SEBI’s has miraculously discovered an ‘Organized Racket’of Mis-selling

Sucheta Dalal 16 April 2013

SEBI recently issued a press release claiming to have busted an organised gang trying to cheat targeted individuals with the false promise of riches. Its claims leave a lot of questions unanswered

On 9th April, the Securities & Exchange Board of India (SEBI) issued a press release claiming to have busted an organised gang trying to cheat targeted individuals with the false promise of riches. In this case, SEBI apparently received a complaint that some ‘agents’ / ‘brokers’ had approached potential victims in Delhi telling them that their deceased son had invested in a mutual fund scheme that was due to mature shortly giving them Rs5 lakh. However, if they made a further investment of Rs2.5 lakh, they could hope to earn Rs12.5 lakh (presumably at a future date). Two things happened here—first, unlike the usual online complaints to SCORES that seem to end in a black hole, SEBI acted with extraordinary alacrity in this case. It even called in the economic offences wing (EOW) of the Delhi police, who also acted with great promptness to ‘confirm’ that there was an ‘organised’ attempt to ‘defraud and missell’. SEBI’s press release says that a first information report (FIR) has been lodged, but does not bother to tell us whether the tricksters were arrested and, if not, why not.

SEBI’s says it ‘suspects’ that the number of “victims of such fraudulent attempts could be much higher” and cautions people to verify the credentials of anyone approaching them with such dubious schemes. This only raises several questions. First, what is a ‘victim of a fraudulent attempt’? Was anyone really defrauded? Wouldn’t any decent financial advisor, or even a distributor, have told the complainant that the scheme seemed dubious on the face of it? But wait, financial advisors and distributors have become scarce due to SEBI’s own policies of the past five years. While it is nice to know that one unnamed investor received such a prompt response from SEBI, we wonder how the regulator will protect those who fall for foolish inducements. On 11th April, the Times of India reported that a doctor—Usha Mehta—parted with a hefty Rs25 lakh to a gang of fraudsters who claimed the ability to multiple currency notes using a chemical. How can anybody protect people from such gullibility? What we need from SEBI is similar promptness in brazen cheating by registered intermediaries.

Comments

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Vaibhav Dhoka

1 decade ago

These gang of cheaters are obtaining e data from some source and call gullible people like old mutual fund investments or lapsed policies etc.One has to be over cautious while attending such calls.