For a very long time, the public's preferred investing option has been the stock market. Many investors have become wealthy as a result of it, receiving high returns on their investments. Nevertheless, there have been instances in which scammers have deceived investors and the market, resulting in irrevocable and irreplaceable harm.
This article will provide you with an overview of three recent frauds in the stock market:
A Delhi Women Loses Rs 24 lakh to Bogus Investment Adverts on Social Media
Fake adverts tricking people into making investments sponsored by well-known entrepreneurs or financial institutions are becoming a major issue on social media. A 36-year-old lady from Delhi recently fell victim to one of these scams while surfing Facebook.
While on Facebook, she came across a link offering stock market investments through Upstox Securities, a popular trading app in India. Curious, she clicked on the link and was joined to a WhatsApp group called "V5-VIP Upstox Services Group." According to the FIR she later filed, the gang provided stock trading suggestions before leading her to a bogus application.
The group administrator, Rajat Upstox VIP, invited members to participate in an event known as GTC, which promised high profits. To activate her account, she followed the instructions and joined a mobile app using a given link, then presented her Aadhaar and PAN cards. Between July 4 and July 17, 2024, she transferred Rs 24,35,000 to ten separate accounts for shares and IPOs. The program showed her investments increasing, persuading her to purchase additional stocks. However, when she tried to sell her shares, they refused and insisted on a loan instead.
Nidhi Sagar, a North Pitampura resident, is one of an increasing number of people who have been misled by such scams and are trying to retrieve their hard-earned money.
Whatsapp Stock Market Fraud
Cybercriminals tricked two residents of Noida out of over Rs 1.40 crore by promising them enormous profits on stock market transactions. The victims, according to Additional Deputy Commissioner of Police (Cyber Crime) Preeti Yadav, include a male and a woman who have each submitted separate complaints.
Trishala, a resident of Sector 75's Golf Avenue Society, filed a report at the Cybercrime Police Station on Sept 8th Sunday night, according to Yadav. She said that a few months ago, she was joined to the BlackRock Stock Club WhatsApp group. Trishala said that one of the women in the group gave her information on stock market investments and convinced her to download an app on her phone.
According to the officer, she stated that she first received some returns from her investments and that she later chose to put Rs 1 crore after starting to trust the system. However, Trishala was reportedly kicked out of the group by the accused after she attempted to withdraw her money.
In a related instance, Rohit Chawla, a resident of Sector 16, claimed to have suffered a scam of Rs 40.70 lakh in a report he submitted on Sunday night, September 8, at the cybercrime police station.
Assam Police Busts a Rs 2,200 Crore Online Trading Scam
On September 4th, the Assam Police uncovered a large financial scam of ₹ 2,200 crore, which used brokers pretending to double people's money in order to make illegal trades in the stock market online. In connection with the crime, the police have detained two men: Guwahati resident Swapnil Das and Dibrugarh resident Vishal Phukan, a 22-year-old internet trader. But in the alleged state-wide scheme, numerous more arrests are anticipated.
According to the police, Phukan used his lavish lifestyle to entice individuals and assured his investors of a 30% return on their money within 60 days. In addition to investing in Assamese cinema, he had established four fictitious businesses and bought other houses. Documents connected to the multi-crore fraud were taken by the police during a raid on his Dibrugarh home.
Chief Minister Himanta Biswa Sarma advised against making dubious online stock market investments, pointing out that promises of easily doubling money are typically untrue. "I would want to inform the public that there is no method for investing money through these online trading businesses on the stock market. People are being misled by fraudsters. I implore everyone to avoid con artists. Cases against the unlawful brokers have now been filed by the police. He stated, "We're going to try to take down the entire racket in the state. The police have started cracking down on illicit online trade in the state.”
The Bottom Line
Technology has brought out new-age frauds, such as social media scams. When fraud is exposed, it has a significant influence on individual investors' faith in the stock market, keeping it from reaching its maximum potential and, in certain cases, bankrupting the investors and forcing them to take drastic measures, among other things.
Fraudsters continue to discover ways to trick the system despite SEBI and other intermediaries' best efforts to preserve the integrity of the stock market and protect investors. As an investor, one needs to exercise caution and take the required precautions to avoid becoming a victim of scammers.
