SEBI cracks down fraudulent stock tips on Social Media

The Securities and Exchange Commission of India (Sebi), a capital market regulator, searched and seized several facilities in Ahmedabad, Bhavnagar, Gujarat, Neemuch, Madhya Pradesh, Delhi and Mumbai, on March 10. 

During the investigation, Sebi officers seized records and documents for these individuals, including 34 mobile phones, 6 laptops, 4 desktops, 4 tablets, 2 hard drives, and USB sticks. According to regulators, these companies operate nine Telegram channels with more than 5 million subscribers and have provided recommendations on selected listed stocks.

Sebi has said that the recommendations encouraged investors to deal in these stocks, thereby creating artificial volume and price rise. The data, emails and other documents are being retrieved from the seized devices and a detailed investigation is in progress.

Against this background, Sebi again warns individual investors not to rely on such investment tips/advice received via social media platforms and should be very careful when investing in the securities market. 

The regulator has said in its release that it received information about messages containing stock tips and other investment advice with respect to selected listed companies that are being widely circulated through websites and social media platforms, like Telegram, Facebook, WhatsApp and others.