'Deepfaked' investing scams explode; here're 6 tips to outsmart them

The Sebi website carries contact details, such as postal address, email ID and phone number, for every registered entity. (Photo by Fernando Arcos: Pexels)

What if a highly-respected investment advisor, with decades of experience in the market, asked you to join a Telegram group where he would share stock ideas that delivered exceptional returns? Promised that he would give 3x the promised returns if his advice did not deliver?

That's the deepfake video that was doing the rounds till recently. While this video had its faults--of a highly mechanical delivery of speech--it had closely captured the timbre of the veteran advisor's voice and his soft lisp. It could have sounded compelling to a newbie.

The advisor quickly raised alarm and the video has been taken down from various channels.

Deepfake videos of many market veterans have become commonplace. There have been fake videos featuring the Chairman and Managing Director of Reliance Industries, Mukesh Ambani; founder of Infosys, Narayana Murthy; and the director of MK Ventures Capital Madhusudan Kela, among others. Most recently, the National Stock Exchange (NSE) recently issued a warning to investors about fake videos featuring the exchange's MD & CEO Ashishkumar Chauhan.

The exchange said that the videos seem to have been made with sophisticated technologies to imitate the voice and facial expressions of Chauhan.

Most of these videos nudge the viewers into signing up for an illegal portfolio management service (PMS), a platform that offers crypto investments and other such unregulated assets or offer stock picks.

How can investors be better prepared in the age of deepfakes?

As the technology gets better, spotting deepfakes gets harder. Here are six tips to spot a deepfake:

1 Check Sebi website

The Securities and Exchange Board of India (Sebi) has websites that lists entities registered with it and regulated by it. Whenever anyone suggests investing or subscribing to a financial service — a PMS, AIF or an investment advisory — check on the registered list to see if it is listed there.

2 Devil is in the details 

Fraudsters are getting smarter and can make their names look very similar to registered entities.

In January 2023, Sebi passed an order against one such entity and its proprietors, who impersonated a registered investment adviser by using the same name, and asked it to return more than Rs 43 lakh it collected in fees.

The only things that set the unregistered entity apart from the registered one was that it was a proprietorship while the other was a partnership. This difference would not have obvious to a regular investor.

So, closely check the spellings and the other details for any discrepancy.

Also read: NSE warns against fake videos of CEO Ashishkumar Chauhan suggesting stocks

3 Use official communication channels

If all details match, reach out to the registered entity through its official channels of communication, available on the Sebi website, to ensure that you are interacting with the legitimate entity and not an imposter.

Sebi's website carries the postal address, a phone number and an email ID of every registered entity.

4 Look for visual inconsistencies

Researchers at Kellogg's School of Management have written about visual cues to look for to spot deepfakes.

Here are four that may be relevant:

One is to look at the cheek and forehead — to see if they appear too wrinkly or too smooth, and inconsistent with the aging that can be seen in the subject's eyes or hair.

Two, pay attention to the shadows around the eyes and eyebrows. In deep fakes, the shadows may not fall in line with the natural physics of the scene.

Three, look at the glasses, the glare that falls on them may not be consistent with the lighting of the room or move as the subject moves.

Four, pay attention to the subject's blinking — if they do it too often or too less and pay attention to the lip movements if they look natural.

5 Take a closer look at yourself

Kaspersky, the Russian cybersecurity giant, in a post on identifying fake news, makes some interesting suggestions.

Besides the obvious such as checking the source and author, Kaspersky also suggest maintaining a critical mindset when consuming content and also taking a closer look at your biases. That is, a fake content that reflects the viewer's bias — for instance getting rich quickly through crypto assets — may be able to scam the viewer more easily.

Kaspersky also suggests looking at the comments posted under such content since they can be auto generated or be posted by hired hands. The comments can help a viewer look at the content more circumspectly.

Also read: Veteran investor Madhusudan Kela is the latest deepfake video victim

6 Report such content

Report any such videos, reels, or content shared with you. This helps break the transmission.

It may seem tedious to keep reporting such content when there does not seem to be an end to such content but it helps alert regulators to new forms of market manipulations.