Malaysia regulator warns of clone scams

Rick Steves

The financial watchdog reiterated that investors have to play their role by exercising vigilance and scepticism when evaluating investment opportunities and should never deposit money into personal bank accounts of any individuals when requested to do so.

The Securities Commission Malaysia (SC) is looking to arm investors with greater awareness of the modus operandi of clone scams in order to spot and avoid them.

The financial watchdog disclosed the findings of its investigation into 10 clone firm scams, which are companies that fraudulently impersonate a legitimate or a licensed entity, including misusing the name and logo of a public listed company (PLC), corporate credentials and website, to dupe investors and solicit funds.

32 mule account holders identified in 10 clone scams

Clone scams modus operandi includes:

  • Putting out advertisements on social media such as Facebook to lure investors with investment packages guaranteeing high returns and seemingly managed by “licensed intermediaries”.
  • Using large number of “agents” to lure potential victims, and soliciting investments through Whatsapp chats once the victims clicked on the link provided.
  • Requesting victims to deposit monies for the “investment schemes” into bank accounts held by mule account holders to layer and launder the illegal proceeds received.

The Malaysia regulator revealed that at least 32 mule account holders have been identified to be involved in facilitating the operators of the 10 clone scams investigated.

The investigated scams operators have generated a large amount of illegal proceeds due to a large number of victims, who are usually willing to part with small amount of monies but with the expectation of making huge returns in a short period of time.

Most of the victims who were scammed lost only small amounts of money, which makes them reluctant to come forward and cooperate with the regulator in its investigation into the scams: out of the 24 victims identified, 15 of them declined to cooperate with the Securities Commission Malaysia.

The financial watchdog reiterated that investors have to play their role by exercising vigilance and scepticism when evaluating investment opportunities and should never deposit money into personal bank accounts of any individuals when requested to do so.

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