Retired MoD official swindled of Rs 2.9 crore in share trading fraud

The Whatsapp group had the name that gave an impression that it was operated by a brokerage firm and members discussed ways of getting high profits on stock investments. The administrators were discussing a particular application that ensured huge profit margins for them.

In the group, a man, who identified himself as a ‘professor’, and another, who claimed she was a trading expert, regularly posted links of online tutorials on stock market operations and trading. They claimed that they were from a US-based brokerage firm.

Sometime after joining the group, the complainant was sent a link to the phone-based application, which he downloaded on his phone. Probe now suggests that the phone-based application was fraudulent.

Based on the messages sent to him, the complainant started sending specific amounts to the bank accounts as directed. All these fund transfers to fraudulent accounts were reflected as his investments on the phone-based application, which was showing corresponding high gains against the total money sent.

Over several weeks, the complainant was manipulated into making close to a dozen transfers totalling Rs 2.35 crore against which the corresponding gains on the app was around Rs 8 crore. When the complainant tried to withdraw the sum, he was asked to pay Rs 55 lakh as commission and was told to wait for a month. He followed the instructions and paid the amount.

However, soon the administrators of the group, the professor and trading expert went incommunicado. The complainant even went to the addresses of the firm in Mumbai and Delhi, as given to him by the suspects. These addresses turned out to be fake. The complainant subsequently approached the police and filed a complaint.

In an advisory issued in this regard on February 26, the Securities and Exchange Board of India (SEBI) said, “Fraudsters are enticing victims through online trading courses, seminars, and mentorship programs in the stock market, leveraging social media platforms like WhatsApp or Telegram, as well as live broadcasts. Posing as employees or affiliates of SEBI-registered Foreign Portfolio Investors, they coax individuals into downloading applications that purportedly allow them to purchase shares, subscribe to IPOs, and enjoy “Institutional account benefits”—all without the need for an official trading or Demat account. These operations often use mobile numbers registered under false names to orchestrate their schemes.”