Believing The Unbelievable
Roughly a year back, I got a call from an unknown number. The guy on the other side had some investment idea that I could offer to my clients. He mentioned an investment that pays a 3% guaranteed return on monthly basis to client’s bank account with 100% guarantee of capital. So secure that they will enter into a contract (registered on a stamp paper) with the client mentioning the returns and guarantee part.
I wanted to bang my head against the wall while listening to him, however, I controlled myself & asked him to share details on the investment and a copy of the contract that they entered with the clients.
I received a copy of the contract, however, at no place did it mention how & where the money was going to be invested. So, I decided to give this guy a call to understand about the genius money making machine that he was talking about.
After a lot of beating around the bush, he confessed that they did futures & options trading with client's money with a brilliant strategy that they have been running for over 3 years with 100% success ratio. Fair enough.
I asked him if they were registered with SEBI for offering this service, to which he replied with the number of investors & assets that they were managing.
750 investors with assets worth Rs. 280 crores.
Until this point, I asked him about 7 times for the SEBI registration, he kept on dodging the question. At one point he replied affirmatively but the moment I asked him to share the certificate or registration number, he responded that he will be sharing it soon. Been over a year now, no message from him yet.
A lawyer friend of mine confirmed that the contract they signed with clients is a useless piece of paper, not enforceable at all. But I guess those 750 investors were happy holding that paper assuming it meant something after investing such heavy sums of money.
A few days back, there was a news article in the local paper about the people behind this scheme running away to Dubai after duping investors for a sum of Rs. 735 crores. I guess the strategy didn't had 100% success ratio.
A fraud who promises to offer exorbitant returns will get the money more easily than someone who manages real money with all the legal aspects in place with reasonable returns.
Moral of the story:
Protect yourself by staying away from people/products that offer exorbitant returns on your money. Only guaranteed thing in above product will be: Disappointment.
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