SEBI conducts searches in Delhi, Mumbai, Gujarat and MP over market misconduct

Market regulator SEBI on Thursday conducted search and seizure operations in multiple locations across the country, including Delhi and Mumbai, to unearth market misconduct. 

The Securities and Exchange Board of  India  (SEBI) said that the operations were carried out at the premises of 7 individuals and 1 corporate entity at multiple locations in Ahmedabad and Bhavnagarin Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai. 

SEBI said that during the search and seizure operations, officials seized various records and documents including 34 mobile phones, 6 laptops, 4 desktops, 4 tablets, 2 hard drive disks and 1 pen drive from the custody of these persons. It also said they were reportedly operating Telegram channels with more than 5 million subscribers, recommending scrips.

"Such recommendations induced the investors to deal in the said scrips, thereby creating artificial volume and price rise. This provided opportunity to their linked entities to off-load their shares at higher prices and make significant profits at the cost of unsuspecting retail investors. The data,  emails, and other documents are being retrieved from the seized devices and a detailed investigation is in progress." the marker regulator added.

SEBI 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.

Earlier in December, SEBI officials had conducted a  search and seizure operation in the premises of certain persons carrying out similar manipulative activities through Telegram channels. Pursuant 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. These administrators had built substantial positions in these scrips prior to the circulation of recommendations and offloaded their positions subsequent to the rise in the price of these scripts making significant profits at the expense of unsuspecting investors.

SEBI also cautioned investors not to rely on unsolicited investment tips received through social media platforms. It is also advised that investors should exercise utmost caution while taking investment decisions while dealing in the securities market.

Meanwhile, the capital market regulator earlier today had imposed a total of Rs 15 lakh fine on three entities for indulging in non-genuine trades in stock options on BSE.

In three separate orders, the regulator slapped a fine of Rs 5 lakh each on Priti Sultania, Deepa Hirani and Vivek Rungta HUF.

The orders came after Sebi observed large scale reversal trades in the stock options segment of BSE, leading to the creation of artificial volume in the segment.

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