Stock Trading and IPO Cyber ​​Crimes

Stock trading and IPO cyber crimes are on the rise, just last week I got a call from a medical student and a girl from Kerala who were victims of this crime. I have previously covered various investment related cyber crimes in my column which you can read for more details. In the last “Mann Ki Bhaat” program, our Prime Minister Narendra Modi talked about investment related cyber crimes. According to a report, in 2024 about four cyber crime related complaints are registered in our country every minute and more than half of these complaints are financial frauds related. In today’s column, I will explain how trading and IPO cyber crimes were carried out in the above case, how you can protect yourself from it, remedies available to its victims.
Lilly(name changed) is a teacher, she gets a call in September that she will be given a free training on investment, and is told if you want to learn join our telegram channel. Accordingly she joins the Telegram channel suggested by Lilly, where she is taught some things about stock trading and is motivated to trade. Seeing that people in that group have written about their profits earned recently, Lily also invests and sees some profits. She gets a call from the group admin asking if you are interested in using their trading app to get more profit and tips. To which Lilly agreed and invests 11 lakhs in the said trading app, which becomes 18 lakhs. When Lilly tries to withdraw her money, she finds out that she is a victim of cyber crime and has lost 11 lakhs.
Kiran(name changed) is studying MD in one of the prestigious medical colleges in Assam. This year many people have made huge profits in the stock market and in IPOs, especially if they get shares in IPO, people have made a lot of money by selling it in few days of its opening for trade. But it is difficult to get shares of the company in IPO, using this trap cyber criminals cheated Kiran of 8 lakhs. One day Kiran gets a WhatsApp message from a unkown person saying “We will help you get shares in IPO”. Kiran curiously calls the phone number indicated in the message, Person on the other side says that we are institutional investors and we help individual (retail) investors to get shares in IPO. Believing his word, Kiran invests some money with him, as per his words, he gets the entire share allotted in the next IPO and gets 200% profit by selling them in the opening trade. Encouraged by this, Kiran invests Rs 5 lakh in the next few IPOs, only to be told to pay Rs 3 lakh in tax when he tries to withdraw the profits. When Kiran tries to withdraw 3 lakhs, He finds out that He is a victim of cyber crime and has lost 8 lakhs.

To protect yourself from various investment scams you should :-

• Always follow the principle of ‘Zero Trust, Patience and Confirmation’ in all calls/messages/offers and digital transactions from unknown numbers.
• If the returns indicated in the offer are unbelievably higher than regular investments, it may be a scam.
• Confirm whether it is a company listed with RBI/SEBI before investing.
• Check with NSDL/CDSL whether you actually got the share after investment.
• Do not share your Aadhaar and PAN card details or credit/debit card details with strangers or on websites or apps that you are dealing with for the first time.
• Never click on a hyperlink or scan a QR code or install any App provided in a message or mail by a stranger.

If you are a victim of such fraud :-

Immediately call 1930 cyber helpline or file a complaint at cybercrime.gov.in website or nearby police station. Report and lodge a complaint with the bank/broker website about the fraud and issue a debit freeze on the amount transferred. If you think your device is infected with a malware, format it or factory reset after taking backup.

Legal remedies available to the victim :-

You can register a criminal case at your nearest cyber or regular police station, under the following legal sections or the Act as per sections prescribed by the police based on your case :

• Section 303(Theft), 319 (punishment for cheating by impersonation) and 336 and 318 (cheating and dishonestly inducing delivery of property), Section 323(extract data illegally), Section 329(criminal trespass), Section 337(Forgery), Section 338(Punishment for Forgery), and Section 340(Usage of Forged document) of Bharathiya Nyaya Sanhitha(BNS).
• Section 43 (Penalty and compensation for damage to computer, computing device etc.), section 65 (Tampering with computer), section 66 (punishment for computer related offences – a person committing data theft, transmitting virus into a system, destroying data, hacking, or denying access to the computer or network to an authorized person), section 66C(which prescribes penalties for identity theft and states that anyone who fraudulently or dishonestly uses a person’s identity information) and Section 66D (punishment for fraud by impersonation using computer resources) under of the Information Technology Act(IT) Act 2000.