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Fake Portfolio Screenshot Scam on Twitter, Telegram;  What Sebi Brokers Can Do To Curb It


“Behind every great fortune hides a great crime,” said Balzac. A stock market adaptation of this quote could be: “In every great bull market a great game of scam flourishes. Brokers siphoning off bank funds are a thing of the past, promoters manipulating their own stocks are now commonplace, as is the dressing of accounts to increase income.

Self-proclaimed market gurus sharing (fake) portfolios / trading positions on social media platforms to sell subscription services or technical analysis / derivatives trading workshops to gullible investors is the side game of this bull market; a game that has been going on for a while now. The target audience is the growing tribe of individual investors rushing to the stock market, fascinated by the near one-sided rise in stock prices over the past 18 months.

The retail frenzy in the marketplace is evident with the surge in the number of Demat accounts, brokerage firm trading accounts, mutual fund folios, and money coming from business plans. systematic investment (SIP) every month.

The problem of fake screenshots is most common on Twitter and Telegram, the two platforms that have become a hub of stock discussions.

Most of these investors are beginners, with little or no knowledge of how the stock market works. These so called gurus, or scammers, for lack of a better word, pose as seasoned traders and post screenshots claiming to be their current or recent stock portfolio / positions on social media platforms.

Screenshots are usually edited in Photoshop to show bogus profits that the trader never made in the first place.

The bait is used to trick new gullible traders who are asked to pay subscription fees to join private WhatsApp or Telegram groups where they will receive recommendations for actions. The fees range from a few thousand per month to tens of thousands for one year of service. Many of these private groups have thousands of paying members.

Alternatively, newcomers will be persuaded to sign up for workshops that promise to make them experts in technical analysis or options trading within days or weeks. These workshops also charge between a few thousand and a few tens of thousands.

The scam started small, Twitter handles and Telegram groups started posting fake MTM screenshots to establish their credentials in stock trading. They also made statements about their accuracy (usually 100%) and how their paying subscribers benefited from their calls. Scammers then went from fake screenshots to making videos to promote their claims. The videos illustrating the fake profits are edited either in video editing software or simply by modifying the values ​​in an HTML portfolio window of a broker’s page, as can be seen below.

https://www.youtube.com/watch?v=AbjzS0yZ0QA

People who operate subscription products based on such claims are not registered with SEBI as Registered Investment Analysts (RIAs). Sometimes the market regulator SEBI prohibits individuals and companies from making stock recommendations on the Internet when they are not registered as an AIR. But with such groups multiplying by the thousands, it is not clear whether the regulator has the manpower to tackle the problem.

A potential fix for fake MTM screenshots

Since the fraud relies on the fairly straightforward trick of manipulating values ​​on the holdings page, brokers may consider introducing an optional QR code on those pages. The QR code will contain an embedded link to a page hosted on the broker’s website, which will display the actual values ​​stored when the wallet page (with the QR code) was first loaded. Brokers can cache a copy of the user’s wallet / holdings page whenever they provide it to them through the website / app. Scanning the QR code will thus allow anyone to corroborate the values ​​allegedly present on the page.

Users should be aware that by sharing screenshots, they themselves have waived the right to privacy of their wallet data. And that the QR code simply serves as a verification tool.

Also, while activating the QR code remains an optional feature, users who wish to show their true benefits will be encouraged to activate it while those who do not may have something to hide!

The author, Nazim Khan is Business Director – Digital Content and Strategy at Quantent. A former journalist, he still keeps an eye on developments in the stock market and the technological space.

(Edited by : Santosh nair)

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