Trading Scams News, Stock Market Frauds: In today’s fast-paced financial world, scammers are using increasingly sophisticated tactics to exploit unsuspecting
investors. From fake trading apps to deepfake videos and illegal "pump and dump" schemes, fraudsters are everywhere. The Securities Exchange Board of India (SEBI) and the National Stock Exchange of India Ltd. (NSE) have issued this critical advisory to help you recognise these deceptive strategies and safeguard your hard-earned money. Read on to learn about nine common scam tactics and practical steps to protect yourself.
Spot The Scammers Before They Spot You!
Here’s how you can safeguard your investments by recognising these everyday tactics.
9 Tactics Scammers Use - Investors must be Aware of
1. "FOREIGN PORTFOLIO"
Scammers provide fraudulent trading platforms falsely claiming or suggesting affiliation with its registered Foreign Portfolio Investors (FPIs). These platforms are misleading individuals by claiming to offer them trading opportunities through FPI or Foreign Institutional Investor (FII) sub-accounts or institutional accounts with special privileges.
2. “FAKE TRADING APPS”
Scammers create unregulated trading apps that appear legitimate to lure investors into disclosing their account information. The apps' ‘apk’ files are sent to investors to download using various social media and are not listed on official stores. Never download unknown files even if sent by friends or contacts listed on your phone or computer.
3. “UNREGISTERED INVESTMENT ADVICE VIA SOCIAL/MESSAGING PLATFORMS”
“FOLLOW MY CHANNEL” and “JOIN MY CHAT GROUP” are amongst the biggest red flags to spot! SEBI registered stockbrokers NEVER OFFER TIPS and advice on chat groups. Do not trust any testimonials or credit receipts from other investors claiming to have received expert advice and returns from these chats as they are fabrications designed to lure you.
4. “DEEPFAKE VIDEOS OF INFLUENCERS/PUBLIC FIGURES”
The faces of celebrities, public figures, professors, chief analysts, people of repute, the Govt. official emblem, and other well-established organizations are often illegally used to convince investors of their endorsements. Never subscribe to unverified claims and profiles. In a world of rapidly developing AI, accept nothing at face value.
5. “OPINION TRADING”
Opinion trading scams in the securities market mislead users into betting on financial outcomes under the guise of legitimate trading, without involving actual securities. These platforms mimic stock market behavior but operate outside SEBI’s regulation, exposing users to high risk and no legal protection.
6. “GOOD DIGITAL PRACTICES”
Registered stockbrokers never ask for your login ID & password. Providing your account credentials to anyone gives them direct access to your funds. This ultimately leads to your account being flushed and deleted without any chance of recovery. Change your passwords regularly and never share your credentials with anyone.
7. “PAID TRADING COURSE WITH GUARANTEED RETURNS...”
Don’t fall for stock tips or investment advice provided under the guise of providing free / paid trading courses. "You’ll definitely make money”-nobody can promise that. Scammers also use fake success stories and flashy ads to trick people into paying. If someone guarantees profits, it’s a big warning sign-stay away! Fake agents may also present themselves as SEBI-registered intermediaries who are making large returns through stock trading. If they offer to trade on your behalf with advertisements that say – ‘ASSURED’‘GUARANTEED’ ‘5X’ ‘10X’ and sometimes even ‘100X RETURNS!’ - it’s a SCAM!
8. “PUMP & DUMP SCAM”
Don't fall for the hype. It is a fraudulent market practice that may leave investors with significant loss. Scammers buy stocks in large quantity and then artificially inflate its price using fake news and hype. Scammers then sell these stocks which crashes the prices.
9. “DABBA TRADING”
Dabba Trading is an illegal trading in which prices of securities on recognized stock exchanges are used as benchmarks and the investor’s trades do not get executed on the stock exchange system but in the dabba operator’s books only. Trading outside the Stock Exchange through unregistered entities is prohibited by law. No compensation or support is available for such dealings. Always trade with SEBI registered intermediaries.
How can You Protect Yourself?
Do not get lured with guaranteed / fixed returns in the securities market. Guaranteed returns are illegal in the securities market. Do not accept any offer at face value.
Avoid unsolicited messages from unknown sources. Verify any news from official websites like SEBI, NSE, company website.
Do not download unregulated trading apps or join chat groups offering advice.
Deal only with SEBI registered intermediaries. Verify the details of the intermediary on https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes
Download trading apps of only SEBI registered Trading Members from App Store or Google. Verify the details of the apps on https://investor.sebi.gov.in/Investor-support.html
Transfer funds only to registered client bank accounts of the stockbroker. Verify the bank accounts on https://enit.nseindia.com/MemDirWeb/form/tradingMemberLocator_beta.jsp
Starting October 1st, 2025, SEBI has introduced Structured UPI mechanism with features like thumbs-up inside a green triangle & SEBI check before making payment to any SEBI registered intermediary. This feature facilitates you to make payments only to SEBI registered intermediaries. (abc.brk@validbank)
Report any fraudulent activity to www.cybercrime.gov.in or call 1930. For investor support call 1800 266 0050.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
