Sebi to crack whip on illegal investment schemes online

Those under the scanner include entities offering 'double your money' schemes in 2-6 years & sure-shot 'inside information' investment tips

A large number of 'guaranteed-return' schemes, being promoted through emails, websites, blogs and social media platforms, have come under regulatory scanner for luring gullible investors to unauthorised investment products promising huge returns.

 

Those under the scanner include entities offering "double your money" schemes in 2-6 years, sure-shot "inside information" investment tips, astrological stock market predictions, attractive portfolio management services, and "partnerships" in future's big business ideas.

 

These include traditional businesses like retail, real estate and bullion, as also new-age business ideas like carbon credits and renewable energy, while guaranteed returns are being promised after eventual listing of such ventures.

 

Certain traditional-looking investment schemes are also being promoted through Internet by entities suspected to be linked to those already having faced regulatory action by the Securities and Exchange Board of India (Sebi), sources said.

 

Some of the barred entities, including a large player engaged in a long-running regulatory battle, are suspected to have taken to the credit cooperative society route to garner money from the gullible investors with promise to double their money in a few years, they added.

 

To avoid regulatory glare, the operators of these schemes, possibly being run through front entities, are not using the traditional modes to promote their business and are mostly using closed member groups on websites, blogs and social networking media platforms.

 

However, Sebi has received numerous complaints about such schemes and has begun looking into the matter through its own technical systems to track the Internet and social media platforms, as also through use of its newly granted powers.

 

SMSes and emails are also being used in a big way to promote such fraudulent schemes and products, but many of these messages and mails have found their way to the regulatory and enforcement agencies.

 

While the unauthorised credit cooperative schemes, having a size of Rs 100 crore or more, can be probed under Sebi's Collective Investment Scheme regulations, the entities promising unrealistic returns and offering "sure-shot" investment tips can face action under the Prevention of Fraudulent and Unfair Trade Practices Regulations.