Millennium Post

Sebi unearths SMS scam, warns of unsolicited tips

Using its newly-granted powers to access call data records and conduct surprise visits, capital markets watchdog Sebi has unearthed a large-scale SMS scam wherein fraudsters were luring gullible investors with promise of daily returns of up to Rs 75,000 through mobile messages. As an interim measure, Sebi has restrained two individuals and four entities associated with them from direct or indirect dealings in securities markets till further direction, while they have also been asked to cease and desist from acting as investment advisors and portfolio managers.

Besides, they have also been asked to immediately withdraw and remove all their advertisements, representations, websites and other materials in relation to their advisory services.

Sebi swung into action last month after it noticed certain entities offering intra-day tips and stock advisory services through SMSs via mobile phones. The messages being circulated by them included promises of Rs 5,000-75,000 daily earnings in ‘equity and MCX market with our confirm intraday tips” and investors were asked to call on given numbers for “sure shot call’.

Sebi began its investigation and obtained details of the call data records of the telephone numbers used for sending such SMSs. It then made a surprise visit on the premises of one Imtiyaz Hanif Khanda and his maternal uncle Vali Mamad Habib Ghaniwala.
Sebi has also got powers for search and seizure operations, among others. Passing an order in the case, Sebi said its probe prima-facie found that the said persons through their proprietary concerns, Right Trade, Sai Traders, Bull Trader and Laxmi Traders, were providing unauthorised investment advice.

Right Trade was soliciting business of portfolio management services from the public without being registered as a portfolio manager. The entities had made misrepresentations with unrealistic claims, false statements such as having office in various countries, FII-based calls, jackpot calls, etc. ‘They also made representation in reckless and careless manner in their messages and website suggesting facts which are not true,’ Sebi said.

Sebi said the entities “were engaged in providing intraday tips for a consideration/profit sharing under a plan under which the trading tips are provided after depositing registration fees into account of the entity as an advance.” They were also promising ‘jackpot’ calls in global markets through different plans, including a monthly package of $300 and a ‘pay per call’ 30 per cent profit sharing scheme. The investors were given details of bank accounts for depositing the money.
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