Report Wire - SEBI bans 6 individuals for misusing social media to make ‘illegal profits’

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SEBI bans 6 individuals for misusing social media to make ‘illegal profits’

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SEBI bans 6 persons for misusing social media to make ‘illegal profits’

The Securities and Exchange Board of India (Sebi) has banned 6 individuals from securities market until additional orders for alleged involvement in utilizing social media platforms like Telegram and Twitter to artificially affect inventory costs and make unlawful income.
The six individuals are Himanshu Mahendrabhai Patel, Raj Mahendrabhai Patel, Jaydev Zala, Mahendrabhai Bechardas Patel, Kokilaben Mahendrabhai Patel and Avaniben Kirankumar Patel. The regulator additionally impounded financial institution accounts of the six individuals for an quantity of Rs 2.84 crore.
“The modus operandi indicated that certain entities actively operating through social media channels are first taking a position (purchasing shares) in small cap companies in bulk quantities and then sending baseless and fraudulent messages indicating strong possibilities of immediate price hike in such scrips through such social media channels thereby instigating others to take bullish position in those scrips,” mentioned a Sebi order. Ultimately after the costs go up, they take opposite positions (promoting their beforehand acquired shares) thereby making income out of such trades executed underneath such fraudulent scheme and system, Sebi mentioned.
Their Telegram channel offered advice to its subscribers for buying and selling in each money in addition to derivatives segments, for each intra-day in addition to positional trades.
The suggestions issued with respect to the money section are majorly centered on small cap scrips, Sebi mentioned.