NEW DELHI: The Securities and Exchange Board of India (SEBI) has intensified its efforts to curb misleading investment advertisements on social media by mandating verification of registered intermediaries. However, experts warn that the menace of financial fraud is far from over, as fraudsters continue to find new ways to deceive investors.
Despite SEBI’s latest advisory requiring intermediaries to verify their identities on platforms like Google and Meta, legal experts believe that the regulatory move may not be enough.
Fraudsters can still bypass these measures by operating anonymously or through offshore entities beyond SEBI’s jurisdiction. Influencer marketing remains a grey area where individuals indirectly promote unregulated investment schemes without directly violating SEBI’s rules.
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Fake testimonials, exaggerated investment returns, and unofficial online investment groups continue to thrive, misleading unsuspecting investors into fraudulent schemes.
Financial firms have been warning investors about increasing impersonation scams. Stockbrokers have flagged fraudulent WhatsApp groups offering bogus investment advice while impersonating SEBI-registered entities.
Abans Financial Services Ltd, among others, has reported several cases of scammers misusing their brand identity to deceive investors. Many regulated entities across the industry have been targeted by fraudsters.
Meanwhile, pump-and-dump schemes are on the rise, with misleading videos and advertisements being used to lure investors into manipulated securities. Retail investors end up bearing the losses while fraudsters escape the regulatory framework.
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To tackle this growing threat, SEBI has partnered with Meta and Google to remove over 70,000 unregistered digital financial advisors providing unauthorized investment advice. The regulator is also working closely with the Ministry of Electronics and Information Technology (MeitY) and telecom service providers to crack down on fraudulent schemes.
However, stricter penalties and enhanced coordination with online platforms are necessary to fully address the issue. Intermediaries must adopt stringent compliance measures, including rigorous vetting and content approval protocols, to meet SEBI’s advisory requirements.
Investors, too, are urged to exercise caution and verify intermediary details through SEBI’s official channels before making any financial commitments. As fraudsters adapt to new regulations, staying vigilant remains the best defense against financial deception.
