Sebi asks mutual funds to act against con Telegram channels, Legal News, ET LegalWorld – Legal Firms


The Securities and Exchange Board of India (Sebi) has directed mutual funds to act against dubious Telegram or social media groups posing as asset managers or associates created to con investors.

The capital markets regulator said in a communication to the industry on November 30, Telegram is rife with dubious groups masquerading as fund houses. Sebi’s warning to the industry comes in the wake of instances where investors have been defrauded by these telegram group operators, said three mutual fund industry officials.

These fake telegram channels are assuring investors that their money would be doubled in a matter of days, they said. Paytm Doubling Mutual Funds, Paytm Doubling Funds Mutual, Tata Mutual Fund Investment, Close Fund Traders, Unit Tareiders Pvt, Trade Exchange, Bitcoin (Mutual Funds), Tata Mutual Funds Trust, HDFC Mutual Fund Trust Money Doubling are the telegram channels named in Sebi’s communication to the mutual fund industry.

Many of these channels have 50,000-100,000 users each. For instance, the telegram group by the name Paytm Doubling Mutual Funds has a base of over 90,000 users. Similarly, Tata Mutual Fund Investment has a user base of over 77,000.

“These telegram groups may be adopting new methods to defraud the investors by camouflaging as registered mutual funds/associated with Mutual Funds,” said Sebi.

An email query to Sebi went unanswered till the time of going to print.

Mutual fund industry officials said these telegram channels use logos of the fund houses to make it look authentic. Some of them use the photos of well-known mutual fund officials, including fund managers, in the fake profiles of the administrators of these groups.

Last week, Kotak Mutual Fund warned investors regarding the fraudulent Telegram and social media groups and communities that promise steep returns. It said multiple social media entities over Telegram and other social media channels have misused Kotak Mutual Fund’s brand name, logo and spokesperson’s identity to misguide investors.

Mutual fund officials said the matter came to light after a few investors, who were swindled, complained to fund houses. Some of the funds approached the police but they were unable to file an official complaint with none of the aggrieved investors willing to come forward in the matter, said one of the mutual fund CEOs in the know.

“People are being swindled on the investment front and jobs. There are some fraudulent social media channels pretending to be mutual funds that are looking to recruit,” said the mutual fund CEO.

Sebi has asked mutual funds to constantly watch out for such suspicious telegram channels.

“The mutual funds shall ensure that all stakeholders such as distributors, brokers, investment advisors etc be sensitized to perform similar due diligence and promptly take appropriate action,” said the regulator’s communique to mutual funds on November 30.

Sebi has been trying to crack down on investment frauds perpetrated through Telegram channels and social media groups. Earlier this year, the regulator had accused some individuals and entities of taking positions in stocks before they were recommended to the members in their Telegram channels. Subsequently, they would sell these stocks, while investors would be left holding duds.


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