SECP Issues Public Alert on Surge in Social Media Investment Scams

The Securities and Exchange Commission of Pakistan (SECP) issued a public warning on November 1, 2024, alerting people to a surge in fraudulent investment schemes proliferating on social media platforms such as Facebook, Instagram, and WhatsApp.

These fraudulent schemes are masquerading as legitimate investment advisory services or training courses, aiming to deceive people into investing their money. The fraudsters lure individuals by making false promises of extraordinary profits with minimal risk and offering so-called "insider tips" in exchange for membership fees or investments via the advertised platforms. To appear credible, they often misuse the names, images, and logos of well-known business professionals, reputable companies, SECP, and the Pakistan Stock Exchange.

The SECP said that it has been issuing public warnings to caution the public against these fraudulent schemes since August 2024. The regulator also deployed a pop-up warning message on its official website. 

source: SECP’s pop-up warning message

To ensure a comprehensive and coordinated response, the SECP has escalated the issue to key regulatory and law enforcement agencies, including the Federal Investigation Agency (FIA), the Pakistan Telecommunication Authority (PTA), and the State Bank of Pakistan (SBP). These agencies are expected to take appropriate legal action against the individuals and entities involved in such fraudulent activities. Furthermore, the SECP has reached out to Meta, urging immediate steps to safeguard users in Pakistan and maintain the integrity of its platforms.

The SECP's latest advisory urges the public to remain vigilant and verify the authenticity of any investment opportunity before committing funds. It also advises individuals not to share personal or financial information with unverified sources or through social media platforms to avoid falling victim to financial scams.