THE Internet is an excellent source of information and an efficient tool of commerce. One of its most important features is that it allows individuals to perform financial transactions from paying bills to making investments.
Since money can be transacted through the Internet, unlicensed people and crooks have established websites offering numerous services, from investment advice to investment products, to lure unsuspecting investors.
The challenge for investors is to distinguish between real websites offering genuine investment products from those that are fraudulent. It is not an easy task.
However, to help investors, the Securities Commission (SC) has highlighted some of the features of questionable websites to look out for.
Below are some of the common features of websites providing investment advice/services illegally that have been shut down by the SC:
The above is not an exhaustive list. There are many new ways being invented every day by unscrupulous persons to lure unsuspecting victim. The most important thing is investors must obtain all the relevant information regarding the investment before parting with their money.
Background check is a must!
#1: Check for licence: If you know the identity of the person giving the online investment advice, verify/check with the SC to see if the individual or company has been given a licence to give investment advice.
Giving investment advice, even on the Internet, to the public requires a licence from the SC. Without a licence, the person is in breach of the Securities Industry Act 1983. If you are unable to get the person’s identity, be very cautious because he could be a fraudster/conman out to get you.
#2: Get the facts: Never make an investment decision based solely on unsolicited/uncalled for investment advice posted on the Internet. Always verify with credible information providers, such as the Bursa Malaysia website (www.bursamalaysia.com) or annual reports, prospectuses and the newspapers.
#3: Do independent evaluation: Check information that you have obtained from chat rooms, online bulletin boards and websites by conducting your own evaluation on the investment opportunity. Refer to a licensed investment adviser or your remisier if you are unsure of how to do it yourself.
#4: Just ignore them: Lastly, if you receive an unwanted investment advice or tips from the Internet that you can’t check on and you don’t know who is providing it, the best decision you can make is to ignore it totally.
Members of the public who come across any suspicious websites as well as e-mails or any information on the Internet relating to investment advice and services may alert the SC at (03)6204-8999 or e-mail at firstname.lastname@example.org.
In addition, investors could log on to the SC’s website, www.sc.com.my(Investor Alert section) for the list of known companies and websites which are not authorised or approved under the securities laws to deal in securities. For information on how to spot bogus investment scheme, a series of educational articles are available on the Malaysian Investor website (www.min.com.my).
·The Securities Industry Development Centre (SIDC), which was established in July 1994, is the training and education arm of the Securities Commission. Its mission is to build human capital, guide investors in the capital market and develop investor education programmes to meet the objectives of the Malaysian Capital Market Masterplan and address national development needs. It is recognised as a premier training centre for capital market participants and regional regulators.
Log on to SIDC-Malaysian Investor website: www.min.com.myfor information on how to be a wise investor.