'Ástroturfing': Sebi cautions investors against fraudulent stock-tip WhatsApp groups. Here's what it said
Market regulator Securities and Exchange Board of India (SEBI) on Thursday cautioned investors against fraudulent WhatsApp stock-tip groups that use 'astroturfing' – fake endorsements and profit claims – to create a false impression of credibility and lure investors.
"To make these calls look credible, certain members, acting in concert with the operators, post false claims of profit and praise the 'expert'. This practice, known as astroturfing, creates a false impression of genuine support and induces unsuspecting investors to act on the call," Sebi said.
The regulator also highlighted a tactic used by such groups after enforcement agencies or regulatory bodies take action against them.
Sebi noted that members are often contacted by a new number and invited to join another group, with operators claiming that the previous group had been banned due to restrictions on social media platforms.
One such message cited by Sebi reads, "Due to social media platform's risk control measures, our previous group has been banned. This new group will provide daily recommendations of quality stock information and trading guidance. Please join the group."
Advising investors to exercise caution, Sebi said they should not join invitation-only WhatsApp groups operated by unknown persons or individuals claiming to be stock market experts, particularly those using overseas numbers.
Investors have also been advised not to be influenced by messages containing praise, profit claims or trade confirmations posted by other members, as such posts could be planted to create a misleading impression.
The regulator said messages claiming that a group had been suspended, closed or banned, and inviting members to join a new group should be treated as red flags.
It further advised investors against opening accounts on, or transferring money to, trading platforms or applications recommended by such groups. Investors should also refrain from sharing their investment holdings or trading account details with the operators, the regulator advised.
"Deal only with Sebi-registered intermediaries and use only authentic trading apps," the regulator said, adding that investors could verify the registration status of intermediaries through its official website.
Sebi said the statement was intended to caution investors against acting on stock tips and trading calls circulated through such closed fraudulent WhatsApp groups and urged them to remain vigilant while dealing in the securities market.
For about a decade, Livemint—News Desk has been a credible source for authentic and timely news, and well-researched analysis on national news, business, personal finance, corporates, politics and geopolitics. We bring the latest updates on all the listed companies on BSE and NSE, startups, mutual funds, Union ministries, geopolitics, and untapped human interest stories from around the world, helping our readers to stay informed on the latest developments around the globe. Our Coverage Areas 1. Companies: Comprehensive news and analysis on listed and unlisted companies, corporate announcements, corporate chatter, C-suite, business trends, hiring alerts, layoffs, work-life balance, world's top billionaires and richest and more. 2. Personal finance: Insights into mutual funds, small savings schemes like - PPF, SSY, post office savings scheme, stock to watch, personal loans, credit cards, top bank FDs, real estate, income tax and more. 3. Politics: Comprehensive coverage of general elections, state elections and bypolls, Lok Sabha, Vidhan Sabha, Parliament, PMO, PIB, finance ministry, home ministry, among other union ministries and government departments. 4. National News: From metro cities like Delhi, Mumbai, and e to untapped stories from rural India, we cover human interest, health, education, crime and courts, and law and order, among other areas of public interest. 5. Economy: In-depth analysis of India's macro and micro-economic indicators like- GDP, inflation, forex, fiscal deficit, current account deficit, interest rate cycle, economic recovery, RBI circulars, indirect taxes, GST, Insolvency and Bankruptcy imports, exports and everything that impacts Indian economy. 6. Geopolitics: Well-rounded and deeply researched coverage on US News, Oval Office European Union, Ukraine Russia War, middle-east crisis, royal families and global leaders like - Donald Trump, Vladimir Putin, Kim Jong Un, Xi Jinping and premiers of other leading economies in the world. Meet the Team 1. Gulam Jeelani, Political Affairs Editor 2. Sugam Singhal, Senior Assistant Editor 3. Chanchal, Assistant Editor 4. Sanchari Ghosh, Chief Content Producer 5. Pratik Prashant Mukane, Chief Content Producer 6. Sayantani Biswas, Chief Content Producer 7. Ravi Hari, Deputy Chief Content Producer 8. Garvit Bhirani, Deputy Chief Content Producer 9. Akriti Anand, Senior Content Producer 10. Jocelyn Felix Fernandes, Senior Content Producer 11. Swastika Das Sharma, Content Producer 12. Mausam Jha, Content Producer 13. Riya R Alex, Trainee Content Producer
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.