Reining in Goat Funds to Curtail Fraud in India

A financial regulator cracks down on collective-investment funds

India’s stock market regulator is cracking down on collective-investment funds—which take money from small investors and put it in anything from time-share resorts to mango orchards to goat farms. By forcing the funds to register, the Securities & Exchange Board of India (SEBI) hopes to root out sketchy operations like Saradha, an investment company that collapsed last year, wiping out the savings of 1.74 million customers. “Where there is money, there are bound to be some sharks,” Finance Minister Arun Jaitley told Parliament’s lower house in August before it passed a bill giving SEBI additional enforcement powers.

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