Unlisted shares promise big returns, but fraud risks lurk in the shadows. In 2025, SEBI reports a 25% spike in complaints despite tighter rules. Don’t let scammers steal your hard-earned money chasing pre-IPO dreams. Here are the top 10 fraud risks in unlisted trading—and simple ways to dodge them.

1. Fake Platforms Posing as Legit Brokers

Fraud Risk: Bogus apps promise Nykaa-like gains but vanish with your cash. Avoid It: Stick to SEBI-registered UMIs like Planify or Stockify. Check sebi.gov.in for approvals. 2. Pump-and-Dump WhatsApp Groups  Fraud Risk: “Insider tips” hype shares like Zepto, then insiders sell at peaks. Avoid It: Ignore unsolicited groups. Verify via Trendlyne; report to SEBI’s SCORES portal. 3. Forged Company Documents Fraud Risk: Photoshopped financials show fake profits for obscure firms. Avoid It: Demand demat proofs and quarterly filings. Use EquityList for verified disclosures. 4. Phantom Escrow Services  Fraud Risk: Seller’s claim “escrow protected” but pocket funds directly. Avoid It: Insist on platform-managed escrow (mandatory for trades >₹5 lakh under SEBI).

5. Insider Trading Masquerading as Tips

 Fraud Risk: “Guaranteed 100% returns” from unverified “experts.” Avoid It: No legit tip guarantees win. Research independently; cap allocation at 10%.

6. Fake Valuation Reports

Fraud Risk: Inflated DCF numbers without independent auditors.  Avoid It: Check for CA-certified reports every 6 months, per 2025 SEBI norms. 7. Non-Demat Share Certificates Fraud Risk: Paper shares that can’t transfer to your demat account. Avoid It: All trades must be demat-only. Confirm via CDSL/NSDL before paying. 8. Exit Scam Promises  Fraud Risk: “Buy now, IPO next month” that never happens. Avoid It: Track IPO filings on NSE/BSE sites. Favor liquid secondary markets on UnlistedZone.

9. High-Pressure Ponzi-Like Schemes

Fraud Risk: “Limited spots” for club deals with unrealistic yields. Avoid It: Legit deals have no rush. Use registered advisors; start with ₹10k lots.

10. KYC Bypass Tricks

Fraud Risk: “Quick trades without PAN/Aadhaar” to dodge traceability. Avoid It: Full KYC is mandatory. Platforms must verify; walk away from shortcuts. Spotting Red Flags Early Fraud risks thrive on FOMO and secrecy. Watch for guaranteed returns (>50%), unsolicited calls, or offshore accounts. In 2025, SEBI’s ₹1 crore investor fund covers verified scams—report fast.     Smart Steps to Trade Safely

• Diversify: Spread across 5-10 scrips from varied sectors.
• Research Tools: Trendlyne, UnlistedZone for data.
• Small Starts: Test with ₹20,000 before scaling.
• Paper Trail: Screenshot everything; use app wallets.

  Platforms handled 60% more compliant trades this year, slashing fraud risks. Stay vigilant—your portfolio will thank you. Ready to trade unlisted shares without fraud risks? Check SEBI-approved lists today. Many Fintech, Industrial Electric Vehicles (EV) , AI, and pharmaceutical companies remain private for many years. Unlisted investing allows access to these sectors well before they become available to traditional IPO investors. Disclaimer: Unlisted shares are high-risk. This isn’t advice—consult a SEBI-registered advisor.