Sebi Issues Caution Against Unregistered Entities Promising High Returns

The Securities and Exchange Board of India (Sebi) has issued a warning to investors, cautioning them against investing money with unregistered entities that promise assured or exceptionally high returns on investments. This advisory comes in response to the increasing trend of unscrupulous entities and online platforms falsely claiming to be registered with Sebi as intermediaries.

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Due Diligence and Verification

Sebi emphasizes the importance of conducting due diligence before investing in the securities market. Investors are advised to verify the registration status of any entity claiming to be a Sebi-registered intermediary. This verification can be done through the Sebi website or by contacting Sebi directly. Additionally, investors should also check for any enforcement actions taken by Sebi against the entity.

Risk of High Returns

Sebi reminds investors that the principle of higher returns comes with higher risks of losing money altogether holds true in the securities market. Investments offering high returns usually involve high risk, including fraud risk. There can be no guarantees of assured returns in the securities market.

Beware of False Claims

Sebi has observed that these unscrupulous entities and online platforms often entice the general public by showcasing fake certificates purportedly issued by Sebi and promising or implying assured, high returns on investments. Investors are cautioned against placing their money with any entity based on such claims.

Sebi urges investors to exercise caution and vigilance when making investment decisions. Investors should only deal with registered intermediaries and should not be swayed by promises of assured or exceptionally high returns. By following these guidelines, investors can protect themselves from potential financial losses and fraudulent activities.