Stock Market Advisory Companies in Indore
Marketing fraud is the illegal practice of making false or misleading promotional claims for financial gain. That includes exaggerating the qualities of a product or service in advertising, selling imitations as the genuine article, and hiding side effects. The goal of marketing fraud is to contact individuals to solicit them for money or other items in exchange for something of little or no value. Part of marketing fraud is the promise of monetary gain, investment returns, or other types of rewards. False advertising is another type of marketing fraud.
Marketing fraud is one of the oldest types of fraud. It goes back much further than the snake oil salesmen who sold tonics that were cure whatever ails you." Consumers can usually protect themselves by adhering to the adage, "If it sounds too good to be true, then it probably is."
The Internet is fertile ground for marketing fraud because of anonymity and the ability to send spam email messages. Social media marketing fraud has also become a serious issue. Marketing fraud perpetrators may not even live on the same continent as their victims.
Many investors use the Internet and social media to help them with investment decisions. While these online tools can provide many benefits for investors, these same tools can make attractive targets for criminals. Criminals are quick to adapt to new technologies – and the Internet is no exception.
The Internet is a useful way to reach a mass audience without spending a lot of time or money. A website, online message, or social media site can reach large numbers with minimum effort. It's easy for fraudsters to make their messages look real and credible and sometimes hard for investors to tell the difference between fact and fiction. If an investment promotion grabs your interest, research the “opportunity” even before providing your phone number and email address. Otherwise, you may be setting yourself up to be targeted for investment fraud.
Social media, such as Facebook, YouTube, Twitter, and LinkedIn, have become key tools for the investors. Whether they are seeking research on particular stocks, background information on a broker-dealer or investment adviser, guidance on an overall investment strategy, up to date news or to simply want to discuss the markets with others, investors turn to social media. Social media also offers several features that criminals may find attractive. Fraudsters can use social media in their efforts to appear legitimate, to hide behind anonymity, and to reach many people at low cost.
While legitimate online newsletters contain valuable information, others are tools for fraud. Some companies pay online newsletters to "tout" or recommend their stocks. Touting isn’t illegal as long as the newsletters disclose who paid them, how much they’re getting paid, and the form of the payment, usually cash or stock. But fraudsters often lie about the payments they receive and their track records.
Fraudulent promoters may claim to offer independent, unbiased recommendations in newsletters when they stand to profit from convincing others to buy or sell certain stocks. They may spread false information to promote worthless stocks.
The fact that these so-called “newsletters” may be advertised on legitimate websites, including on the online financial pages of news organizations, does not mean that they are not fraudulent.
Online bulletin boards, chat rooms and social media sites are a way for investors to share information. While some messages may be true, many turn out to be bogus – or even scams. Fraudsters may use online discussions to pump up a company or pretend to reveal "inside" information about upcoming announcements, new products, or lucrative contracts.
You never know for certain who you're dealing with, or whether they're credible because many sites allow users to hide their identity behind multiple aliases. People claiming to be unbiased observers may be insiders, large shareholders, or paid promoters. One person can easily create the illusion of widespread interest in a small, thinly-traded stock by posting numerous messages under various aliases.
Other online offerings may not be fraudulent per se, but may nonetheless fail to comply with the applicable registration provisions of the federal securities laws. While the federal securities laws require the registration of solicitations or “offerings,” some offerings are exempt.
“Spam" – junk e-mail – often is used to promote bogus investment schemes or to spread false information about a company. With a bulk e-mail program, spammers can send personalized messages to millions of people at once for much less than the cost of cold calling or traditional mail. Many scams, including advance fee frauds, use spam to reach potential victims.
Many of the frauds that show up on social media are not unique to the Internet. These frauds range from “pump and dump” schemes to promises of “guaranteed returns,” from “High Yield Investment Programs” to affinity fraud.
The Internet is awash in so-called “high-yield investment programs” or “HYIPs.” These are unregistered investments typically run by unlicensed individuals – and they are often frauds. The hallmark of an HYIP scam is the promise of incredible returns at little or no risk to the investor. An HYIP website might promise annual (or even monthly, weekly, or daily) returns of 30 or 40 per cent – or more. Some of these scams may use the term “prime bank” program.
Fraudsters may use social media to promote an HYIP website or may encourage investors to use social media to share information about an HYIP website with others. For example, in In the Matter of D & L (name change), the respondents allegedly used social media to promote their HYIP website, advertising “huge,” “lucrative,” “handsome,” and “guaranteed” profits with “minimal” risk. They also allegedly encouraged their Twitter followers to “use a referral link and promotional banner on social media, blog, forum, and email to share [the HYIP website] with interested parties.” Additionally, according to the Commission’s Order, they created a Facebook page and YouTube video that promoted the HYIP website and advertised supposed daily returns of 5% to 10%.
Offering frauds come in many different forms. Generally speaking, an offering fraud involves a security of some sort that is offered to the public, where the terms of the offer are materially misrepresented. The offerings, which can be made online, may make misrepresentations about the likelihood of a return. Other online offerings may not be fraudulent per se, but may nonetheless fail to comply with the applicable registration provisions of the federal securities laws. While the federal securities laws require the registration of solicitations or “offerings,” some offerings are exempt.
How Indore Based Firms Scam Investors
Every few months it is in the news that another stock advisory company or the proprietors were caught and fined for investment frauds or something similar.
Text messages, emails or calls from firms in Indore offering stock tips are one of the most common types of spam communications that Indians receive.
These entities provide investment advisory services without obtaining necessary registration, promise an unrealistic assured return to investors and provide misleading information to Sebi while applying for registration as an investment adviser.
They dupe people by luring them to invest their money and earn more profit in less time. They make phone calls to people on behalf of unregistered advisory companies. The fraudulent companies guarantee returns and they charge a fee for the same. It is no surprise that the advice doesn’t work and the investor ends up bearing all the losses – i.e. capital loss as well as the fee they paid the companies.
The companies also have various websites that offer investment advice and solicit subscription money.
If your investment advisory firm contains such words that allude to a guarantee of returns by way of a promise or giving ‘tips’ or relying on the news to give tips, these are warning signs of speculative advice, instead of hardcore and solid research.
These companies also fraudulently advertise some other genuine SEBI registered firms' license number to try and pass off as genuine advisors.
SEBI’s Investment Advisor guidelines 2013 specifies that investment advisors are supposed to do risk profiling of their customers and are meant to offer products that are best suited to them. So, if a service advisory is not doing risk profiling of a client means that they are trying to hoodwink the system.
Sometimes these companies advise high-risk products to people who were not suited for them. For instance- one company in Indore offered high risk-products to 97 clients who were aged between 18 and 20 and some very senior citizens above the age of 80.
These firms also offer products meant for High Net Worth Individuals (HNIs) to people who are clearly not HNIs.
SEBI has a long way to go in the fight against such dubious and fraudulent companies in Indore and it needs to have a better watch especially in Indore.
You will be surprised that though we are also SEBI regd investment advisory services, but we do keep getting phone calls from these Indore, Rajkot, Surat (Gujarat), and Bhopal based advisory companies and they keep making your life hard by calling you time and again.
We are just providing you the guidelines how to be free from the clutches of these Indore based advisory services and here you can check our Day trading tips or Bank Nifty option tips to make money in the stock market. Remember the website whereever you should go should have lots of free content so that you can read it without payting like we have tens of thousands of free articles on our website and without paying also you can get benefitted with us.
People are searching on net with following keywords and one need to be careful of getting trapped as they pass on the phone numbers in a circular fashion from one advisory company to another advisory company and thus the system of non stoppage of phone ringing starts. Would we like ourselves being called the best stock advisory in Indore and we will tell these Indore companies a strict 'NO' unless these Indore based companies follow the ethical practices and look after the interests of the clients and act in the fiduciary capacity.
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