Sebi cracks down on scamsters giving fraudulent stock tips on social media

The data, emails, and other documents are being retrieved from the seized devices and a detailed investigation is in progress, Sebi said. (Image: Shutterstock)

Capital markets regulator Securities and Exchange Board of India (Sebi) on March 10 conducted search and seizure operations at multiple premises in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai, in its efforts to unearth market misconduct.

During the investigation, 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. These entities, according to the regulator, were operating nine Telegram channels with more than five million subscribers to whom they were making recommendations on select listed stocks.

Such 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, Sebi said.

"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.

Against this backdrop, Sebi, once again, cautioned retail investors not to rely on such investment tips/advice received through social media platforms and also advised them to exercise utmost caution while investing in the securities market.