• SEBI has carried out search and seizure operations at various places in India for unearthing the misconduct related to providing illegal investment advice.
• Fraudulent Investment Advice to Five million subscribers, connected through network of Nine Telegram Channel.
• Perpetrators of frauds are employing new strategies using technologies to dupe innocent investors.

SEBI is cracking down heavily on fringe element attempting to dupe investors of their hard-earned money. SEBI has recently carried out search and seizure operations at various places in India for unearthing the misconduct of various entities providing illegal investment advice to millions of investors through a nexus of telegram accounts. In this connection, SEBI has carried out its operations on few individuals including a corporate entity, which are allegedly providing investment advice to five million subscribers, in favour of select scrips. These five million subscribers were connected through a network of nine telegram channel.

The step is a great move by SEBI for protecting market integrity as millions of new retail investors have joined the market during 2020 and 2021. Small investors are scammed by fraudster to make quick money. Small investors make investment decision based on false and motivated tips. Entities and individual behind the motivated tips offload their holdings at higher prices.  Unsuspecting retail investors purchases the same and get trapped in the process. Many a times they end up loosing their life savings in the market.

Seized data, emails and other documents are being investigated and examined by SEBI.

SEBI received information that stock tips and other investment advice for selected listed firms are being widely disseminated via websites and social media platforms such as Telegram, Facebook, WhatsApp, Instagram, and others.

In order to scam investors, perpetrators of such frauds are now employing new strategies and technologies. Bulk SMS was previously used to persuade investors to invest in or purchase the stocks of certain publicly traded firms. In this regard, SEBI and the Telecom Regulatory Authority of India (TRAI) worked to lower the securities market’s vulnerability to manipulation through the exploitation of mass communication mediums such as Bulk SMS.

SEBI is always working to educate and warn investors about the dangers of relying on investment suggestions received through social media platforms. Investors should use extreme caution when making investing decisions in the securities market, according to SEBI.

The alleged Telegram Channel administrators had built big positions in suggested scrips prior to the distribution of recommendations and had offloaded their positions following the rise in price of these scrips, reaping significant gains at the cost of innocent investors. SEBI has also issued consultation paper on pricing of IPO’s by New Age Technologies Company (NATC). All these steps are significant moves in protecting retail investors and for strengthening the Capital Market.

Bureau Galactik Views