Noida businessman loses Rs 1.15 cr to share market fraud: How to stay safe

It's vital to invest through Sebi-registered platforms, steer clear of anyone promising unusually high returns while using trusted apps

A businessman from Noida lost Rs 1.15 crore in an online investment scam after being deceived by a woman, who posed as a certified financial analyst and promised high returns through fraudulent stock market websites, according to reports.

 

The scam unfolds

 

According to media reports, the ordeal began on January 27, 2025, when the businessman received a WhatsApp call from an individual claiming to be Rishita, a certified financial analyst. She provided him with links to two investment websites and encouraged him to register. Initially skeptical, he made a modest investment of Rs 1 lakh on January 31. To his surprise, he was informed the next day that he had earned a profit of Rs 15,040, which he successfully withdrew. This initial success led him to trust the scheme and invest further.

 

 

Over the following weeks, the man poured Rs 65 lakh into the scheme, believing his investments had grown to Rs 1.9 crore based on the fraudulent claims made by the scammers. However, when he attempted to withdraw his earnings in late February, he was met with demands for additional payments under various pretexts.

 

To withdraw the amount, he was first asked to pay Rs 31.6 lakh as ‘taxes’, which he deposited in early March. However, the fraudsters later demanded an additional Rs 18.6 lakh as a "conversion charge", assuring him that his funds would be released within 24 hours, according to reports.

 

Despite making multiple payments, the complainant neither received his investment nor the promised returns. Instead, the fraudsters demanded another Rs 40 lakh, at which point the businessman realised he had been scammed.

 

“The recent incident of a Noida businessman losing Rs 1.15 crore to a share market fraud highlights the growing sophistication of financial scams. This is just the tip of the iceberg that has come to light. There could be instances where the scams are not reported duping financial investors. The investor must take caution and verify such credentials if the advice is through a Sebi registered broker and if the platform is registered under Sebi,” said Alay Razvi, managing partner, Accord Juris.

 

“To avoid share market frauds, always invest through Sebi-registered platforms and steer clear of anyone promising guaranteed or unusually high returns. Use trusted apps, enable two-factor authentication, and monitor your accounts regularly. Fraudsters often pose as experts, flaunt fake profits or luxury lifestyles, and create urgency to push quick decisions. They may use fake websites, and social media profiles, or claim ties to reputed firms to appear credible. Be cautious of unsolicited messages or calls, verify identities, and report anything suspicious to Sebi or cybercrime authorities,” said Raheel Patel, partner, Gandhi Law Associates.

 

Ashutosh K Srivastava, counsel, SKV Law Offices, explains how to safeguard yourself from investment fraud.

 

The Securities and Exchange Board of India (Sebi) has implemented several guidelines and regulations to protect investors from fraudulent activities.

 

Investors should familiarise themselves with Sebi's regulations, particularly the Prohibition of Fraudulent and Unfair Trade Practices, which aim to curb fraudulent activities and protect investor interests. Ensuring that all brokers, investment advisors, and other intermediaries are registered with Sebi is crucial, as dealing with unregistered entities increases the risk of fraud.

 

Being cautious of schemes promising high returns with little or no risk is essential. Sebi advises investors not to borrow money for investment purposes and to avoid dealing with unregistered brokers or intermediaries. Staying informed about regulatory updates is also vital. Sebi continually updates its regulations to enhance market integrity and investor protection. For instance, recent amendments have been made to strengthen fraud prevention mechanisms among stockbrokers.

 

If you encounter any suspicious investment schemes or activities, report them to Sebi promptly. Timely reporting can prevent potential fraud and protect other investors. By adhering to these guidelines and maintaining vigilance, investors can significantly reduce the risk of falling victim to share market fraud. It is crucial to approach investment opportunities with caution and to prioritise the security of personal financial information.