'SEBI is killing it': Zerodha's Nithin Kamath hails regulator's order cracking down on stock manipulation via YouTube
SEBI on Thursday passed two interim orders against entities that used YouTube channels to manipulate stocks, barring them from the capital markets
Market regulator Securities and Exchange Board of India (SEBI) on Thursday shared an interim order against the company “Sadhna Broadcast ltd" for using Youtube channels for manipulating stock prices. The regulator, in preliminary investigations, identified several entities that used the video streaming platform to pump and dump stocks.
"These elaborate orders should hopefully put some fear amongst unauthorized tipsters and people offering unauthorized portfolio management services. Such actors damage the sanctity of capital markets in India," he added.
These entities - a mix of traders and market analysts - used four YouTube channels to market stocks, according to the regulator. SEBI's interim orders came on the back of a year-long investigation following investor complaints that alleged YouTube channels were being used to influence them to buy particular stocks.
These YouTube videos peddled false and misleading news to recommend that investors should buy the Sadhna stock for extraordinary profits, Sebi said in its interim order. Subsequent to the release of the misleading YouTube videos, there was an increase in the price and trading volume of the Sadhna scrip.
Sebi has classified these 31 entities into categories - creator of YouTube channels (Manish Mishra), net sellers/ promoters and profit makers (NSs), Volume Creators (VCs) and information carriers (ICs).
Kamath highlighted that at Zerodha, they show a nudge, asking users to be careful when we spot cases of pump and dump and in the last 3 years of nudges, potential scammy stock trading volumes as a percentage of overall equity volumes are down by around 90% at Zerodha.
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