SC: Beware of investment advice/services offered by unlicensed persons on Internet

The Securities Commission (SC) would like to warn the public to be extremely careful when seeking investment advice and services on the Internet as such advice and services may be provided by unlicensed persons illegally.

The investing public must be vigilant when engaging investment services via the Internet and deal only with parties licensed by the SC so that they are accorded the protection provided by the securities laws. The SC encourages the public to visit the Investor Alert section of its website ( for other warnings and alerts.

The SC, as part of its surveillance work, has recently identified several websites through which unlicensed persons were offering investment advice and services, targeting Malaysian investors. The SC’s enquiries into the firms operating these websites have led to the closure of some of the sites, listed in Table 1 below.

Table 1

Websites offering investment advice/services illegally that have been shut down

Some of the common features of websites offering investment advice and services illegally that have been shut down by the SC are listed in Table 2.

Table 2

Common features of websites providing investment advice/services illegally that have been shut down by the SC

  • These websites may offer ‘exotic’ investment schemes (claimed to give high return with low risk) and use ‘posh office addresses’.
  • Proprietors, who claim themselves to be ‘investment experts’, would highlight the ‘excellent track record’ of the company and also include testimonials from ‘clients’ to convince investors. Identity of the proprietor is usually not available for verification.
  • There is no reference to any licence for their activities of providing investment services and products. Some may claim that their activities do not require a licence.
  • Recommendations to buy/sell certain stocks and ‘advice/tips’ are delivered to clients via e-mail, Short Messaging Service (SMS), access to password-protected webpage or one-to-one or group meetings.
  • The proprietors may also advertise their services through indiscriminate use of e-mail messages and messages posted on various bulletin boards and Internet discussion sites.
  • Websites are professionally designed to resemble a legitimate business and may be equipped with real time stock prices, market commentary, market news and links to other financial websites.
  • Some of these websites may include free services such as basic tutorial about the capital market, e-books and access to chatroom/bulletin board.

Members of the public who come across any suspicious websites, as well as e-mails or any information on the Internet relating to investment advice and services, may alert the SC at email: [email protected] .

The public can ascertain the licensing status of an individual or company in the SC website. If in doubt, investors can contact the Licensing Department of the SC at tel: 03-62048000. Investors are also advised to visit the Malaysian Investor website at for tips on smart investing.

28 February 2005