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SEBI Warns Investors: Stay Away from Unregistered Platforms and Apps
Moneylife Digital Team 12 April 2025
Investor Interest
Market regulator Securities and Exchange Board of India (SEBI) has issued a strong caution to the public in response to a growing number of frauds related to the securities market being perpetrated through various social media platforms. These include widely used services such as YouTube, Facebook, Instagram, X (formerly Twitter), WhatsApp, Telegram, the Google Play Store and the Apple App Store.
 
SEBI has observed that with the increasing popularity of digital communication platforms, scamsters have found new avenues to target unsuspecting investors. These fraudsters often disguise themselves as educators offering trading tips, while in reality luring individuals into fraudulent investment schemes. They exploit social media to publish deceptive testimonials and make false promises of assured or risk-free returns, which are neither feasible nor legal in genuine market practices.
 
Several patterns of fraudulent activity have come to light. One of the most common is the operation of unregistered investment advisory services. These are run by individuals or entities who falsely claim to be registered with SEBI, often displaying fake certificates to gain trust. In other cases, scammers impersonate legitimate SEBI-registered entities. They run fraudulent trading platforms or messaging groups, particularly on WhatsApp and Telegram and falsely present themselves as official or affiliated services. They often claim to offer guaranteed returns or exclusive market access, which is both misleading and illegal.
 
Another concerning trend is the use of manipulated content and fake advertisements on social media to draw investors into private messaging groups. These groups carry names such as VIP Trading Club, Institutional Trading Group, or Official Stock Community, and are portrayed as elite forums offering privileged information.
 
Within these groups, fraudsters promote services through fake trading or advisory apps, claiming to offer benefits like institutional trading accounts, discounted IPO access, block trade opportunities at special prices, or guaranteed IPO allotments — all of which are baseless and designed to deceive.
 
In response, SEBI has urged investors to remain cautious and practice due diligence before trusting any social media channel that claims to offer investment or trading services. It is crucial for investors to verify the authenticity of such platforms and ensure that they are engaging only with intermediaries registered with SEBI. The registration status of such intermediaries can be verified on SEBI’s official website. 
 
• Registered intermediaries: https://www.sebi.gov.in/intermediaries.html
 
Likewise, before using any trading app, investors should confirm its legitimacy through SEBI’s investor support portal.
 
To further safeguard investors, SEBI has mandated that all registered intermediaries use the ‘1600’ series for phone numbers when making service or transactional calls. This initiative is aimed at helping investors easily identify genuine communications and avoid being misled by fraudsters using ordinary 10-digit numbers.
 
SEBI has also reminded investors that any transactions conducted with unregistered intermediaries or on unauthorised platforms fall outside the scope of SEBI’s investor protection framework. Investors will not be entitled to any recourse through SEBI or the exchanges, including mechanisms like the SCORES complaint system or the Smart ODR platform for dispute resolution.
 
The public is also encouraged to report any suspicious or unregistered entities offering advisory or investment services by submitting details through SEBI Market Intelligence portal at https://mi.sebi.gov.in
 
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