SEBI Ramps Up War on Cyber Fraud, Seeks States' Support to Shield Investors
- Regulator seeks state support to fight rising cyber fraud in securities markets.
- Fraudsters use WhatsApp, Telegram, YouTube, and other platforms to mislead investors.
- SEBI to monitor penny stock manipulation, act against finfluencers, and train state officials.
The Securities and Exchange Board of India (SEBI) is intensifying its crackdown on cyber fraud in the securities market and has sought active support from state governments to protect investors from rising online scams.
SEBI Chairman Tuhin Kanta Pandey, who took charge in March, has written to chief secretaries across states, asking for collaboration to spread awareness about cyber frauds that are causing heavy losses to investors. He has also proposed setting up a working group that would include representatives from states, police, and SEBI officials. The regulator has offered to train state officials in handling such cases effectively.
The move comes amid a sharp increase in scams misusing social media platforms like YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, and even mobile app stores. Fraudsters are reportedly creating fake profiles, impersonating registered market experts, and offering buy-sell-hold recommendations under the guise of 'investor education'. Many of them operate through WhatsApp and Telegram groups, posing as educational platforms to lure unsuspecting investors.
In his letter, Pandey warned that these entities, often working with others, are misleading people with manipulative and unlawful content. SEBI has already engaged with major social media platforms to take down such illegal posts.
The regulator is also closely monitoring the manipulation of penny stocks and has rolled out strict measures against unregistered investment advisors, research analysts, and so-called 'finfluencers' who promise unrealistic returns. Stock exchanges have been instructed to act tough against unauthorized schemes and fraudulent market practices.
By involving states, SEBI aims to create a wider awareness campaign and strengthen the fight against cyber fraud, ensuring better investor protection in a rapidly growing digital financial ecosystem.
