Stock Tips: SEBI Raids Multiple Locations; Warns Investors Not To Rely on Investment Tips from Social Media
Moneylife Digital Team 11 March 2022
To unearth market misconduct, the Securities and Exchange Board of India (SEBI) has conducted search and seizure operations at the premises of seven individuals and one corporate entity at multiple locations in Ahmedabad and Bhavnagar (in Gujarat), Neemuch (in Madhya Pradesh), Delhi, and Mumbai. These entities are reportedly operating nine Telegram channels with more than 5mn (million) subscribers to whom they were making recommendations on selected listed scrips. 
"Such recommendations induced the investors to deal in the said scrips, thereby creating artificial volume and price rise. This provided an opportunity to their linked entities to offload their shares at higher prices and make significant profits at the cost of unsuspecting retail investors. The data, emails and other documents are being retrieved from the seized devices and a detailed investigation is in progress," the market regulator says.
During the search and seizure operations, SEBI officials seized various records and documents, including 34 mobile phones, six laptops, four desktops, four tablets, two hard drive disks and one pen drive from the custody of these persons.  
SEBI says it had received information that messages containing stock tips and other investment advice concerning selected listed companies are being widely circulated through websites and social media platforms, such as Telegram, Facebook, WhatsApp and Instagram. Perpetrators of such fraud use various marketing techniques to attract subscribers to their social media channels.
SEBI has been undertaking several campaigns to educate investors to be vigilant while taking investment decisions based on stock tips. In the past, it was noticed that through bulk SMS, investors were induced to invest in or purchase the stocks of certain listed companies. 
In this regard, SEBI collaborated with the Telecom Regulatory Authority of India (TRAI) to reduce the vulnerability of the securities market to manipulation through misuse of mass communication mediums like bulk SMS. However, the perpetrators of such frauds are now adopting new methods and technologies to defraud the investors.
Earlier also, SEBI officials had conducted a search and seizure operation on 1 December 2021 in the premises of certain persons carrying out similar manipulative activities through Telegram channels. 
In an order on 12 January 2022, SEBI established that the administrators of a Telegram channel with a large subscriber base enticed subscribers to act upon recommendations circulated by those administrators on the channel, leading to significant price and volume impact in various scrips. 
These administrators had built substantial positions in these scrips before the circulation of recommendations and offloaded their positions subsequent to the rise in the price of these scrips, making significant profits at the expense of unsuspecting investors, the market regulator says.
Against this backdrop, SEBI, once again, has cautioned investors not to rely on such investment tips and advice received through social media platforms. It is also advised that investors should exercise utmost caution when taking investment decisions while dealing in the securities market.
3 months ago
apparent economic progress is due to dark dealers in shares
4 months ago
That SEBI played a pro-active role by collaborating with TRAI is very good news to the ears.
Wish other Govt. agencies take the cue and collaborate with each other in ridding our
Society of the prevailing menaces.
Free Helpline
Legal Credit