Sebi, other agencies to join forces against investment frauds

New Delhi: Amid a countrywide proliferation of fraud investment schemes, markets watchdog Sebi is joining forces with other agencies, including RBI, SFIO, Enforcement Directorate and state police departments, to tackle the menace.

A large number of fraudulent schemes have come to the fore in recent months, wherein gullible investors are promised huge returns of up to 100 per cent in a year or two through 'bizarre and innovative' methods, a senior official said.

The investors being taken for a ride include the poor daily-wage earners trying to save a few hundred rupees a month, the middle-class seeking to invest their hard-earned income for decent returns, as also the rich and sophisticated HNIs looking to grow their wealth by investing in property, artworks and the financial markets.

Investigations of Securities and Exchange Board of India (Sebi) have also found that many of these schemes are being used for the purpose of money laundering and to channelise illicit funds into the financial system, the official said.

Put together, all such schemes are estimated to have raised thousands of crores of rupees from investors across the country.

Sebi on its own lacks full-fledged powers to act against all kinds of 'money-pooling' frauds, although a proposal to strengthen its arsenal is awaiting government's clearance.

In the meantime, the regulator has decided to take a collaborative approach to bring to book perpetrators of these investment frauds, by seeking help from other regulatory and enforcement agencies.

Sebi is roping in other regulators and agencies depending on the needs and nature of the case, the official said, while adding that these entities include banking regulator RBI, Serious Fraud Investigation Office (SFIO), insurance watchdog IRDA, Enforcement Directorate and the Economic Offence Wings and other police departments in various states. .