SC receives over 2,000 complaints on investment scams


THE Securities Commission Malaysia (SC) received over 2,000 queries and complaints about illegal investment schemes or scams as of September 2021.

SC chairman Datuk Syed Zaid Albar (picture) said the figure had jumped significantly and more than doubled the total number reported last year.

“These scams typically promise high returns within a short period of time, with little or no risk. They are frequently promoted through social media channels, with payments required into mule bank accounts operated by scammers.

“Please be especially cautious of such investments. When investing, never deposit your money into someone’s personal bank account,” he said in his opening remarks at the Virtual InvestSmart Fest 2021.

In response, the regulator had taken action to combat the scams by making 202 new entries in the SC’s Investor Alert as at Sep 30,2021 compared to 134 entries for the entire year of 2020.

He said this year alone, the SC had managed to block 97 websites and seven Facebook accounts with the help of the Malaysian Communications and Multimedia Commission and Facebook Malaysia.

Besides investment scams, he said the SC had also seen an increase in the number of activities carried out without the necessary license or registration with the SC.

This year, the SC took enforcement action against two foreign digital asset exchanges (DAX) by reprimanding and blocking their websites for operating illegally in the country.

As of Sep 30, 2021 the SC had included 38 operators on its Investors Alert List which comprises entities and related individuals for operating the business of investment advice without a license.

It also directed 29 of these operators to cease and desist from providing unlicensed investment advice.

“These activities were typically carried out by self-proclaimed “investment gurus” who offered their services through subscription-based private chat groups on Telegram, WhatsApp and Facebook.

“Investors should be aware that those who trade on unregistered DAXes are not protected under Malaysian securities laws and are exposed to fraud and money laundering risks.

“If you encounter them, do not engage with these unlicensed individuals. They may be receiving advice from unqualified persons or are being used as part of a market manipulation scheme,” he said.

On Thursday the SC issued a cease and desist order to RimauSwap for operating without authorisation. The action was taken after the SC received information from the public.

The SC also reprimanded Remitano in April for illegally operating a DAX in the country. Both entities had been included into the regulator’s Investor Alert list.

Syed Zaid added the pandemic had also shown that the nation is not prepared for such a crisis as it put a huge dent on their retirement savings.

He noted that by 2030 Malaysia is expected to become an ageing society with people aged 60 and above making up 15% of the population, which poses a challenge for the country’s retirement savings landscape.

“Covid-19 has disrupted businesses and livelihoods, forcing many people to use their Employees Provident Fund (EPF) savings to supplement their income during the crisis, resulting in lower retirement savings.

“Concerns have been raised about retirement security, particularly given that about 46% of EPF members under the age of 55 have less than RM10,000 in their EPF accounts.

“The pandemic has also resulted in a significant drop in the percentage of members meeting the basic savings threshold of RM240,000 at age 55 from 36% to 27%.

“There is a Malay proverb, ‘Sediakan payung sebelum hujan’ – this best summarises the importance of financial planning, especially in the light of the lessons learnt from the pandemic,” he added.