Cyber Fraud Network Posed as SEBI Brokers to Defraud Investors Across India

Delhi Police have dismantled a sophisticated cyber fraud operation that allegedly impersonated registered stockbrokers to swindle investors across India, with authorities estimating potential losses of nearly Rs 50 lakh. The investigation has revealed a coordinated network that used fake credentials from India's securities regulator to execute fraudulent trades through shell companies and mule accounts, according to official statements released Monday.

The arrests of three individuals—including Pravash Chandra Panda and his nephews—follow a comprehensive probe into complaints spanning 165 cases nationwide, with fraudulent transactions totaling Rs 6.33 crore. The case highlights growing vulnerabilities in India's digital trading ecosystem, where criminals exploit regulatory loopholes to conduct elaborate securities fraud schemes.

Background and Context

The fraud came to light through a detailed investigation into a complaint from Dwarka, where a victim reported being duped by individuals presenting themselves as legitimate brokers registered with the Securities and Exchange Board of India (SEBI). According to Deputy Commissioner of Police (Crime) Aditya Gautam, the perpetrators created convincing replicas of legitimate trading platforms and used sophisticated social engineering tactics to gain investors' trust before diverting funds through a complex web of accounts.

Securities fraud through impersonation has become increasingly common as India's retail investment market expands rapidly. The country's growing digital adoption, combined with inadequate verification mechanisms in trading platforms, has created opportunities for fraudsters to exploit regulatory gaps. Previous investigations by Indian authorities have uncovered similar schemes, though the scale of this particular network—operating across multiple states—demonstrates the evolving sophistication of such criminal enterprises.

Key Figures and Entities

Court documents identify Pravash Chandra Panda as the alleged mastermind of the operation, working alongside his nephews whose full identities have not been disclosed pending formal charges. The trio reportedly operated through at least 165 different complaints filed by victims across multiple Indian states, suggesting a nationwide operation rather than isolated incidents.

Financial investigations traced the movement of illicit funds through entities including M/s Shriji Apparels, which authorities allege served as a front company to receive and launder proceeds from the fraudulent trading activities. The use of legitimate-looking business entities to mask financial crimes has become a hallmark of sophisticated investment fraud schemes in India, according to forensic accounting experts who study such patterns.

Legal and Financial Mechanisms

The alleged fraud exploited the regulatory framework governing securities trading in India through multiple deceptive practices. According to police statements, the suspects created manipulated trading interfaces that appeared legitimate to unsuspecting investors, complete with fabricated SEBI registration numbers and documentation. These fake platforms were designed to mimic legitimate brokerage operations, complete with realistic market data and trading functionalities.

Financial records reviewed by investigators revealed how the syndicate moved funds through a sophisticated network of mule accounts—accounts held by third parties either knowingly or unknowingly—that helped obscure the money trail. The operation allegedly used shell entities to create layers of financial transactions that complicated tracking efforts by law enforcement. According to the investigation, funds were rapidly dispersed across multiple accounts soon after being received from victims, making recovery efforts increasingly difficult.

International Implications and Policy Response

While this particular operation appears confined to India, it reflects a global pattern of increasingly sophisticated securities fraud that exploits digital transformation in financial markets. Similar schemes have been uncovered across Southeast Asia, Europe, and North America, suggesting organized crime networks are sharing methodologies and technologies to circumvent regulatory safeguards.

The case underscores the need for enhanced verification systems within India's growing digital trading ecosystem. Policy experts have called for improved real-time authentication of broker credentials, greater coordination between SEBI and law enforcement agencies, and more robust customer protection measures. Some financial technology companies have begun implementing biometric verification and blockchain-based credential systems to address these vulnerabilities, though widespread adoption remains slow.

Sources

This report draws on official statements from the Delhi Police Crime Branch, public information from the Securities and Exchange Board of India, and media reports from Indian news agencies published in December 2025. The financial figures and operational details are based on preliminary findings disclosed by law enforcement authorities during the ongoing investigation.