What is Investment Fraud? Investment fraud is a deceptive practice where individuals or groups trick people into giving money under the pretence of a legitimate investment. Many people believe that only complex schemes, such as stock market manipulation, count as investment fraud. Scammers often exploit the lack of awareness, the trust people place in financial advisors, or the rapid spread of online investment platforms. Regulatory bodies like SEBI and the Reserve Bank of India regularly issue warnings about such frauds, highlighting the importance of vigilance.