Business

‘Stock tips’ on social media: Sebi conducts search ops

The Securities and Exchange Board of India (Sebi) on Thursday conducted search and seizure operations at premises linked to seven individuals and one corporate entity in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai, in connection with its probe into unsolicited stock tips and investment advice to small investors through social media platforms.

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The market regulator said these entities were operating nine  Telegram channels, giving recommendations to over 5 million investors on selected listed stocks.

“Such recommendations induced the investors to deal in the said scrips, thereby creating artificial volume and price rise. This provided opportunity to their linked entities to offload their shares at higher prices and make significant profits at the cost of unsuspecting retail investors,” said a statement by the regulator.

Sebi said it has seized documents, 34 mobiles phones, 6 laptops, multiple desktops and hard drives from its search operations on Thursday.

This is not the first crackdown by Sebi on individuals and entities using social media to give unsolicited stock tips.

In December 2021, Sebi had searched few individuals who were running a similar operation through Telegram. In January 2022, the regulator passed an order against these entities for violation of its norms.




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