SEBI bans 6 persons accused of making illegal profits through social media

The Securities Exchange board of India has decided to ban 6 individuals from the securities market who have been accused of using social media platforms such as WhatsApp and Telegram to share tips about stock markets, wherein they would try to influence the market through untrue recommendations and suggestions artificially.

SEBI had received various complaints about unregistered individuals posing as intermediaries. They used social media to influence and sway stock prices. Their modus operandi was that they would purchase shares of small-cap companies in bulk later, they would send in fake and pointless messages on social media trying to influence people to buy these low priced stocks with a bogus claim that there would be an immediate hike in the price of these stocks. By doing this, they instigate the other users to buy their stock which makes their profit go up. As soon as the prices of these stocks go up, they back out and sell their shares and end up making a lot of profit through it.