KUALA LUMPUR (May 29): The Securities Commission Malaysia (SC) today warned the investing public about the rise of clone firm scams, where a fraudulent company will set itself up to look like a capital market intermediary that is licensed or registered with the commission, in order to deceive investors. 

“The fraudsters will use names, logos, credentials, websites and other details of a legitimate capital market intermediary to promote bogus investment schemes via social media channels such as Facebook, WhatsApp and Twitter, promising extraordinarily high returns with little risks,” according to the SC statement released today. 

It added that the victims are often instructed to deposit money into personal bank accounts of individuals who claim to represent a legitimate licensed entity, and/or a corporate account.

The SC said some capital market licensed entities have already lodged reports on the cloning of their corporate identities by unidentified persons or organisations.

“Any person who engages in securities fraud, holds himself out as a capital market intermediary or carries out any regulated activities without a valid licence or registration from the SC, commits an offence under the Capital Markets and Services Act 2007 and if convicted, may be punished with imprisonment of up to ten years and fined,” the regulator stressed. 

The commission reminded investors to always exercise caution when evaluating investment opportunities, especially those promising very high returns with little or no risks.

Investors are also encouraged to verify the status of individuals or companies offering investing opportunities via: 

“Members of the public who suspect that they have been approached by unauthorised firms or individuals offering investment opportunities may lodge a report with its consumers and investors department at 603 6204 8999 or email [email protected],” it said.