How a sham stock investment scheme took dozens for a ride

Bengaluru: So-called stock analyst Aditya Agarwal and his nine assistants, who bamboozled 26 investors from 10 states and two Union Territories of Rs 2.9 crore, used social media and technology at their disposal, a DH investigation found. 

Nineteen victims said they were contacted on Facebook, while others were reached through WhatsApp. The scamsters told the victims that if they joined the WhatsApp group, Artisan Capital Financial Titans 806, they would be “exclusively part of a teaching programme” where Agarwal would give them tips on how to invest and what stocks to choose. 

The scheme was spread in three parts.

Firstly, three live classes were held every day on live.artisanstock.in. The scamsters told the victims that they were from Artisan Capital, an institutional investor based in the US. Institutional investors are those who invest on behalf of their clients — mutual funds, insurance companies are some examples. 

"The first class was held at 9:30 am after the stock market opened,” 33-year-old Sushma Sinha (name changed on request), from Mumbai who invested Rs 12 lakh, told DH. “He used to talk about the scenario in the US and the Indian markets. The next lecture was around 2:30 pm where he explained the market indicators. He also gave tips on what stocks to buy and sell.” 

Sinha, who has been independently trading for over five years, said most of his tips were correct. "He gave tips on Chennai Petroleum Corporation Ltd, CESC Ltd and many others — they all hit the target. I was wondering how he got it right. His lectures were not convincing. If we asked them about some other stock, they weren’t able to answer. us”

Sinha said others in the group regularly shared the details of their earnings based on Agarwal’s tips, convincing her to continue. The entire conversation took place on WhatsApp chats and none of the victims was able to speak with Agarwal or his assistants on the phone. 

In the second step, Agarwal's assistants began contacting individuals on WhatsApp, saying they could become initial members of a new institutional investor from the US. 

Thirteen victims said that their trading account was created on artisanstocks.com, five said that their account was on the Share Alert app, four said they were asked to use the STORAK app, and others on www.smia.top. 

Four victims, who were retirees and three of them above 70, told DH that they had invested from their retirement savings. 

When the time came for withdrawal, the victims were stumped by a fake letter dated October 26 from the US Securities and Exchange Commission that claimed that Artisan Capital would immediately cease all operations over stock manipulation and was asked to assist in the probe. 

The fake letter had no official seal and the dates were mentioned in the wrong format — the US follows a month-date-year format. 

Suspicious websites, apps

As per the ICANN registration data lookup tool, the domain www.artisanstocks.com, which couldn’t be accessed currently, was registered on October 7, 2023. Share Alert and STORAK were not available on either the App Store or Play Store, and a ‘Website status: Risky’ alert popped up on McAfee antivirus while opening www.smia.top — a domain created on August 7, 2023, as per ICANN.

Dubious SEBI certificate

During the daily classes, the victims said they were given a certificate of registration on the Securities and Exchange Board of India (SEBI) letterhead. The letter seen by DH claimed that Artisan Investment Adviser (Salt Lake City, West Bengal) was registered on March 7, 2017. When DH checked the name and the registration number (INA200002816) on SEBI’s website, no records were found.

'No link with Artisan Captial'

US-based entity Artisan Capital Group has denied affiliation with Artisan Capital in India. 

In an emailed response to DH, Sean P Fogarty, a partner at Artisan Capital Group, said: "We have absolutely no affiliation with that firm. We are a small commercial real estate company based in Des Moines, Iowa and Chicago, Illinois.”