BSEC warns stock market investors against AI-powered scams using social media

The Bangladesh Securities and Exchange Commission (BSEC) has warned investors of the stock markets regarding a new type of fraud using artificial intelligence (AI) on social media platforms.

The BSEC's Market Intelligence Department (BMID) recently discovered that scammers are using AI to send enticing messages on platforms like WhatsApp and Telegram to defraud investors.

In a press release issued on Thursday, the BSEC confirmed the fraudulent activities.

"It has been observed recently that fraudulent groups are attempting to deceive investors with lucrative offers for stock market investments on social media. The commission urges all investors to be cautious of such tempting investment proposals," said the press release.

The BSEC also advised investors to only buy or sell securities and conduct financial transactions through their own BO (Beneficiary Owner's) accounts, which must be opened with a registered stockbroker or depository participant. The warning emphasised that all transactions must be accurately reflected in the investor's own BO account.

The regulatory body stressed that investors must take extra precautions to protect their own interests. The BSEC also encouraged anyone who encounters fraudulent activity on social media or any other irregularities in the stock market to report it to the commission's Market Intelligence Department.

According to the BMID, the scammers first gain the trust of investors by showing small profits. Then, they lure them into making larger investments with the promise of higher returns. After taking a substantial amount of money, the scammers inform the investor that there is an issue with the mobile app used for the investment and demand more funds. Once they have taken the extra money, the fraudulent group blocks the victim.