SECP issues fraud alert

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday warned the general public against investing in any fraudulent investment schemes that promise hefty profits and unrealistic incentives.

“The commission has been constantly clarifying that mere registration of a company, does not authorise it to solicit deposits from the general public or offer investment schemes,” it said in a statement.

“It has been observed recently that a company namely “Econex Sales and Marketing (Private) Limited” is offering various packages to attract the public to its unlawful business activities of multi-level marketing (MLM) and referral marketing.”

The said company was using its registration status with SECP to win public confidence, deceptively implying that such activities were being undertaken through SECP’s regulated platform, the apex corporate regulator said.

As clearly provided in the explanation of section 301 of the Companies Act, 2017, raising un-authorised deposits from the general public, indulging in referral marketing, MLM, Pyramid and Ponzi Schemes are unlawful activities in terms of explanation of section 301 of the Companies Act, 2017. “The SECP, in accordance with the provisions of Companies Act, has initiated necessary legal action against M/s Econex Sales and Marketing (Private) Limited,” it said in the statement.

In view of the foregoing, the general public was hereby expressly advised in their own interest to be careful, not to invest their hard-earned money or indulge in illegal schemes launched by this company, actively being propagated through social media accounts and pages, the SECP said.