SC receives high queries on investment scams, establishes task force — Chairman

KUALA LUMPUR: The Securities Commission Malaysia (SC) has received 370 queries and complaints on illegal investment schemes as at end-September 2020 compared with 317 for the whole of last year.

Chairman Datuk Syed Zaid Albar said of late, there has been a rise of “clone firm scams” where the fraudster would impersonate a legitimate licensed entity to dupe investors into believing that they are investing with a legitimate entity.

He said based on SC’s findings, the promotion of such scams were commonly carried out via social media channels – with the use of WhatsApp and Facebook being the most prevalent channels.

“Investors who received offers of investment opportunities through WhatsApp messaging or Facebook channels should exercise caution.

“I would like to advice investors to always verify the individual and entity’s status with the SC before investing their monies in any investment schemes,” he said in his welcome remarks at the SC virtual InvestSmart Fest 2020 (Virtual ISF 2020) here yesterday.

Syed Zaid said for the first six months of this year alone, Malaysians were reported to have lost RM914 million to scams.

He said investors’ vulnerability to scams might be caused in part by their unrealistic expectation of returns from investments.

In an SC survey earlier this year, it showed that a majority of investors in Malaysia have an unrealistic expectation of 24 per cent to 30 per cent returns per annum on their investments, he said.

Today, investors’ vulnerability is also compounded by their search for yield in this low interest rate environment, he added.

“Given the rapid increase of illegal investment scams, the SC has recently established an internal Task Force to focus on investigating and taking enforcement action against the perpetrators.