Home / News / India /  Sebi conducts search and seizure operations in social media stock tips scam

MUMBAI : The Securities and Exchange Board of India (Sebi) on Thursday conducted search and seizure operations at the premises of seven individuals and one company in various cities for circulating stock tips on social media to make profits. The operations were conducted at Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai Sebi said in a statement.

Sebi said it found various documents and records including laptops, mobile phones, desktops , tablets , hard drive disks and pen drives, which were used to send out stock recommendations. Sebi is conducting a detailed investigation in this regard. The regulator said it identified nine Telegram channels with total subscribers above five million to whom they recommended various stock tips. Such advice enticed investors to trade in these scrips, resulting in an artificial increase in their volume and price. This allowed companies linked to these entities to sell their shares at a higher price and profit handsomely at the expense of retail investors.

The regulator also urged investors to remain cautious and not rely on unsolicited investment tips received through platforms such as Telegram, WhatsApp, Instagram and Facebook.

Sebi started the investigation after it received information that such stock tips and recommendations with respect to select companies are being widely spread through multiple social media platforms.

“Perpetrators of such fraud use various marketing techniques to attract subscribers on their social media channels", Sebi said.

Earlier on 12 January, Sebi had cracked down on a similar stock recommendation scam over social media, imposing a fine of 2.84 crore on six individuals and barring them from accessing the stock market. According to Sebi, these individuals were giving unsolicited stock recommendations using social media channels to manipulate stock prices and make illegal profits.


Priyanka Gawande

Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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