If you invest in the stock market, be cautious of scams and frauds being carried out by several share trading companies in India. Some of these companies are really renowned and they in collaboration with some foreign companies, lure investors into investing millions without any additional capital and then force investors to pledge the shares against the total holding investment of the investor, defrauding them of crores of rupees. Many investors who have fallen victim to this fraud are now seeking justice from agencies such as the Enforcement Directorate (ED), SEBI, the police, the Consumer Court, and Central Bureau of Investigation (CBI), and other agencies.
Not only new and fake companies but also some reputable companies are getting involved in this fraud to increase their profits. Senior citizens preferably women who have invested their lifelong earnings in the stock market after retirement are mainly targeted for fraud.
In this scam and fraud, investors are offered the illusion of earning lakhs and crores of rupees within a month without investing any additional capital. Investors are pressured and given fake assurance of only profits by investing in these companies’ schemes. Once investors fall for the scheme, based on their existing investments in the stock market, a pledging of shared is done and a loan is created. The investor is then compelled to buy new shares of high value or forced to invest in the USD market and the entire amount of the loan created through the pledging of shares is invested in the dollar market. It is lamentable that in this scam, these companies also charge a 15 to 20 percent commission for purchasing shares and do not provide true prior information to investors regarding the commission. They even try to mask the total amount invested by the elderly users and execute the trade just on the telephone call.
Once the loan period for pledging shares is completed, which is for 15- 20 days, investors are informed that the market value of the new shares they purchased has significantly dropped within a week. Therefore, they are required to repay the loan using their lifelong earnings; otherwise, they will be liable for interest payments, and if the loan and interest are not paid, all their old shares will be confiscated. Many individuals have fallen victim to this scam worth lakhs of rupees conducted by some reputable companies. Victims of this scam are now seeking justice from the government and relevant agencies.
