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Indian Investors Lose Millions in Phishing Scam
4 Nov
Summary
- Nearly 30 Indian investors report unauthorized Stockal account access.
- Blue-chip holdings sold, replaced with a stock that dropped 60%.
- Investors allege phishing attacks compromised their login details.
Approximately 30 Indian investors are alleging that their Stockal accounts were accessed without authorization. These investors reported that their valuable US blue-chip holdings were sold off, and the proceeds were used to purchase shares in Zhibao Technology Inc. (ZBAO).
This little-known stock subsequently experienced a drastic decline, losing nearly 60% of its value. One investor reported a loss of approximately Rs 4.26 crore after their $335,768 in stocks were converted into ZBAO shares that fell from $1.05 to $0.42.
Investors suspect a coordinated "pump-and-dump" scheme, where a thinly traded stock's price is artificially inflated. Stockal attributes the breaches to phishing attacks that compromised customer login details. However, DriveWealth, Stockal's US brokerage partner, points to security weaknesses within Stockal.
Complaints have been filed with the Securities and Exchange Board of India, the US Securities and Exchange Commission (SEC), and Bengaluru police. The differing explanations from Stockal and DriveWealth leave investors uncertain about accountability for their losses.
