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SEBI takes action against 6 people accused of using Telegram to manipulate stock market

Calling it ingenious, the manner in which the fraud was carried out was revealed by SEBI to partly involve FOMO.

Six people were “restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever” after they were found manipulating prices of various stocks using their Telegram channel, according to an interim order issued by the Securities Exchange Board of India (SEBI). SEBI‘s order also impounded bank accounts belonging to the six accused for an amount of Rs. 2,84,29,948— the proceeds accrued through their unfair practices. They will also have to open an escrow account with a nationalised/scheduled bank and deposit the impounded amount within 15 days. Moreover, the accused cannot dispose of any assets unless they deposit the impounded amount in the escrow account besides providing a full inventory of assets held in their name. SEBI has also directed them to close out/square off their open position in any exchange-traded derivative contracts within three months. Why this matters: Social media has become fertile ground for disinformation and there are thousands of influencers using platforms to give recommendations or promote stocks of their choice with little to no oversight. The order by SEBI brings into focus the magnitude of the problem and the recourse available to investors. How did the accused use social media to manipulate stock prices? The matter was brought to SEBI’s attention after it received two undated complaints on July 30 and October 11 last year. They alleged that few people, who do not possess SEBI’s approval to function as intermediaries in the securities markets, were “using social media platforms like Telegram and…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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