The National Stock Exchange (NSE) has cautioned investors of two alleged fraudsters who allegedly promised guaranteed returns to investors.
The NSE released details about two alleged fraudsters who promised inventors assured returns on stock market investments and then asked for their trading credentials. Here are some tips on how to keep your trading credentials safe.
The National Stock Exchange (NSE) has cautioned investors of two alleged fraudsters who allegedly promised guaranteed returns to investors.
The accused associated with ‘Piramid Solution’ and ‘Wings2Trade’ allegedly promised investors assured returns on investments in the stock market and also requested their trading credentials.
The stock exchange informed investors of the incident, and also named and provided the contact information of the perpetrators.
Further, NSE reminded that the accused are neither members nor authorised persons of any registered member of the National Stock Exchange of India Limited.
“It has been brought to the notice of the Exchange that person named Archana Patel associated with entity named ‘Piramid Solution’ operating through mobile number 7016252026 is providing assured/guaranteed returns on investment in stock market,” NSE said in a release.
“The above-mentioned person/entity is also offering to handle trading accounts of investors by asking investors to share their user ID and password. Naga Rathnam associated with entity named 'Wings2Trade' operating through mobile number 9063288999 is offering to handle trading accounts of investors by asking investors to share their user ID and password,” the statement added.
NSE warned investors not to subscribe to any of these schemes or products offered by any person or entity offering guaranteed returns in the stock market. This is prohibited by law.
Further, it advised investors not to share their trading credentials such as user id/ password with anyone.
Precautions To Take
It is important that you do not share your login credentials with anyone so that they can trade for you, because once your credentials are compromised, it is possible to move money in a number of ways. Scammers can buy penny stocks or illiquid option contracts.
They purchase illiquid option contracts at a price higher than the theoretical price and cover them back quickly at a lower price. Further, you should not share any One Time Passwords (OTP) that you receive on your registered mobile number or e-mail ID, since these can be used to transfer shares from one account to the next. It is a good idea to freeze your dematerialised account if you intend to not use it for a long period of time.
Reminder Issued In Investors’ Interest
NSE reminded that such prohibited schemes as run by the accused are neither approved nor endorsed by the exchange, so investors participate at their own risk, cost, and consequences.
NSE reminded that investors won’t have any recourse to the exchange dispute resolution mechanism and investor grievance redressal mechanism of NSE on any kind of disputes relating to such prohibited schemes.
Further, the benefits of investor protection are not available in such cases. NSE has established an Investor Protection Fund to compensate investors in the event of defaulters’ assets not being sufficient to meet investors’ admitted claims. A fund trust recommends compensating investors for insufficient funds in the Defaulters’ Account to meet the admitted value of their claim, subject to a maximum limit of Rs 25 lakh per investor.