100% Gains in 15 Days? Beware of Stock Traps Emerging on Social Media and WhatsApp
In recent weeks, a surge of fraudulent investment schemes promising extraordinary returns in the stock market has surfaced across social media platforms and WhatsApp groups in Bangladesh. These so-called “stock traps” are enticing small investors with claims of 50% to 100% profits within just 15 days, sparking concern among regulatory bodies and seasoned market participants.
Fraudulent Apps and Fake Platforms Exploit DSE Reputation
Several mobile applications circulating on Android and iPhone devices present themselves as legitimate tools affiliated with the Dhaka Stock Exchange (DSE). Among them, apps named “DSEXPro” and “DSEXPRO” claim to offer discounted shares from listed companies, luring investors with the illusion of rapid gains. These platforms misuse the DSE’s name, logo, and branding to appear credible.
One notable WhatsApp group, monitored by The Business Standard, advertised shares of GQ Ball Pen Industries at a significant discount compared to market price – Tk245 instead of Tk361 – guaranteeing nearly a 47% return if sold within a short window. Similar pitches for Khan Brothers PP Woven Bag Industries promised over 20% floating profits.
However, according to DSE officials, such offers are misleading. Shares of listed companies cannot be bought at arbitrary discounts outside official rights issues, which are conducted solely to raise fresh capital from existing shareholders. Even block market transactions typically fluctuate by no more than 10% from the main market price.
DSE Files Police Complaint and Urges Vigilance
The Dhaka Stock Exchange filed a complaint on August 3 with Khilkhet police against operators of these fraudulent schemes. The complaint highlighted how scammers exploit the DSE name to promote unauthorized apps and groups that trap small investors eager for quick profits. Investors are tricked into paying a Tk1,000 membership fee and opening so-called “high-net-worth” accounts, unwittingly falling prey to scams.
Shafiqul Rahman, Deputy General Manager of the DSE’s public relations department, confirmed that over 10 such fraudulent groups have been identified. “They use the names of listed companies and fake insider information to lure investors with promises of extraordinary profits,” he said. The fake apps do not facilitate actual share trading but are purely designed to defraud users.
BSEC and DSE Warn Against False Promises
The Bangladesh Securities and Exchange Commission (BSEC) echoed these warnings. Abul Kalam, BSEC’s spokesperson, noted that fraudulent schemes tend to become more active during bullish or stagnant market phases. “We monitor social media closely to identify these networks,” he stated.
Both DSE and BSEC reiterated that no approvals have been granted for these so-called investment plans. The only legitimate method for subscribing to IPOs or rights offerings is through the official Electronic Subscription System (ESS). They urge investors to only trade through certified brokerage houses and the official DSE Mobile App to avoid risks.
Investor Experiences Highlight the Dangers
Several investors who engaged with these WhatsApp groups reported losses and disillusionment. Many paid the Tk1,000 monthly fees hoping to gain from daily stock tips and discounted block shares but saw no real profits. Prices might rise briefly after recommendations but quickly fall again, suggesting manipulation or false signals.
One investor, Selim, shared his experience: “They publish share picks every day at 11 am, but the promised profits never materialize. It feels like a trap to lure us in.”
Deceptive Investment Fund Offers Also Appear
In addition to stock traps, WhatsApp groups have advertised dubious investment funds with tiered deposit options promising returns from nearly 2% in three days up to 28% in one month. Neither BSEC nor DSE recognize these funds, and no authorized asset managers oversee them. Such offers are considered unauthorized and potentially fraudulent.
Protecting Investors Through Awareness Campaigns
In response to these developments, the DSE has launched awareness campaigns warning investors about the risks of fraudulent investment schemes. They emphasize due diligence and encourage the public to verify any investment platforms or groups claiming official association with the DSE or BSEC.
Shafiqul Rahman concluded, “If individuals choose to invest in these unauthorised schemes and suffer losses, the responsibility lies with them. We urge caution and recommend trading only through legitimate, verified channels.”
The rise of these fraudulent stock traps underscores the need for vigilance among small investors in Bangladesh, especially amid volatile market conditions and the lure of quick returns. Investors are advised to exercise caution, seek guidance from trusted financial professionals, and avoid schemes promising unrealistically high profits in short periods.
For ongoing updates and verified information, follow The Business Standard and official communications from the Dhaka Stock Exchange and Bangladesh Securities and Exchange Commission.