Unregulated Investment Products Sold by Malaysia Mutual Fund Employees from Fake Mutual Fund Firm

 Your mutual fund/Wealth relationship manager, financial advisor agents, life planners are not financial experts. You still need to do due diligence.

Victims of investment scams gathered recently with NGO/Activists  at police station to protest about the many investment  scams that are happening. 

One victim claimed that she was duped into buying investment products by her regular mutual fund agent who works at a legitimate mutual fund firm. However, the investment product sold by her regular mutual fund agent belongs to a non existent mutual fund firm. The victim lost RM500k in the investment. The victim clamed the mutual fund agent was a known party and was only selling to earn extra income. The non existent mutual fund firm claimed that they could not pay out the victim promised returns due to the Covid19 pandemic. 

There were a couple of key areas why the victim got conned/scammed :

1. promised guaranteed return (higher than fixed deposits)

2. sold by a familiar party from a legitimate mutual fund company 

3. existence of investment agreement

Victim number 2 who hails from Yemen claimed that his trusted bank relationship manager  sold him the unregulated investment product. He did not want to reveal the bank's name.

There were a couple of key areas why the victim got conned/scammed :

1. promised guaranteed return  (higher than fixed deposits)

2. sold by a familiar party from a local bank (relationship manager)

3. use of the Sukuk (Islamic Bond) terms to sound legit

4. basic business - supposed invest in shrimp farming

Both the victims are not dumb people, being able to have hundreds of thousands of ringgit in the bank accumulated over their lifetime is not an easy feat.  Moral of the story is even products sold by your regular mutual fund agent needs to be scrutinized carefully. It is crucial to note that scams and fraudulent activities are not limited to a particular industry or sector. It can happen to anyone, regardless of their age, gender, or social status. Therefore, it is essential to be aware of the red flags and take necessary precautions to avoid being scammed.

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