SEBI Issues Advisory on Unauthorized Virtual Trading Platforms: Warns Against Investor Exploitation

Mint has published an article shedding light on SEBI’s recent press release of November 04, 2024 wherein SEBI has cautioned the investors regarding unauthorized applications and platforms that offer virtual trading services, including paper trading and fantasy games based on stock price data of listed companies which are inter-alia in violation of Securities Contract (Regulation) Act, 1956 and SEBI Act, 1992. The article also emphasises on the fact that such advisory has been issued by SEBI to prevent such platforms from exploiting investors and that none of the following recourses will be available to investors since these platforms operate outside SEBI’s regulated framework: (a) Benefits of investor protection under SEBI/ Exchange(s) Jurisdiction including SCORES. (b) Investor grievance redressal mechanism administered by Exchange(s)or the online dispute resolution mechanism administered by Exchanges/Depositories.

In this background, Mr. Sumit Agrawal, Founder, Regstreet Law Advisors is quoted by Mint in their article titled ‘𝘚𝘌𝘉𝘐 𝘸𝘢𝘳𝘯𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘢𝘨𝘢𝘪𝘯𝘴𝘵 𝘶𝘯𝘢𝘶𝘵𝘩𝘰𝘳𝘪𝘴𝘦𝘥 𝘷𝘪𝘳𝘵𝘶𝘢𝘭 𝘵𝘳𝘢𝘥𝘪𝘯𝘨,𝘨𝘢𝘮𝘪𝘯𝘨 𝘱𝘭𝘢𝘵𝘧𝘰𝘳𝘮𝘴 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨 𝘴𝘵𝘰𝘤𝘬 𝘱𝘳𝘪𝘤𝘦-𝘣𝘢𝘴𝘦𝘥 𝘢𝘥𝘷𝘪𝘤𝘦’ wherein he has highlighted that “𝘉𝘺 𝘮𝘪𝘮𝘪𝘤𝘬𝘪𝘯𝘨 𝘴𝘦𝘤𝘶𝘳𝘪𝘵𝘪𝘦𝘴 𝘮𝘢𝘳𝘬𝘦𝘵 𝘢𝘤𝘵𝘪𝘷𝘪𝘵𝘪𝘦𝘴 𝘢𝘯𝘥 𝘱𝘳𝘰𝘮𝘪𝘴𝘪𝘯𝘨 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘳𝘦𝘵𝘶𝘳𝘯𝘴, 𝘮𝘢𝘯𝘺 𝘰𝘧 𝘵𝘩𝘦𝘴𝘦 𝘱𝘭𝘢𝘵𝘧𝘰𝘳𝘮𝘴 𝘤𝘢𝘯 𝘤𝘳𝘦𝘢𝘵𝘦 𝘢𝘯 𝘶𝘯𝘢𝘶𝘵𝘩𝘰𝘳𝘪𝘴𝘦𝘥 𝘵𝘳𝘢𝘥𝘪𝘯𝘨 𝘦𝘹𝘱𝘦𝘳𝘪𝘦𝘯𝘤𝘦 𝘵𝘩𝘢𝘵 𝘰𝘧𝘵𝘦𝘯 𝘭𝘦𝘢𝘥𝘴 𝘵𝘰 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳 𝘦𝘹𝘱𝘭𝘰𝘪𝘵𝘢𝘵𝘪𝘰𝘯”

He has also highlighted that that a recent case, for instance, involved a sophisticated WhatsApp fraud where the perpetrators used the former SEBI chairperson’s name to deceive and lure investors, with the scheme designed so convincingly that it seemed legitimate

The complete article can be accessed at https://lnkd.in/dAuKVKPz.

The Press Release is available here https://lnkd.in/dAuKVKPz

Readers can also access a similar article published by Mint quoting Mr. Sumit Agrawal titled ‘𝘚𝘌𝘉𝘐’𝘴 𝘉𝘦𝘦𝘧 𝘞𝘪𝘵𝘩 𝘝𝘪𝘳𝘵𝘶𝘢𝘭 𝘛𝘳𝘢𝘥𝘪𝘯𝘨 𝘈𝘱𝘱𝘴’ at https://lnkd.in/d9E4fpkD

Readers can send their comments to Regstreet Law Advisors at info@regstreetlaw.com

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