Securities Commission Malaysia Warns on Rising Clone Firm Scams

The Securities Commission Malaysia (SC) cautioned on Thursday the public on the sharp increase of clone firm scams this year. Many of those unregulated companies fraudulently impersonate a legitimate entity, including misusing the name and logo of a public listed company (PLC) to dupe investors and to solicit funds.

Clone firms offer non-existent investment opportunities including in the shares of these PLCs, promising unrealistically high returns within a short span of time. In May, the SC had also issued an alert against fraudulent clone firms posing as licensed capital market intermediaries.

Other than the names and logos of these PLCs, the fraudsters also use corporate credentials, websites and other details of legitimate entities when promoting these schemes via social media channels such as Facebook, WhatsApp and Twitter.

The victims are often instructed to provide personal information such as their names, NRIC numbers and bank details, after which they will be directed to transfer funds to the personal bank accounts of the scammers. Following this, the fraudsters will induce the victims to part with more money on the pretext of income tax payments, administrative fees, bank charges, withdrawal fees or exchange rates.