In your interest.
Online Personal Finance Magazine
No beating about the bush.
A number of websites have cropped up, trying to lure investors with dubious claims of more than 100% returns—why are the regulators silent?
Speak Asia is not the only company luring thousands of people with dubious claims and the promise of extraordinary returns. The legitimate options & futures trading market of the National Stock Exchange (NSE) is a happy hunting ground for shoddy online tip-sheets, luring the gullible.
The Internet is flooded with websites claiming accurate tips, as high as 99% in trading in Nifty Futures & Options, etc. These portals are luring people to subscribe to their various plans—which is nothing but virtual gambling.
Most of the trades are usually in the Nifty and individual stock options where average trading volumes on the NSE are about Rs1,00,000 crore per day. Of these, index options account for 65% of total volume.
A Google search throws up dozens of websites promising huge returns through their tip-sheets, but market regulators seem to be unaware of these portals.
The modus operandi of all these tip-sheet portals is similar. They claim 99% accuracy, provide various stock options plans on (weekly or yearly) subscription. On an average, two-three 'tips' are delivered via mobile text messages. A few punters deliver tips using online chat rooms.
There are many more websites making such claims—Here are a few:
Obviously, if generating such high market returns was so easy, investors all across India-and around the globe-will be flocking to Mumbai. The blatant dubiousness of these claims is obvious even with a cursory glance at these sites. But a few might just bite the bait. The moot point is, while a Google search can throw up so many sites, why are the regulators silent?
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The latest order confirms an earlier interim ex-parte order on 21 October 2010 against Sun-Plant Agro directing it not to collect any money from investors, or to launch any scheme, and not to dispose off any of the properties or delineate assets of the scheme
The Securities and Exchange Board of India (SEBI) passed an order on 3 May 2011 directing Sun-Plant Agro to wind up its existing collective scheme(s) and refund the money collected by it under the scheme(s) with returns to the investors within three months of the order.
The latest order confirms an earlier interim ex-parte order on 21 October 2010 against Sun-Plant Agro directing it not to collect any money from investors or to launch any scheme or not to dispose off any of the properties or delineate assets of the scheme, or not to divert any fund raised from public at large kept in bank account and/or at the custody of the company, till further directions in this regard.
The market regulator further stated that in the event of the company failing to act as per the order, SEBI will initiate prosecution under the Securities and Exchange Board of India Act, 1992, against the company, or persons in charge of the business of its scheme(s).
Sun-Plant Agro was raising funds in the name of 'sale of plants'. It allegedly sold plants to purchasers, maintained the plants and thereafter provided returns on the amounts invested at the end of the scheme in the form of wood, even though no identity or marking of the particular plant which was sold, was provided to purchasers.
SEBI said that such activities of the company carry the features of a Collective Investment Scheme (CIS), specified under Section 11AA of the SEBI Act read with Regulation 3 of the SEBI (CIS) Regulations.
The company ought to have wound up the scheme in 2003 pursuant to rejection of the application for provisional registration by SEBI and the filing of the 'Winding Up and Repayment Report' by the company. However, the activities of Sun-Plant Agro and the details of amounts received by it against cost of trees during 2003 to 2010 prima facie indicate that even after submission of the Winding Up and Repayment Report in 2003, the company has been carrying out activities of a CIS without obtaining a Certificate of Registration from SEBI, the market regulator said.
Interestingly, the company, which calls itself 'ISO:9001:2008 certified eco-friendly organisation', has partnered with the West Bengal Wasteland Development Corporation (WBWDC). Sun-Plant Agro, with WBWDC, plans to plant the jatropha crop over about 30,000 acres in the arid districts of Bankura, Birbhum, West Midnapore and Purulia over the next 15 years.
The SEBI order dated 3 May 2011 has further stated that for the specific purposes of the repayment/refund of the moneys to the investors as directed above, those directions as mentioned in the ex-parte order dated 21 October 2010 in as much as it relates to disposal of properties of the scheme, the operation of the Order is modified to allow Sun-Plant to meet the liabilities of the refunds to the investors in accordance with these directions.