How illegal platforms operate in online trading?

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has warned citizens against investing in the fake and illegal online trading platform “Aviva Securities Exchange Academy.”

In a statement, the SECP noted that the fraudulent trading platform, operated by Aviva Investment Group,’ is being promoted across various WhatsApp groups and social media channels. The group falsely claims substantial profits from trading on the Pakistan Stock Exchange and other international stock markets.

The SECP further stated that the management company behind this illegal platform is also falsely claiming affiliation with the UK-based asset management company, ‘Aviva Investors.’ The British company has issued an alert on its website regarding the misuse of its name by these fraudulent platforms in connection with trading on the Pakistan Stock Exchange.

Citizens have been informed by the SECP that Aviva Investment Group/ H1-Aviva Sec­urities Exchange Aca­demy/Aviva Investment Limited” is neither registered nor licenced to operate any platform for trading shares on the Pakistan Stock Exchange or any International Stock Exchange.

The statement clarified that only companies authorised by the SECP, holding a securities and futures broker license, are permitted to trade in the stock market or mercantile exchange. Unlicensed brokers are not allowed to conduct trading for investors on the stock exchange. A list of SECP-licensed brokers is available on the SECP website.

Also read: Forex trading fraud: youth in Karachi falling into debt trap

The SECP has cautioned citizens against depositing funds with ‘Aviva Investment Group/ H1-Aviva Sec­urities Exchange Aca­demy/Aviva Investment Limited” or any such trading platform in any form or arrangement. The SECP has added these entities to the ‘List of Companies Engaged in Unauthorised Activities,’ available on its website.

Additionally, the SECP has referred the matter to the relevant authorities and law enforcement agencies for investigation and necessary action.

IT expert Asad Baig, who specialises in issues related to online trading, told Urdu News that with the advent of information technology, there is now a vast and registered network of online trading globally, where millions of people engage in business. “But at the same time,” he added, “some fake trading companies are also operating, causing financial losses to citizens through fraud.”

Regarding the methods used by such fake trading companies, Asad Baig explained, “These platforms initially provide users with profits, but once the number of users increases, they start deceiving them.”

He further noted that these companies attract users by presenting themselves as legally registered entities and even create fake NOCs to provide a veneer of legality to their fraudulent activities.

On how to avoid such fake platforms, Asad Baig emphasised that while the government has a role to play, citizens should conduct thorough research before engaging with any online platform.

Cybersecurity expert Mudasir Naz believes that online fraud cases have seen a significant increase in Pakistan. He stressed the need for strict government policies and public awareness on the matter. “While citizens should perform due diligence before engaging with any online trading or other platforms,” he told Urdu News, “the government’s role in preventing fraud on these platforms is crucial.”

According to Mudasir Naz, these fake online trading companies are evolving in a sophisticated manner, making it difficult for the average person to determine whether a company is legitimate. He emphasised that government oversight of these platforms could be instrumental in protecting the public.