The Securities and Exchange Commission of Pakistan (SECP) has issued a statement addressing complaints from individuals, particularly senior citizens, who have lost their hard-earned money through investments in fraudulent real estate schemes. According to the statement, these schemes typically solicit deposits or investments from the public, promising high returns on the amounts deposited.
The perpetrators of these fraudulent schemes deceive investors by displaying the Federal Board of Revenue (FBR) national tax number and the incorporation certificates of companies registered with SECP. They collect large sums from hundreds of investors by presenting the deposits as investments in a real estate project under development, with promises of unrealistic monthly returns. The funds are usually deposited into bank accounts of unincorporated entities controlled by the perpetrators, while the companies are presented as legitimate structures to attract investments. These schemes operate as Ponzi schemes, initially paying returns to early investors but eventually collapsing, leaving later investors with no legal recourse to recover their money.
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The SECP emphasized that mere company registration with SECP does not authorize any entity to raise illegal deposits or fraudulent investments or guarantee returns on investments under the pretext of real estate schemes.
To protect themselves, the SECP advised the public to exercise caution and avoid investing in fraudulent real estate schemes based solely on promises of lucrative monthly profits. The SECP clarified that it does not regulate real estate investment schemes, except for Real Estate Investment Trusts (REITs). Any suspicious activity related to real estate investments should be reported to law enforcement agencies immediately.
