Promise of risk-free, high returns? PSX says it probably a fraud

With online financial scams escalating sharply across the country, the Pakistan Stock Exchange (PSX) has issued a fresh investor alert, warning the public about a growing wave of fraudulent investment groups operating across social media platforms.

The alert, issued by the Regulatory Affairs Division of the PSX, said scammers are disguising themselves as senior corporate executives or representatives of legitimate companies to lure unsuspecting individuals into unauthorized investment schemes.

These fraudsters exploit platforms such as WhatsApp, Facebook and Telegram to promote paid investment groups, training courses and so-called ‘exclusive access’ to insider tips. They also ask the members of these groups to transfer money to private or third-party accounts, often accompanied by promises of exceptionally high returns, guaranteed profits or low-risk opportunities — hallmarks of financial fraud.

These groups often present themselves with professional branding, complete with official-looking names, logos and images, creating a misleading aura of credibility.

PSX advised the investors to look out for several red flags to identify fraudsters:

• Requests to share personal or financial information through private emails or mobile numbers
• Pressure to invest immediately, often framed as limited-time opportunities
• Claims of fixed, risk-free returns
• Messages riddled with spelling errors or suspicious URLs resembling legitimate domains
• PSX urged the public to exercise extreme caution when receiving unsolicited investment advice online.

The advisory added that attempts to persuade investors to put their money into avenues that don’t match their risk profile is also a “critical indicator” of potential fraud.

Investors have been advised to verify the credentials of any individual or entity claiming to offer financial guidance. This can be done by cross-checking information with official resources such as the PSX and SECP websites.

The investors should conduct independent research, review the company's financials and practice due diligence before acting on any investment opportunity.