Securities and Exchange Board of India (Sebi) chairman Tuhin Kanta Pandey warned about a surge in apps that siphon off investor money, as the regulator partnered with Google Play to roll out a verified app label initiative.
“Today, for many investors, the market begins on a screen. It begins with an app, but where access becomes digital, so does the risk. Fake apps are now a serious threat and can cause irreparable financial harm,” Pandey said at the launch of a ‘verified’ app label with Google Play on Wednesday.
The fraud, he said, is simple. Investors are lured with promises of assured returns and nudged to download apps that closely resemble those of legitimate, often semi-registered intermediaries. “By the time suspicion rises, investors have already lost their money,” he said, adding that the damage extends beyond finances to eroding trust in markets.
Pandey pointed to cases where even professionals, such as lawyers and professors, have lost life savings, sometimes triggering family disputes and prolonged legal battles.
In response, Sebi is for misleading investment-related content. More than 130,000 instances of misleading content have been escalated to social media platforms for removal so far, while about 66 cases of fake trading apps have been escalated to app stores, which have also been taken down.
Collaboration between regulatory agencies is also important to contain harm in such instances, said Pandey.
“We have to do a massive, preventive, systemic, coordinated, and systematic approach to this (so) that we are able to prevent the whole ecosystem of fraud. The coordination amongst agencies, between the big tech, and the regulators, and the Reserve Bank of India would be necessary, and we must develop those tools according to our laws and regulations, which will prevent this thing (fraud),” said the Sebi chief.