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

The Securities and Exchange Board of India (Sebi) on Thursday carried out search and seizure operations at premises linked to seven people and one company entity in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai, in reference to its probe into unsolicited inventory suggestions and funding recommendation to small traders via social media platforms.

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The market regulator mentioned these entities had been working 9  Telegram channels, giving suggestions to over 5 million traders on chosen listed shares.

“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,” mentioned a press release by the regulator.

Sebi mentioned it has seized paperwork, 34 mobiles telephones, 6 laptops, a number of desktops and exhausting drives from its search operations on Thursday.

This is just not the primary crackdown by Sebi on people and entities utilizing social media to present unsolicited inventory suggestions.

In December 2021, Sebi had searched few people who had been working the same operation via Telegram. In January 2022, the regulator handed an order towards these entities for violation of its norms.