The Securities and Exchange Board of India (Sebi) has asked the Association of Mutual Funds in India (Amfi), the industry body, to stay vigilant against bogus social media groups posing as asset management companies to trap and cheat potential investors.
"Mutual funds shall be vigilant and regularly monitor social media to identify entities/ groups which camouflage themselves as registered mutual funds or misuse the names of mutual funds to lure investors," Sebi said in a communication to Amfi on Wednesday.
The letter, which Outlook Money has access to, said, "Mutual funds should promptly take appropriate actions, including issuing a press release/public notice, filing FIR, etc., to ensure such entities/ groups are prevented from misusing names of mutual funds.”
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The Sebi warning comes after a media article revealed that fake Telegram groups have been targeting potential victims to defraud them by misusing the names of genuine mutual funds.
"These telegram groups may be adopting new methods to defraud the investors by camouflaging as registered mutual funds," the Sebi letter warned. It added that these dubious entities were making false promises of doubling investors' returns in a few days.
Some of them include Paytm Doubling Mutual Funds, Tata Mutual Fund Investment, HDFC Mutual Fund Trust Money Doubling, Unit Tareiders Pvt., Close Friends Traders, Trade Exchange, Tata Mutual Funds Trust, and Bitcoin (Mutual Funds), each having a user base of 50,000 to 90,000, Sebi said.
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In its letter, the capital market regulator directed Amfi to advise all its registered mutual fund houses to stay vigilant against dubious entities misusing their names on social media platforms and, if the need arises, issue public notices and register police complaints to stop such activities.
Earlier this year, Sebi had imposed a Rs 2.84 crore fine on six people for giving unsolicited stock advice through the Telegram channel "bullrun2017", which had a more than 50,000 user base. As part of efforts to help eliminate such threats, Sebi, in consultation with the Telecom Regulatory Authority of India (TRAI), had also issued guidelines to ensure only Sebi-registered intermediaries send investment advice via SMS.
