SEBI conducts search and seizures at multiple locations in country

PR NO.7/2022, Dated: 10-03-2022

The market regulator, SEBI conducted search and seizure operations at the premises of 7 individuals and 1 corporate entity at multiple locations in Ahmedabad, Bhavnagar, Neemuch, Delhi, and Mumbai. During the Search and Seizure operations, SEBI Officials seized various records and documents including Mobile Phones, Laptops, Tablets, Hard Drive Disks, and Pen drives. Further, SEBI also cautions investors not to rely on unsolicited investment tips received through Social Media platforms.

SEBI said that entities were reportedly operating 9 Telegram channels with more than 5 million subscribers to whom they were making recommendations on selected listed scrips. Such recommendations induced the investors to deal in the said scrips, thereby creating artificial volume and price rise. This provided the opportunity to their linked entities to off-load their shares at higher prices and make significant profits at the cost of unsuspecting retail investors.

SEBI said that it had received information that messages containing stock tips and other investment advice with respect to selected listed companies are being widely circulated through websites and social media platforms, such as Telegram, Facebook, WhatsApp, Instagram, etc. Perpetrators of such fraud use various marketing techniques to attract subscribers to their social media channels.

SEBI further stated that it has been undertaking several campaigns including Press Releases to educate the investors to be vigilant while taking investment decisions based on stock tips. In the past, it was noticed that through Bulk SMS, investors were induced to invest in or purchase the stocks of certain listed companies. In this regard, SEBI collaborated with the Telecom regulatory authority of India (TRAI) to reduce the vulnerability of the securities market to manipulation through misuse of mass communication mediums like Bulk SMS. However, the perpetrators of such frauds are now adopting new methods and technologies to defraud the investors.

Earlier, SEBI Officials had conducted a search and seizure operation on December 01, 2021 in the premises of certain persons carrying out similar manipulative activities through Telegram channels. According to that, vide Order dated January 12, 2022, SEBI established that the administrators of a Telegram channel having a large subscriber base enticed the subscribers to act upon recommendations that were circulated by those administrators on the channel, leading to significant price and volume impact in various scrips.

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