The Securities and Exchange Commission of Pakistan (SECP) issues public warnings from time to time in order to raise awareness among the general public regarding typologies of potentially fraudulent activities perpetrated by companies or entities/individuals posing as legitimate incorporated persons that come to its attention. The objective is to educate public, enabling them to recognize and avoid falling prey to deceptive practices. SECP released a public awareness message warning the public of fraudulent activities on May 31, 2023. The message stated: On the basis of information available on social media and complaints/ queries received recently it is observed that following typical business models are being used to lure the public:
- Mobile/ web-based apps promising lucrative profits/referral bonuses on deposits/ investments;
- Seeking deposits in the name of making investments on your behalf in different products and promise lucrative return like investments in Surface Mount LED (SMD) screens, trading of different products/ forex/ cryptos;
- Taking advances in the name of fees/down payment for provision of loans or assets on lease/easy installments at low markup;
- Receiving funds for online jobs packages
The general public is, once again, cautioned that the Certificate of Incorporation (COI) of a company is only evidence of its registration as a corporate entity. Deposit taking/ leasing/ financing is only permissible to companies which have obtained a license (different from incorporation certificate) to that effect.
Any person dealing with a company is recommended to self-check status of that company on SECP’s website or by raising a query with SECP on https://sdms.secp.gov.pk/. A list of companies suspected to be involved in unauthorized businesses is placed on SECP website and is updated from time to time.
It is noticed that ill-willed actors devise new models to interact with and deceive public. Public is therefore advised to remain vigilant and report any suspected activity by a registered company at scams@secp.gov.pK.
Source: IBP