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SEBI takes action against Telegram Messenger channel

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SEBI in furtherance to its effort to check use of social media by fininfluencers to manipulate scrips and prey on innocent investors have passed an order against certain fininfluencers using Telegram Messenger for scalping.

SEBI Whole Time Member on April 26, 2023 has passed an order in the matter of Stock Recommendations using Social Media channel (Telegram Messenger) wherein SEBI alleges that the Noticees have engaged in ‘Scalping’. Scalping means recommending a stock to drive up the share price and then selling shares of the stock at inflated prices to generate profits. In the present instance noticees were administrators of the Telegram channel and would recommend stocks to their followers after they themselves had purchased it. Once the share price would rise due to their recommendations they would dump their holding.

SEBI has held the noticees liable for fraudulent and unfair trade practices and has imposed a penalty of around INR 5.68 crore and has also directed noticees to disgorge unlawful profit in tune of INR 2.84 crore.

The complete order is enclosed for reader’s views.

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