Source: BS
Context:
Amid a sharp surge in retail investor participation, the Securities and Exchange Board of India (SEBI) has strengthened its surveillance and technology-driven enforcement framework to tackle rising pre-investment scams.
SEBI Chairman Tuhin Kanta Pandey highlighted growing instances where aspiring investors are defrauded even before engaging with SEBI-registered intermediaries.
What Are Pre-Investment Scams?
Pre-investment scams involve fraudsters:
- Luring investors through fake trading apps
- Operating misleading WhatsApp or Telegram groups
- Promising guaranteed or abnormally high returns
- Diverting funds into personal bank accounts
In many cases, funds are siphoned off before investors interact with regulated brokers or investment platforms.
