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Sebi warns investors to stay away from ponzi schemes


Thursday, 30 July, Mumbai : Sebi chairman UK Sinha on Thursday said small investors should stay away from various ponzi schemes which promise very high returns in a short duration.

Speaking at a financial literacy awareness campaign here, Sinha stated that there are numerous firms running ponzi schemes in India which siphoned of thousands of crores of rupees from unsuspected investors through such fraud schemes.

“Do not fall for schemes which assure unbelievably high returns in a very short time. There are many companies in India which have siphoned off thousands of crores of rupees of investors through such ponzi schemes. Many ponzi operators are also behind bars for duping investors,” Sinha said in his speech.

He advised investors to save themselves from ponzi scheme scamsters by checking their credentials first.

“Stay away from such schemes, or else you will lose your hard earned money. If someone comes to you and promises high returns, ask him if his company is registered with Sebi or Reserve Bank of India (RBI). If they are not registered, then you must refrain from investing in that company,” Sinha said.

Though Securities and Exchange Board of India (Sebi) has been taking action against such firms, Sinha said investors may not get back their money easily.

“Many such companies have usurped poor people’s money. We have also taken action against 200 such firms. However, no matter how stern action we take, it remains a challenge to get back that money and return it to investors.

“It may take years due to several procedures. Thus, the best way is to remain alert and stay away,” Sinha added.

Asking investors to use Sebi’s toll free number as well as e-mail facility to get guidance or lodge a complaint, Sinha said, “If you are not sure if some scheme is legitimate or not, then you can dial our toll free number 1800-227575 to get our advice.

“You can also email your queries and complaints. Within last six months, we have received around 1.5 lakh calls seeking our guidance.”

The mass awareness programme was organised by the Indian School of Microfinance for Women, Ahmedabad.

Apart from Sinha, BSE Ltd MD and CEO Ashish Kumar Chauhan was also present to give guidance to more than 200 women participants from the middle and lower income group.

“Many from this city were cheated by such ponzi scheme scamsters in the past. Some of the schemes were floated in the name of gods to convince people, but ultimately, all such schemes are fraudulent. It is time to realise that no one can double your money in just six months or one year,” Chauhan said.


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