Sujatha Sekhar Naik, CEO of SIDREC was recently interviewed for the feature Protecting Yourself From Investment Scams in Smart Investor, in which investors are taught how to identify and avoid investment scams. Some of the advice include avoiding pyramid schemes, Ponzi schemes, gold investment scams, and Swisscoin scams.

Why you should only invest in legitimate schemes

When you do not invest in legitimate schemes, you open yourself to investment scams which may leave you little or no recourse to avenues for help and redress. However, if you do find yourself in a situation where your investments are made through legitimate avenues such as licensed intermediaries (e.g. banks, brokers, fund management companies, unit trust management companies, and Private Retirement Scheme providers and distributors), and you have a dispute that involves financial loss, then you have access to SIDREC’s dispute resolution service.

We reproduce part of the feature article in Smart Investor, with some insights from Sujatha Sekhar Naik.

How to get your money back from investment scams

For monetary disputes not exceeding RM250,000 with authorised capital market intermediaries, investors can avail themselves to the services of Securities Industry Dispute Resolution Centre (SIDREC).

Sujatha Sekhar Naik, CEO of SIDREC emphasised on the importance of investing only into legal and licensed schemes, saying, “If you invest in illegal schemes, or through unlicensed or unauthorised entities or individuals, you deprive yourself of the protection and help that you can get when you invest in legitimate investments.”

“This included the checks and balances of the regulatory framework and the support built into the ecosystem such as SIDREC’s dispute resolution services,” she added.

According to Sujatha, SIDREC was set up by the SC to provide investors with a free and alternative avenue for redress (outside the courts) if their disputes cannot be resolved directly with capital market intermediaries who are SIDREC’s members.

“SIDREC is independent and impartial. It does not favour either the investor or the capital market intermediary but rather, takes all circumstances into account and brings parties together to try to resolve whatever problems they may have in a professional manner,” she said.

“We will first try to mediate a resolution and if this is not possible, we will review the matter through an adjudication hearing and make a decision that binds our member.”

SIDREC members include capital market intermediaries such as banks, stockbrokers, derivatives brokers, fund managers, unit trust management companies, private retirement scheme providers and distributors.

For the complete article Protecting Yourself From Investment Scams as featured in Smart Investor, you can read it here.