The Securities and Exchange Board of India (Sebi) on Thursday carried out search and seizure operations at premises linked to seven people and a corporate body in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi and Mumbai in as part of its investigation into unsolicited stock market tips and investment advice to retail investors via social media platforms.
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The market regulator said these entities operated nine Telegram channels, giving recommendations to more than 5 million investors on selected listed stocks.
“Such recommendations induced investors to trade said scrips, thereby creating an artificial rise in volume and price. This gave their related entities the opportunity to sell their shares at higher prices and make significant profits at the expense of unsuspecting retail investors,” a statement from the regulator said.
Sebi said he seized documents, 34 cell phones, 6 laptops, several desktop computers and hard drives during his search operations on Thursday.
This is not Sebi’s first crackdown on individuals and entities using social media to give unsolicited stock advice.
In December 2021, Sebi had tracked down a few people who were carrying out a similar operation via Telegram. In January 2022, the regulator issued an order against these entities for violating its standards.