“We need to address the issue of Ponzi schemes and it is essential to protect the money of small investors,” Pilot said.
The Serious Fraud Investigation Office is already looking into 67 companies allegedly running Ponzi schemes. Sachin Pilot in a written reply to the Lok Sabha said that all the said companies are being investigated.
The centre has issued an ordinance to empower the Securities and Exchange Board of India to directly conduct search and seizure operations, access call data records and initiate a crack down on Ponzi schemes.
The move would also help in addressing insider trading while providing more teeth to SEBI to regulate any pooling of funds under an investment contract involving a corpus of R100 crore or more and even attach assets in case of non-compliance.
Until now SEBI was allowed to carry out search and seizure operations only after securing judicial approval from the chief metropolitan magistrate.