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The head of India’s oldest stock exchange has warned of the growing danger of investment scams and deepfakes preying on the country’s large cohort of retail traders.
Sundararaman Ramamurthy, the chief executive of the BSE bourse, said fraudsters had used his likeness to try to dupe the public and his own employees in recent months.
“It’s going to be an ongoing menace, that much is sure,” Ramamurthy said about deepfakes in a Financial Times interview. “It’s getting very sophisticated.”
The BSE and its larger rival, the National Stock Exchange of India, last month issued statements warning millions of the country’s retail traders to be cautious of investment advice on social media after their respective chief executives became the targets of deepfakes and hyper-realistic video, audio or image manipulations.
WhatsApp messages pretending to be Ramamurthy, 61, were sent to BSE staff looking to con them out of money, along with manipulated videos of him telling people on social media to join investment communities.
“One of my friends called me early morning that day and he said: ‘Hey Sundar you’ve become a celebrity . . . you have a deepfake video’”, Ramamurthy said in his office in Mumbai. “Did I feel very happy about it? No.”
Across the world, enforcement agencies are struggling to curb waves of manipulated videos and fraudulent social media messaging. In India, where multi-week elections are under way, Bollywood stars have filed police complaints after viral fake videos showed them criticising Prime Minister Narendra Modi.
Deepfakes of prominent Indian corporate leaders from Mukesh Ambani to Ratan Tata have also surfaced. In December, Tata made an Instagram post to label a video that showed him supposedly urging viewers to make “risk-free” investments as “fake”.
While the BSE chief has filed a police complaint, officials at the bourse admit they have limited resources to fight back, with many of the scams originating from IP addresses outside of India, making it difficult to identify the scammers.
An increasing number of Indians are falling victim to online scams. A survey by pollster LocalCircles last year found that 39 per cent of 32,000 respondents said they or their family members had been victims of financial fraud in the past three years.
Since the Covid-19 pandemic, millions of Indians have taken to trading stocks and riskier derivatives, helped by cheap data and online retail trading platforms. About a quarter of trades were made on mobile devices in April, up from 5 per cent five years ago, according to BSE data.
India’s capital markets watchdog warned last year that 90 per cent of active retail traders lost money on options and futures contracts. The Securities and Exchange Board of India has sought to crack down on unauthorised investment influencers and stepped in to cap frothy domestic activity that has pushed up small- and mid-cap stocks.
Ramamurthy said the BSE, established in 1875 and formerly known as the Bombay Stock Exchange, ran more than 10,000 investment seminars a year and that there should be more market education “from all levels”. However, he said he had not seen “any economic dent” from the scams.
A veteran exchange executive who worked for years at the rival NSE, Ramamurthy has attempted to revitalise the BSE since joining in January 2023.
The exchange head has aggressively pushed into new derivative products and revamped the company’s own tech platforms, slowly clawing back market share from the NSE, which accounts for about 90 per cent of cash trading volumes and 80 per cent of derivatives in the country.
“The entire world today is looking at India in terms of a good destination for investment,” said Ramamurthy. “In such a situation having a concentration risk is not a great thing.”
