024

WhatsApp groups from Hong Kong, Cambodia operated investment scams

Amid a rise in financial frauds, the market regulator has directed depository participants to take swift action and report any impersonification, usage of identity, trademark or logo to the National Cybercrime Reporting portal.

The directions follow a report by the Indian Cyber Crime Coordination Centre, which has seen a new pattern of transnational cyber-enabled financial fraud and investment scam, impersonating as stockbrokers and company executives.

In a letter dated May 15, the Securities and Exchange Board of India (Sebi) has informed depositories about the receipt of the report on abuse of ‘SMS Headers’ in stock market investment fraud.

The report added that it had seen a sharp rise in this new pattern under which cyber criminals are impersonating as stock brokers, financial advisors, or executives of capital investment firms. They are doing so through fake mobile apps, websites, and WhatsApp or Telegram.

“Fraud WhatsApp groups are learnt to be operating from Cambodia/Hong Kong. At the early stage, these apps were learnt to be circulated through Google Playstore, Apple App store and via web links that are sponsored mainly through Instagram and Facebook Advertisements targeting users with ‘interest in stock markets’,” said the report.

The messages are structured so that victims believe that the SMSes are coming from genuine entities and proceed with this misunderstanding.

Earlier in February, Sebi had issued an advisory against fraudulent trading schemes claiming to be offered by foreign portfolio investors (FPIs) to domestic investors.

The caution followed instances where fraudsters coaxed individuals into downloading apps that would allow them to buy shares, subscribe to public offers, and enjoy institutional benefits without opening trading or demat accounts.

These victims were enticed through online trading courses, seminars and mentorship programmes by people posing as employees of Sebi-registered FPIs.

In several other instances, fraudsters sent messages and links claiming to be the managing director or a senior employee of stock exchanges.

[The Business Standard]

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