KUALA LUMPUR (Oct 14): Securities Commission Malaysia (SC) chairman Datuk Seri Dr Awang Adek Hussin has urged the public to be wary of self-proclaimed investment gurus who offer questionable advice, or use social media to spread false or misleading information.

He said there had been increasing use of “celebrities or influencers” to promote retail investment offerings on social media. 

This includes using celebrities to endorse or provide investment advice to investors, besides to talk about or promote successful investments.

To address this growing problem, Awang Adek noted that the SC had increased collaborative efforts with various stakeholders to do more in fighting scams.

“Our multi-pronged approach includes alerting the public via our Investor Alert List, blocking websites, and geo-blocking offending social media pages. We also take enforcement actions as needed.

“Last year, we added 275 names to our Investor Alert List, blocked 143 websites, and geo-restricted 35 social media pages. 

"This year, we have added 194 names to our Alert List, and 143 websites and 26 Facebook pages were blocked as of August,” he said in his officiating remarks at the 9th InvestSmart Fest 2022 on Friday (Oct 14).

Awang Adek elaborated further that the rise and popularity of the internet and social media unfortunately had also provided a fertile ground for fraud and scam activities by entities that are either illegal or do not comply with local securities laws, with the significant increase in scams and retail investor losses reported highlighting continued investor vulnerability.

Malaysia has seen a significant rise in online scams over the last two years, with almost 72,000 scams and RM5.2 billion in losses. Investment scams accounted for close to 12,000 of the overall number of scams. 

As of September, the SC had already received more than 1,800 complaints and enquiries related to investment scams and unlicensed activities alone.

“Scammers are finding increasingly sophisticated ways to target investors, who range from the vulnerable at one end to those who invest primarily by the desire — or hope — to gain lots of money irrespective of the risks involved. Some would call this the 'gambling instinct'.

“Most scams are spread through messaging apps and platforms like WhatsApp and Facebook. And we have recently noticed that they started using Telegram as well. Many of these scams also claimed to be 'shariah-compliant',” said Awang Adek.

As such, the SC chairman reminded that under Malaysian law, any company or individual that wants to provide capital market products and services to Malaysian investors, such as unit trusts, stocks, digital investments and bonds, must be licensed or registered with the SC. This also applies to those who are or claim to be licensed overseas.

He said this is important because entities licensed or registered with the SC must fulfil stringent regulatory requirements that are designed to protect investors. 

“Investors who choose to trade on unlicensed platforms risk not being protected in the event of any dispute arising. In short, we cannot protect you if you choose to invest with unlicensed people,” added Awang Adek.

Meanwhile, in terms of new investment options, Awang Adek disclosed that the SC will soon be introducing a host of new policy initiatives to further develop the country’s capital market, with some of these initiatives being digital-centric. 

“We plan to make a formal announcement of these initiatives by the end of this month,” he said.