SECP Warns Public Against Investing in Fraudulent Investment Schemes

The Securities and Exchange Commission of Pakistan (SECP) has once again warned the general public against investing in Ponzi and pyramid schemes, multi-level marketing (MLM), and various online schemes that promise high rates of return. The SECP has revealed that it has noticed a company namely, “International Business Solutions (Private) Limited” prima facie raising illegal deposits from the public by offering profits thereon. The Commission has made it clear that the said company does not hold any license to collect deposits from the public. According to the SECP, it has also found an online mobile application namely, “Barwaqt”, involved in offering financing facilities to the general public. To support its illegal activity, the mobile app is purported to be licensed by SECP. The SECP has revealed that the app is neither registered nor licensed. The SECP has initiated legal actions against these entities. However, it has advised the public at large to refrain from dealing with or investing in these entities. It is pertinent to mention here that the SECP has made public, on its official website, a list of companies involved in unauthorized business activities such as illegally collecting deposits from investors by making false promises of exceptionally hefty returns. The list can be viewed here. The SECP has time and again clarified that mere registration of a company does not authorize it to raise deposits from the public. It is reiterated that raising unauthorized deposits from the general public, indulging in referral marketing, MLM, pyramid, and Ponzi schemes are unlawful activities in terms of Section 301 of the Companies Act, 2017. Complaints or evidence against companies involved in unauthorized activities and illegal deposit-taking can be emailed at: [email protected].