Investment advice on SMS: A perfect bait for the uninitiated

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Investors, unaware that the recommendation SMS which popped up on their smartphones were juicy baits, may lose their money. Investors, unaware that the recommendation SMS which popped up on their smartphones were juicy baits, may lose their money.
SummaryInvestors may feel safe about their investments, but scamsters can still leave you feeling sorry.

between March 13, 2013 and October 18, 2013.

Sebi noted, “During the period (March 13, 2013 to August 20, 2013), the Ranka Group bought a gross quantity of 12,11,21,440 shares and sold a gross quantity of 20,72,46,229 shares. Thus, the entities of Ranka Group had altogether sold a net quantity of 8,61,24,789 shares till August 20, 2013.”

It further noted that in the period between August 21, 2013 to October 18, 2013 the entities of Ranka group bought a gross quantity of 2,59,31,404 shares and sold a gross quantity of 12,08,06,688 shares and thereby sold a net quantity of 9,48,75,284 shares from August 21, 2013 to October 18, 2013.

Sebi in its order said, “Once Sebi started inquiring into the matter, the Ranka Group has started dumping and exiting their position in the scrip. It is noted that till October 18, 2013 they have sold a net quantity of 18,10,00,073 shares, thereby making the profit of Rs 6,00,11,512,” which it has now ordered them to deposit in an escrow account in a period of 30 days.

Learning for investors

The above case clearly shows the sophistication with which fraudsters collude to cheat retail investors and in this case they seem to have worked on a plan for over 18 months.

While it is Sebi’s task to protect investors from such manipulators and from people raising money through ilegitimate collective investment schemes, investors too need to learn and act responsibly when it comes to investing their hard-earned money and not let greed take over wisdom.

They can, however, hope that a stronger Sebi with more powers vested upon it will be beneficial to them. With the regulator getting more powers through the ordinance promulgated by the President, investors can feel more secure.

The ordinance not only provides Sebi wth powers to order disgorgement of unfair gains but also permits it to attach bank accounts and property, and even arrest a person for failing to comply with disgorgement orders or paying the monetary penalty.

Sebi now has the powers to recover the penalty imposed and investors can hope that they can get their money back to such perpetrators of crime.

case in point

Between February and March 2013, Sebi noticed a series of messages recommending investors to ‘Buy’ shares of SMS Techsoft Ltd at its ongoing price of Rs 0.45 and was giving a price target of Rs 5 for the scrip. Some messages even referred it as ‘Jackpot call’

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