Sebi: Telegram channel case: Sebi conducts search and seizure operations across multiple locations

Mumbai: The Securities and Trade Board of India (Sebi) on Thursday cracked down on market operators throughout the nation for allegedly manipulating shares by means of social media.

The regulator carried out search and seizure operations on the premises of seven people and one entity at a number of Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, New Delhi and Mumbai.

“These entities are reportedly working 9 Telegram channels with greater than 5 million subscribers to whom they had been making suggestions on chosen listed scrips,” Sebi mentioned in a late night press launch.

“Such suggestions induced the traders to deal within the mentioned scrips, thereby creating synthetic quantity and worth rise. This offered a chance to their linked entities to off-load their shares at increased costs and make important income at the price of unsuspecting retail traders.”

Sebi officers seized varied digital units and paperwork together with 34 cellphones, six laptops, 4 desktops, 4 tablets, two laborious drive disks and one pen drive from them.

Earlier than finishing up the search operations, the regulator took permission from Justice Purushottam B Jadhav of Sebi particular court docket.

The information, emails and different paperwork are being retrieved from the seized units and an in depth investigation is in progress, the regulator mentioned.

Sebi had obtained info that messages containing inventory suggestions and different funding recommendation with respect to chose listed firms had been being broadly circulated by means of web sites and social media platforms resembling Telegram, Fb, WhatsApp and Instagram.

Perpetrators of such fraud use varied advertising and marketing strategies to draw subscribers on their social media channels, Sebi mentioned.

Final 12 months in December, Sebi had carried out a search and seizure operation in Gujarat within the premises of sure people finishing up comparable manipulative actions by means of Telegram channels. Subsequently, the regulator had handed an order towards the directors of the channel.

The regulator alleged that these directors had constructed substantial positions in these shares previous to the circulation of suggestions and offloaded their positions subsequent to rise within the worth of those scrips making important income on the expense of unsuspecting traders.

Up to now, Sebi had seen that traders had been induced to spend money on shares of listed firms by means of bulk textual content messages. It raised the problem with its counterpart within the telecom sector.