An 88-year-old chartered accountant lost Rs 197 crore in a stock market scam: How was he duped?
According to police, an 88-year-old retired chartered accountant from Vasana in Ahmedabad has reportedly lost Rs 197 crore in a stock trading cyber scam. In an FIR filed with the Cyber ​​Crime Unit in Ahmedabad, Madhukant Patel describes how the scam unfolded: It began in the first week of February when he received a message on WhatsApp from an unknown number. The sender introduced himself as Sunil Singhania and claimed to be working with a stock market professional named Karanveer Dhillon.
Singhania invited him to join a WhatsApp group called “Stock Vanguard 150” where Singhania and Dhillon started sharing various tips and tricks on stock investment. There were several other participants in the group. Later, the Vasana resident was added to another WhatsApp group called “Stock Vanguard (XM-5)”, the FIR stated. Singhania and Dhillon used to video conference on WhatsApp to share investment advice. Within a month, some of the group members started posting about the profits they made in the stock market based on the tips shared by Singhania and Dhillon. Believing those claims to be genuine, Patel started investing funds in the stock market. The fraudsters asked him to log in to a website operated by them called “app.alicexa.com”.
The website appeared genuine as it showed updates on various stocks, prices, details of buying, selling and trading shares. The senior citizen started trading small amounts based on the tips he received on the WhatsApp group and made huge profits. This gave Mr Patel the confidence to invest Rs 1.97 lakh in various stocks between March 12 and May 3, 2024 based on the buying and selling tips provided by Singhania. Mr Patel became suspicious as Singhania told him that he would be able to get shares even after the IPO closes and that he could buy shares on the website even if the price hit the upper limit. The octogenarian received several IPO allotments on the listing day and sold them. Singhania time and again assured him that his money was safe. When the CA tried to withdraw Rs 1.5 lakh, the fraudsters told him that he would have to pay 15% tax to receive the money. Thinking it was a legitimate procedure, Mr Patel paid Rs 1.87 lakh to Singhania. However, the fraudsters again demanded payment of 1% of the total portfolio amounting to about Rs 50 crore on the fraudulent trading website. Realising that he had been duped, Patel went to the Cyber ​​Crime Cell in Ahmedabad and filed an FIR against “unidentified persons” under various sections of the IPC.
Stock market scam: Another loss of Rs 113 crore
In another stock market scam, a Deputy Mamlatdar from Vastral, Ahmedabad, has allegedly lost Rs 113 crore. In his complaint filed with the Cyber ​​Crime Unit, Gandhinagar, Deputy Mamlatdar Jayendra Chauhan claimed that his troubles began on April 3 when he was searching for stock market tips on Facebook. Chauhan stumbled upon an organisation called Vanguard Club V5, which featured well-known investment analysts. He then joined the club’s app. The moment he logged into the app, he received a link to F&FTPL on his mobile phone, where he was asked to share his Aadhaar card details to open an account and deposit Rs 25,000. Based on tips shared by “Prof. Ganesh Ranga” through the app, Chauhan started trading on the app and made profits. Encouraged by the initial profits, he invested another Rs 1.13 crore between April 4 and April 29, 2024. His dream of making money in the stock market turned into a nightmare when he received a message on April 30, 2024, that Ranga had been arrested in a money laundering case. Members of the group were asked to deposit 30% of their balance as a refundable deposit to help Ranga. Members could withdraw their balance only after making the deposit. Unable to access his money, Chauhan approached the police, according to a TNN report.
Stock market scams on the rise: How scammers trick people. Learn how the “pig slaughter” scam works
Chauhan and Patel are two of the thousands who have fallen victim to a series of stock market scams. These scams are usually perpetrated through various social media platforms such as Facebook, Instagram, WhatsApp, and Telegram. These stock market scams are often referred to as “pig slaughter” scams where fraudsters lure potential targets with the promise of huge profits and eventually take their money. Scammers resort to various tactics ranging from creating fake websites, developing fake stock investment apps to creating shady WhatsApp groups where various members rejoice in the brilliance of the scheme. Scammers often create fake advertisements claiming to be associated with reputable market analysts or pose as representatives of reputable companies. First, they try to gain the trust of their targets with various strategies such as offering free stock recommendations, sharing screenshots of stock price movements, providing access to foolproof trading websites, messaging and sharing success stories of customers who have already reaped high profits thanks to the fraudsters. Scammers commonly use personal anecdotes and promises of high profits to manipulate individuals into investing large amounts.
How to spot and protect yourself from stock market scams
If someone approaches you tomorrow, how can you spot these trading and stock market scams on various social media platforms like WhatsApp, Facebook, Instagram, Telegram etc? ET Wealth Online We spoke to various experts to find out how to spot stock market scams. Read more:
1) Too good to be true: promises of unrealistically high profits
The first thing that comes to mind is unrealistic high returns from the stock market, say doubling or tripling your money in a few weeks. Vikas Gupta, CEO and Chief Investment Strategist, Omniscience Capital, says, “The most basic way to protect yourself from stock market scams is to avoid greed. The stock market is a gambling ground and no regulation or regulator can save anyone who thinks they can double or triple their money in a day or a few weeks. It is important to understand that stock market growth reflects underlying GDP growth driven by business growth of listed companies and typically generates 12% to 15% returns over 3-5 years. A few may achieve 25% to 30% returns in the long term, but anything beyond this is unsustainable. If someone promises or guarantees such high returns, you should be very suspicious of their intentions.”
2) Always ask for a valid SEBI/RBI license before taking any investment advice.
To spot if someone is trying to scam you, be wary of unwanted communications like unexpected calls, emails, messages from unknown sources. “If you join a WhatsApp group, find out who the admin is. If it’s a finance-related group, ask for their registration number and verify them with SEBI or any relevant licensing platform,” says Gaurav Jalan, founder and CEO, mPokket. Try to limit your interactions with verified WhatsApp accounts or verified Truecaller accounts.
Abhishek Kumar, SEBI registered investment advisor and founder of SahajMoney.com, says, “To protect yourself from such scams, don’t believe everything they say. Ask for proof so that you can independently verify the claims. Also, never deal with unregistered entities. Check their qualifications on the SEBI website before handing over your money.” To check the legitimacy of an advisor or app, click on this link.
3) Investing through a new app or website? Check if it’s real or fake
Whatever app you use to invest, make sure you check how legitimate it is. Jalan says, “If it’s a stock investment app, look for a SEBI license. If it’s an NBFC, look for an RBI license.”
He advised people to refrain from downloading APK apps that are not listed on the Google Play Store or Apple Store and to be wary of unsolicited messages and calls offering prizes, lotteries, loans or high-return investments.
4) Do not share your passwords or OTPs with others
As a precaution, change your passwords frequently. Opt for two-factor authentication. Never share your personal financial details, passwords, or login credentials with anyone, even if they claim to be from a reputable company, firm, or bank, adds Jalan. Don’t use common credentials for investments. If common credentials are shared among a group, it may be a scam.
