INVESTORS have to remain wary of unscrupulous quarters who will try to take advantage of others’ vulnerabilities especially during this challenging period.
Against such backdrop, the Securities Commission (SC) has been focusing its investor protection initiatives by ramping up its ongoing fight against investment scams as well as dealing with unlicensed market operators and investment advisers.
In this regard, the stock market regulator has seen a significant jump in the number of complaints and enquiries received.
As of end-September, the SC has received over 2,000 queries and complaints about illegal investment schemes or scams which were more than double the total number reported in 2020.
Typically promising high returns within a short period of time – with little or no risk – these scams are frequently promoted through social media channels with payments required to be made into mule bank accounts operated by scammers.
“Please be especially cautious of such investments. When investing, never deposit your money into someone’s personal bank account,” advised SC chairman Datuk Syed Zaid Albar in his welcoming remarks at the launch of the Virtual InvestSmart Fest 2021.
The three-day eighth instalment of InvestSmart Fest coincides with the Financial Education Network’s (FEN) Financial Literacy Month 2021 and the IOSCO World Investor Week 2021, a global effort among capital market regulators to raise awareness about the importance of investor education and empowerment.
Taking swift action to combat these scams, the SC has made 202 new entries in its Investor Alert as of end-September alone compared to 134 entries for the entire of 2020.
“This year alone, with the help of the Malaysian Communications and Multimedia Commission (MCMC) and Facebook Malaysia, we have managed to block 97 websites and seven Facebook accounts,” revealed Syed Zaid.
“Aside from investment scams, we have also seen an increase in the number of activities carried out without the necessary licence or registration with the SC.”
Thus far this year, the SC has taken enforcement action against two foreign digital asset exchanges (DAX), reprimanding and blocking their websites for operating illegally in Malaysia.
“Investors should be aware that those who trade on unregistered DAXes are not protected under Malaysian securities laws and are exposed to fraud and money laundering risks,” noted Syed Zaid.
As of Sept 30, the SC has included 38 operators on its Investor Alert List comprising entities and related individuals for carrying on the business of investment advice without a licence.
The market regulator further directed 29 of these operators to cease and desist from providing unlicensed investment advice. These activities were typically carried out by self-proclaimed “investment gurus” who offered their services through subscription-based private chat groups on Telegram, WhatsApp and Facebook. – Oct 8, 2021
