SEBI Warns Investors: Beware of These 4 Common Stock Market Frauds Spreading on Social Media

SEBI warns Indian investors about rising stock market frauds on social media platforms like YouTube, WhatsApp, Telegram, and more. Scammers use fake investment advisory services, impersonate SEBI-registered entities, promote misleading content, and create fake apps to lure investors. SEBI highlights four common scams and urges investors to verify platforms and avoid falling for deceptive promises of risk-free returns.

Stock Market Scams on the Rise in India

According to government data shared in a Bloomberg report, over 1.5 lakh investors fell victim to stock market-related scams last year alone. In 2024, more than 400 scams were reported every single day, leading to a massive loss of over $1 billion. Only a small fraction, less than 10%, has been recovered so far.

Also Read: 10 Points Finance Influencers Should Know About SEBI’s New Rules

Why This Alert Matters Now?

Today, India has over 130 million unique trading accounts, nearly three times the number from five years ago. While this shows a positive growth in financial awareness, it also makes retail investors an easy target for scammers. Fraudsters have turned digital, using fancy apps, fake certificates, and misleading ads to trap innocent investors. These scams appear professional and convincing, especially when promoted under the name of trading “education” or exclusive “VIP” groups.

SEBI Flags Four Major Frauds on Social Media

• Unregistered Investment Advisory Services: Scamsters claim to be SEBI-registered advisors, but in reality, they’re unregistered and illegal. Some even show fake SEBI registration certificates to gain your trust. These services usually charge money for investment tips or trading calls and vanish once they’ve duped people.

• Impersonation of SEBI-Registered Entities: Fraudsters pretend to be official trading platforms or advisory firms registered with SEBI. They operate via WhatsApp or Telegram channels, claiming to offer guaranteed profits or risk-free returns. But these are fake platforms with no connection to SEBI-approved intermediaries.

• Misleading and Manipulative Content: Scammers use emotional content and fake success stories to lure users into private chat groups with names like:
  • VIP Trading Club
  • Discounted IPO Group
  • Official Stock Market Community

These groups are promoted using flashy ads and sponsored posts on Facebook, Instagram, and YouTube. Once you join, you’re slowly convinced to invest, often resulting in major losses.

Fake Apps Promising ‘Exclusive’ Services

There are also mobile apps claiming to offer premium trading services like:

• Institutional Trading Accounts
• IPO Allotment at Discount
• Block Deals with Sure-shot Returns

These apps appear legitimate but are fake. They charge hefty fees and provide no real services.

How to Check If a Platform is Genuine

SEBI advises investors to always verify the registration status of any trading or advisory service through their official links:

Registered SEBI Intermediaries

Verified Trading Apps & Investor Support

Also, SEBI has directed that official service or transaction calls from intermediaries should only come from phone numbers starting with the ‘1600’ series, helping users avoid fake calls and identity fraud.

Be Smart, Stay Safe

As online trading becomes popular, fraudsters are also becoming smarter. SEBI’s latest warning is a wake-up call for every Indian investor to think twice before trusting anyone online.

If it sounds too good to be true, it probably is. Check credentials, use only verified platforms, and avoid WhatsApp/Telegram channels promising easy returns.

Disclaimer: This article is for informational purposes only. The Reelstars is not responsible for the outcomes of any advice, content, or services from third-party platforms, individuals, or entities mentioned. Always consult SEBI-certified experts or registered financial advisors before making investment decisions.