SEBI scanner on scamsters giving fraud stock tips on social media
- SEBI conducted search and seizure operations in Gujarat, Madhya Pradesh, Delhi and Mumbai
- SEBI officers seized various records and documents from the custody of individuals
- SEBI said the groups were operating 9 Telegram channels with over 5 million users
The Securities and Exchange Board of India (Sebi) conducted search and seizure operations on March 10 in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai in its efforts to uncover market malpractice.
During the probe, Sebi officers seized various records and documents from the custody of individuals, including 34 mobile phones, six laptops, four desktops, four tablets, two hard drive disks, and one pen drive. According to the regulator, these groups were operating 9 Telegram channels with over 5 million users, to whom they were offering recommendations on certain listed equities.
Such advice enticed investors to trade in these equities, resulting in artificial volume and price increases. Data, emails, and other documents have been recovered from the seized devices, and a thorough investigation is underway, according to Sebi.
"SEBI had received information that messages containing stock tips and other investment advice with respect to selected listed companies are being widely circulated through websites and social media platforms, such as Telegram, Facebook, WhatsApp, Instagram, etc. Perpetrators of such fraud use various marketing techniques to attract subscribers on their social media channels," the regulator said in its release.
In view of this, Sebi has once again warned retail investors not to rely on such investment tips/advice acquired via social media platforms, and to exercise extreme caution when investing in the securities market.
Sebi authorities conducted a search and seizure operation at the properties of specific individuals engaged in similar manipulative acts via Telegram channels in December 2021.
Following this, Sebi established in a January 2022 order that the administrators of a Telegram channel with a huge subscriber base induced the subscribers to act on suggestions circulating on the channel, resulting in substantial price and volume effects in multiple scrips.
The Sebi Act gives the regulator the authority to inspect and seize books, registers, documents, including electronic and digital devices, from anybody involved in the securities market.
The Securities and Exchange Board of India (Sebi) conducted a similar investigation in 2017 in relation to the circulation of messages using WhatsApp.