SEBI Cautions Against Fraudsters Offering To Manage Trading Accounts For Profit Share

The Securities and Exchange Board of India (SEBI) has issued a press release warning investors against stock market scams carried out through “account handling” services.

SEBI stated that certain individuals, portraying themselves as experts, are offering account handling services to help investors invest in the securities market. These persons claim to generate risk free profits in investors' trading accounts. They typically specify a minimum capital requirement and charge a percentage share of the investor's profits.

According to SEBI, such fraudsters require investors to share their trading account credentials and operate the accounts by executing trades on their behalf. The profits or losses are directly credited or debited to the investor's account, while the fraudster expects a share in profits, if any. Any losses incurred are not shared by the fraudster.

The regulator clarified that such entities are not registered with SEBI and do not fall under its regulatory purview. Investors have been advised not to trust such claims and to refrain from sharing their account credentials with anyone.

SEBI further urged investors to verify the registration status of intermediaries on its official website before investing and to deal with only SEBI-registered intermediaries.