Unauthorized Investment Advice and Fraudulent Trading Platforms: AMMC Calls for Public Vigilance

The Moroccan Capital Market Authority (AMMC) has issued a warning to the public and investors regarding the unauthorized practice of financial investment advice and the increasing prevalence of fraudulent trading platforms. These activities, facilitated by social media, expose savers to risks and can undermine market integrity. The AMMC has noted a surge in online recommendations for buying or selling stocks circulating on social media and private messaging groups. While these recommendations may appear benevolent, they could represent unauthorized financial investment advice, which is regulated by Law No. 19.14. This law requires prior authorization in the form of registration with the AMMC, which is crucial for ensuring investor protection through strict regulations. This authorization is built around several safeguards, including the advisor's integrity, professional competence, and the prevention of conflicts of interest. Additionally, these recommendations may conceal manipulative intentions, particularly through the "pump and dump" technique, where the public is encouraged to buy a stock before the initiator sells it for profit. Furthermore, the AMMC has highlighted the proliferation of potentially fraudulent trading platforms. These platforms often present themselves professionally, promising quick and high returns, and in some cases, may impersonate market professionals to gain investor trust. Their operations typically follow a recurring pattern: misleading advertisements, encouragement for an initial deposit, display of fictitious gains to entice further investment, withdrawal blockages, and eventual total disappearance of the platform. It is important to note that certain trading platforms (such as those dealing in gold and currencies) are not subject to AMMC oversight. Consequently, the prosecution of potential fraud on such platforms falls strictly under common law. The AMMC emphasizes that unauthorized investment advice or the dissemination of false or misleading financial information exposes the perpetrators to criminal sanctions, including imprisonment and fines. The primary protection for investors remains their ability to inform themselves and verify the reliability of the sources they consult. The AMMC encourages the public to remain vigilant against promises of high returns, verify the identities of their contacts, be wary of circulating advice, particularly in private messaging groups, and consult the official list of financial investment advisors available on the Authority's website. To support its prevention efforts, the AMMC plans to implement a digital awareness initiative aimed at combating investment fraud. It also reminds the public that the financial education portal "Capital Markets for All" is available to help them better understand the functioning of capital markets and various concepts related to investing in financial instruments.