Thread by @optionurol

The Outlaws of Indore - A thread 🧵

#trading #scam #Indore #Nifty #investor #fintwit

@564pankaj @avasthiniranjan @ankitapathak_ @SahilKapoor @JustNifty @JustPunforfun @pprao @drkamaljeet @Rahul79307822 @raggy_k

Indore is home to 10% Registered Investment Advisors of India (RIA).
It was at a point of time called Mini Bombay.
Since RIA came into being in 2013, 90% of 16,400 complaints are from Indore based operators.

Four such firms have been reported to SEBI over 500 times. (Source @TheKenWeb )

A SEBI Registered advisor without any address. It is seemingly located next to Police Station, and RTO.
It is surrounded by many market advisors, most of them it turns out are fake

Some have relocated from here, but this is the most famous area for this infamy.

Local Police receives 60 - 70 complaints/ month. Though on a decreasing trend.

Unofficial estimates peg the number of such companies to be around 1000 in the city (luring customers with various ways, some of them banned by SEBI)

Modus Operandi
1. Bulk SMS /Telegram / Bulk Dialling like call centre, cajole gullible investors (No Rule Book)
2. Guaranteed Returns
3. Penny Stocks advisory, commission to successful caller.
4. Develop Trust of client
5. Introduce customer to riskier asset class (FnO)

6. At times, tell one half to sell and other half to buy the same script
7. Gain trust of winners, making them place bigger bets
8. Even small subset who believes on them, is a gold mine for them.
9. Profit Sharing / Fee based / Vanishing Act

Clamping Down by SEBI - Harder to become RIA - Higher educational qualification, increase in net-worth of non individual, corporatisation (If clients > 150), Recertification

Genuine RIA & Fee for only RIA are suffering - they charge more & cater to middle market and HNI.

RIA numbers are going down in India when they should be going up

RIA 2 Years back - 1500
RIA (Present) - 1330

USA - 13,500 (2019)

Policing this is hard. Back and forth required with SEBI Companies change address before clampdown

Number of Complaints has gone down
2020 - 3334
2021 - 1499

The lure remains and gullible investors continue to get sucked.

End

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Excerpts from Article: @TheKenWeb