Frankly Speaking: Heightened alert

This article first appeared in The Edge Malaysia Weekly, on February 8, 2021 - February 14, 2021.
Frankly Speaking: Heightened alert
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Three regulators made their move last week, warning against unlicensed activities and investment scams.  A total of 15 companies were added to Securities Commission Malaysia’s (SC) investor alert list for carrying on unregulated activities; operating digital asset exchange without registration; and possible clone offering high returns, among others.

Bank Negara Malaysia, on the other hand, red-flagged four entities that are neither authorised nor approved under the relevant laws and regulations administered by the central bank.

Meanwhile, last Friday evening, Bursa Malaysia issued a statement advising the public to be wary of investment scams and to be cautious before participating in any investment schemes and activities. This comes after a growing number of cases where the Bursa Malaysia name and corporate logo were misused for marketing purposes by unscrupulous companies and websites.

It appears that the propensity for risk taking has gone beyond the stock market in this low interest rate environment, prompting the authorities to ramp up efforts to crack down on illegal investment activities.

Understandably, during the current economic downturn, the public could be more susceptible to financial scams promoted on social media channels such as Facebook, WhatsApp and Telegram.

Soaring bitcoin prices have also lured many investors to jump on the cryptocurrency bandwagon, but they will be exposed to risks if trading is not done through a proper and legitimate platform.

It was reported that in the first half of last year, Malaysians lost a total of RM914 million to scams. While the SC has set up an internal task force to focus on investigating and taking enforcement action against individuals behind financial scams, investors should exercise sound judgement and be mindful when approached by promoters of so-called investment schemes, especially those offering returns that sound too good to be true.

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