SECP Warns Against Illegal Investment Schemes.

SECP's Stance on the Legitimacy of the Scheme

The Securities and Exchange Commission of Pakistan (SECP) has recently flagged another unauthorized investment scheme operating under the names Summit 4X Trade and Summit AH Experts. The scheme is being aggressively marketed by its sponsors, Abdul Hai and Summer Abbas, who are reportedly targeting unsuspecting residents of district Layyah.

These promoters utilize various communication channels, such as branch offices, WhatsApp messages, and direct phone calls, to lure investors with promises of unrealistically high returns.

The fraudulent operation is based on persuading people to invest their hard-earned money with the assurance of lucrative profits—up to 30% returns. To give the appearance of legitimacy, Abdul Hai has gone as far as registering a company named Summit AH Experts (SMC-Private) Limited with the SECP under the Companies Act, 2017. This registration, however, is merely a facade, as the company misuses its incorporation status to gain public trust and foster a false sense of credibility.

The SECP has clarified unequivocally that neither Summit 4X Trade, Summit AH Experts, nor Summit AH Experts (SMC-Private) Limited are authorized to accept any form of deposits or investments. It is important to note that while the SECP does issue a Certificate of Incorporation to registered entities, this certificate solely serves as proof of registration and does not grant permission to raise deposits or offer investment schemes.

In light of these developments, the SECP has added Summit AH Experts to its official "List of Companies Engaged in Unauthorized Activities", a clear warning sign to potential investors. Furthermore, the SECP has referred this case to the relevant investigative authorities for appropriate legal action against those involved in perpetrating this illegal activity.

Key Risks of Investing in Unauthorized Schemes

Investing in unauthorized schemes such as Summit 4X Trade and Summit AH Experts can have devastating financial consequences. Some of the primary risks include:

• Loss of Capital: Since these schemes operate without proper regulatory oversight, there is a high likelihood that investors will lose their entire investment.
• Lack of Legal Recourse: In case of fraud, investors have minimal legal protection as these schemes are not recognized by regulatory bodies.
• False Promises: Promises of high returns, such as 30% profit, are typically unsustainable and are used to deceive and attract investors.

How to Verify Legitimate Investment Opportunities

To avoid falling victim to such fraudulent schemes, the SECP strongly urges individuals to remain vigilant and conduct thorough due diligence before investing. Here are a few steps to ensure the legitimacy of an investment opportunity:

1. Check SECP Registration: While registration alone is not sufficient, it is a critical first step. Always ensure that the company is registered with the SECP.
2. Verify Authorization for Investment Activities: Beyond registration, verify whether the company has the necessary authorization to accept deposits or offer investment schemes. This information can be obtained from the SECP’s official website.
3. Be Wary of Unrealistic Returns: If an investment scheme promises unusually high returns with little or no risk, it is likely a scam.
4. Consult Financial Experts: Before making significant financial commitments, seek advice from qualified financial advisors.

In addition to issuing public warnings, the SECP has taken proactive measures by referring the matter to the relevant investigative authorities. This step is crucial in holding the perpetrators accountable and preventing further exploitation of the public. The SECP remains committed to safeguarding investor interests and maintaining the integrity of Pakistan’s financial markets.

What Investors Should Do Now

If you or someone you know has been approached by representatives of Summit 4X Trade or Summit AH Experts, it is essential to:

• Avoid Investing: Do not deposit any funds with these entities.
• Report the Activity: Inform the SECP or local law enforcement agencies about any suspicious investment solicitations.
• Educate Others: Spread awareness about such fraudulent schemes to prevent others from becoming victims.

The SECP continues to play a pivotal role in promoting transparency and accountability within Pakistan’s financial sector. Through rigorous monitoring, timely warnings, and public education campaigns, the SECP strives to protect investors from fraudulent schemes. The public is encouraged to stay informed and regularly check the SECP’s official website for updates on unauthorized entities.