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New Stock Market Fraud Alert!

 Let me share the latest stock market fraud going around the country. The terms you will be hearing are:

  • Institutional Trading
  • Block Deals
  • AI Algorithms, and
  • Confirmed IPO allocations

Modus Operandi

  1. You will be searching for some Stock Market resources on the Social Media Websites
  2. Advertisement lures you with 10x to 30x returns
  3. Invitation comes to join a WhatsApp or Telegram Group
  4. You will find several people posting their trade screenshots
  5. Each one of these screenshots shows 30%-50% gains
  6. An 'expert' will help you with formalities to open an account
  7. You have to invest anything from 1 - 10 lakhs (1 million)
  8. You will deposit the money into various bank accounts (why?) as advised by the expert
  9. You will get an advice to 'buy' a stock when they say
  10. You will get an advice to 'sell' a stock when they say
  11. You can't sell a stock whenever you want. The sell button is disabled.
  12. First few days, you will be getting 20-30% returns
  13. You are then pushed by the agents to invest more
  14. Assured by the returns you will be funding your account more
  15. 'No Demat' account is required (How?)
  16. Everything happens in 'their' app (So they can show whatever gains they want)
  17. They'll allow you to withdraw profits first few times
  18. Later on, you will not be able to withdraw your profits or your investments
  19. Similar approach to IPO. They will ask you to invest in an upcoming IPO. To your surprise, you will get 100% allocation. They will ask you to introduce more funds.

It looks like a mafia, run under the banner of some big stock trading companies. Often linked to foreign companies. Once you are inside, you can never come out. More luring with schemes follows. Introduce your friends get 10% discount on your brokerage. One-month 300x returns, etc. Aim of this mafia is to loot small amounts from large number of people. Assume 100,000 people investing 100,000 bucks to 1 million bucks every day. Imagine the amount of money the backend network makes per day.

Government has banned hundreds of loan apps that wiped-out the wealth of the middle class in India. Several people have committed suicide. This is one such platform.

Middle-class have been scammed several times in the past. Emu farm, multi-level marketing, binary gold purchase schemes, and Teak trees, etc.

Alert!

  1. Never buy stocks on the tips from WhatsApp, Telegram, and other Social Media websites
  2. Stay away from Trading platforms that says no need to have a 'Demat' account
  3. Limit yourselves with authorised trading platforms such as ICICI Direct, Kotak Securities, and HDFC Securities.
  4. Stay away from all new trading platforms, and apps.
  5. If you don't understand Stock market, stay away from it.
  6. If you have surplus, then invest little, invest regularly. Stay away from dramatic returns.
  7. Multi-bagger is a theory. Not for regular investors.
  8. Never introduce your friends to any of your Stock networks; even the intention is to help them earn money.
  9. Limit your exposure to manageable limits (of loss).
  10. Don't indulge in intra-day unless you can handle a loss.
  11. If you don't have time to learn stock market, invest in Mutual funds, in small amounts.
  12. Don't go for margin trading. You can't have more liabilities than your assets.
  13. Don't go for Futures & Options. This is not for part-time investors.
  14. If you are 'scammed' by any such platforms, openly share this to your friends and relatives so that they can be cautioned.

There is no easy way to make money. Only hard work pays. Anybody or any company claims there is an easy way to make money, your inner voice should say 'stay away', and 'it's too good to be true'.

Leave your comments if you have heard about, or experienced similar scams.

Source: Personal experience of one my contacts who has lost a lot of money.


Article by: Mohan K Madwachar

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