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Beware of stock tips on social media
Mar 14, 07:03

SEBI has cracked down on stock-market operators who were offering stock tips on social media to manipulate stock prices. The operators' modus operandi is commonly known as pump and dump. That is, stock tips are disseminated widely to draw a large number of retail investors to a particular stock. This sudden increase in investor interest, pumps up the stock's price. Once the price peaks, the con artist sells or dumps the stock. This is usually done with stocks that have low trading volumes, which makes the stocks easier to manipulate. In the past, certain Indore-based entities were hauled up for misusing SEBI's RIA licence to give such misleading stock tips.

Modus operandi