Sebi steps up fight against cyber frauds, seeks support

NEW DELHI: Stock market regulator Sebi is intensifying its fight against cyber fraud and has sought support from the states to prevent misuse of social media platforms and protect investors across the country from the menace.Sebi chairman Tuhin Kanta Pandey, who took charge in March, has written to chief secretaries, seeking collaboration to “spread awareness” against rising cyber frauds, which is leading to huge losses to investors.A plan to set up a working group comprising representatives of states, police and officials from Sebi has been proposed. Sebi has also offered to train state officials to fight cyber frauds.The urgency to take online scams has been triggered by the sharp uptick in frauds linked to the securities market, misusing various social media platforms, such as You Tube, Facebook, Instagram, Whatsapp, microblogging site X, Telegram, Google Play store and Apple Store.From creating fake profiles to portraying themselves as experts in the securities market by impersonating registered intermediaries, the alleged fraudsters are providing recommendations to buy, sell or hold securities in the name of investor education.“These entities, in association with other supporting entities, form Whatsapp, Telegram groups where they portray themselves as educational groups, thereby inviting innocent investors to join these groups,” Pandey said in his letter to the chief secretaries.Sebi has also stepped up its monitoring of “misleading, manipulative, unlawful and illegal content” on social media platforms and has engaged with these platforms to take down “unlawful content”. The stock market regulator is keeping a close watch on “manipulation” of penny stocks and has unveiled a raft of measures against entities providing services as unregistered investment advisor or research analyst promising astronomical returns. It has also cracked down on the “finfluencers” on social media platforms.Stock exchanges have also been told to clamp down on frauds linked to securities market and take strict action against “unauthorised schemes and market practices.”