Stock Market Scam: What It Is and How to Avoid It

If you’ve ever gotten a call promising huge returns on a tiny investment, you’ve probably encountered a stock market scam. These tricks are everywhere – from bogus advisory firms to fake IPO offers – and they prey on anyone who wants to grow money fast. The good news? You can spot most of them with a few simple checks.

Common Types of Stock Market Scams in India

First, know the tricks. The most frequent scams are:

Pump‑and‑dump: Scammers hype a low‑priced stock on social media, push you to buy, then unload their own holdings, causing the price to crash.
Ponzi‑style advisory firms: They charge high fees and promise guaranteed returns, but they simply use new investors’ money to pay old ones.
Fake IPO or corporate announcements: You receive a “whatsapp” or email saying a big company is opening an IPO tomorrow – the link leads to a cloned SEBI portal that steals your details.
Unregistered brokers: They operate without SEBI registration, making it hard to trace them if they disappear.

All of these share one thing: they pressure you to act fast, often using fear of missing out.

Red Flags You Should Never Ignore

When someone pitches an opportunity, ask yourself these questions:

Is the offer guaranteed? Real market returns are never guaranteed.
Can you verify the person or firm on the SEBI website? Look for registration numbers.
Are they asking for money via unconventional methods like WhatsApp Pay or crypto wallets?
Do they pressure you to decide within minutes?
Is the story too good to be true, like “double your money in 30 days”?

If you answer yes to any of these, walk away. A legitimate advisor will respect your need for due diligence.

Another quick test is to search the company name with the word “scam” on Google. If you see warning posts on forums or news articles, it’s a red flag.

Even if the scam looks sophisticated, SEBI’s investor helpline (1800‑22‑7777) can confirm if a broker is registered. A quick call saves you from losing thousands.

When you do find a promising stock, do the standard research: read the annual report, check the promoter’s background, and see the stock’s trading volume. If these basics don’t line up, the hype is likely a trap.

Lastly, protect your personal data. Scammers often ask for PAN, Aadhar, or bank details under the guise of “verification.” Share those only on official broker portals with HTTPS and a lock icon.

Remember, the market rewards patience, not haste. By staying skeptical, double‑checking sources, and using SEBI‑approved channels, you can keep your hard‑earned money safe from stock market scams.

Rahul Gandhi Accuses Modi and Shah of Stock Market Manipulation, Demands JPC Probe After Massive Crash

10.05.2025 By: Aarav Bhatnagar

Rahul Gandhi accused PM Modi and Amit Shah of influencing the stock market during the 2024 elections, linking their statements to a sudden surge and crash that reportedly cost retail investors ₹30 lakh crore. He called for a Joint Parliamentary Committee investigation, while BJP leaders dismissed his allegations as baseless.