Beware of these guaranteed returns schemes, NSE warns investors

• NSE cautioned investors from investing in some guaranteed returns schemes offered by two individuals -- Shubhrakanti Nag and Suprakash Debnath.
• They are operating proprietary bank accounts in the name of Profit Axis PMS Services, Stox Gurukul, Tradenext securities to collect funds from the public through assured/guaranteed return schemes.
• After the Karvy scam in 2019, stock exchanges NSE and BSE have been proactive in identifying such scam entities.
• This April, SEBI penalised BSE and NSE for ‘laxity’ in detecting the scam at Karvy Stock Broking.

NSE cautioned investors against investing in guaranteed returns schemes offered by two individuals -- Shubhrakanti Nag and Suprakash Debnath, in a statement on Wednesday.

After the Karvy scam in 2019, stock exchanges NSE and BSE have been proactive in identifying scam entities.

In the statement, NSE informed investors that these individuals are operating various proprietary bank accounts in the name of Profit Axis PMS Services, Stox Gurukul, Tradenext securities etc for collecting funds from the public through assured/guaranteed return schemes.

“Investors are cautioned and advised not to subscribe to any scheme/ product offered by these or any entities/ individuals offering indicative/assured/guaranteed returns in the stock market as the same is prohibited by law. Participation in such prohibited schemes is at investors’ own risk, cost and consequences as such schemes are neither approved nor endorsed by the exchange,” said the stock exchange.

Moreover, these entities are not registered either as a member or as an authorised person of any registered member of the exchange. However, they are found to be associated with a registered trading member Tradenext Securities and its directors are Shubhrakanti Nag and Suchana Das Nag.

For any kind of disputes relating to such prohibited schemes, mechanisms such as benefits of investor protection under exchange's jurisdiction, exchange dispute resolution mechanism and investor grievance redressal mechanism administered by exchange, would not be available to investors.

This April, SEBI penalised both the exchanges with penalties worth ₹3 crore and ₹2 crore respectively, for laxity in detecting Karvy Stock Broking scam.

In 2019, SEBI found out that the Hyderabad-based broking firm had misutilised client securities by availing large amounts of loans by pledging client securities worth around ₹2,300 crore that belonged to over 95,000 clients.

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