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Capital market regulator Securities and Exchange Board of India (SEBI) has cautioned the Association of Mutual Funds in India about Telegram groups masquerading as existing mutual funds in attempt to defraud gullible investors.
In a letter written to AMFI, SEBI said certain Telegram groups in the name of existing mutual funds may be adopting new methods to defraud investors by camouflaging as registered mutual funds.
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The action follows SEBI’s inspection of Karvy’s portfolio management activities in December 2019Some of the popular groups are Paytm Doubling MFs and Paytm Doubling Funds Mutual which have 90,818 and 86,435 users respectively. This apart, there are Tata MF Investment (77,509 users), Bitcoin MF (57,726), Tata MF Trust (56,368), and HDFC MF Money Doubling (52,240).
In view of the proliferation of such activities on social media which are dubious in nature and not in the interest of investors who intend to invest in MFs, Sebi asked AMFI to direct registered MFs to be vigilant and regularly monitor social media to identify the entities that are camouflaging themselves to lure investors.
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Ease of trading. Investors who trade in both segments with a same broker can settle on a net basisBased on this monitoring, AMFI and MFs should take prompt action including issuing public notice and registering police complaints to ensure that these entities stop misusing MF names, said SEBI.
Both AMFI and MFs should also inform other stakeholders including distributors, brokers and investment advisors on these developments to perform due diligence and promptly take appropriate action, it added.
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