Such advice, spread through social media, can be false or misleading, Securities Commission (SC) chairman Awang Adek Hussin said today.
He said the investing public should also be wary of self-proclaimed investment gurus who offer questionable advice or use social media to offer unsolicited guidance.
Awang Adek, who was delivering his official remarks at InvestSmart Fest 2022 in Kuala Lumpur, said that over the last two years there had been a significant increase in the number of online scams.
He said that in the last two years, almost 72,000 such scams have been reported, involving losses amounting to RM5.2 billion. He said close to 12,000 of them were investment scams.
“As of September, the SC has already received more than 1,800 complaints and enquiries related to investment scams and unlicensed activities (for this year),” he said.
He said scammers were turning to increasingly sophisticated methods to target investors.
Among the victims are those who hope to gain a lot of money irrespective of the risks.
“Some would call that the ‘gambling instinct’,”he added.
Awang Adek said most of the scams were spread through messaging apps such as WhatsApp and social media platforms such as Facebook.
“We have seen in more recent cases that they have also started using Telegram,” he said.
He attributed the rise in online scams to the increasing use of the Internet and social media, which has now become integral in the securities business.
He pointed out that there had been a marked shift in retail investing behaviour globally. “The (Covid-19) pandemic, rise of social media and rapid technological developments have all led to more retail participation in the capital market,” he said.
“New technology has also reshaped investors’ behaviour, with more people preferring to manage their own investments and embracing the digitisation of products and services,” he added.
In response, the SC has been pushing for greater adoption of digital innovations to better serve the investing public while safeguarding their trust and confidence at the same time, Awang Adek added.