Guaranteed 18% on WhatsApp

The advertising is misleading on several counts. A 'guaranteed 18% annual return' is a return promise that no mutual fund can make, and 'capital fully safe' denies market risk. Using a three-year chart of an equity fund without a balanced risk warning implies that past performance will continue. Calling the fund 'government-backed' because it holds some government securities is false: the fund is not a government guarantee, and the equity portion can fall. The distribution structure is also non-compliant. The 12 sub-distributors are not certified, and there is no evidence of written agreements, training, supervision or approved marketing material. Collecting cash is a serious breach, and depositing client cash into a personal bank account is commingling and a potential fraud or money-laundering red flag. Mr. Iqbal's complaint shows that the misleading promise directly caused an unsuitable sale; a 9% fall in three months is inconsistent with a client who was told he could not lose money.

The AMC should treat this as a serious conduct and AML matter. It should immediately suspend new business through Bilal and the sub-distributors, secure records, and investigate all applications sourced through them. It should contact Mr. Iqbal, obtain his version and documents, explain the actual risk and the fund's performance, and follow its complaint-handling and redress process. The AMC should verify whether each client received a risk profile, product disclosure and correct application documentation, and whether cash was properly received into a designated account. The personal bank account issue must be escalated to compliance and AML, with a decision on a suspicious transaction report through the proper channel. The AMC should report the matter internally and to the regulator as required, review Bilal's distributor agreement, and consider termination. It should also correct the marketing record and preserve evidence, including the WhatsApp and Facebook posts.

Marketing must be fair, balanced and not misleading. It should state the fund's objective and risks, avoid guaranteed returns and 'safe capital' language, include a clear warning that past performance does not predict future results, and avoid selective performance charts. Any use of social media should be approved and monitored, with a record of posts and client responses. Distribution should be through certified individuals who have written agreements with the distributor or AMC, defined roles, training and supervision. Sub-distributors should not be 'friends helping out'; if they introduce clients, they must be onboarded, certified where they advise, and paid through disclosed, documented arrangements. Cash should never be collected by distributors or sub-distributors; clients should pay into the AMC's designated bank account by cheque or transfer. The AMC should monitor sales quality, complaints and unusual cash patterns, and take action before a misleading post turns into a client loss.