WhatsApp stock tips: Nithin Kamath warns of more pump-and-dump schemes as ED freezes accounts worth Rs 200 crore

In a post on X, formerly Twitter, Kamath said such schemes remain a concern even in 2026, calling them one of the silliest ways for investors to lose money. He also warned that these cases could become more frequent as the market cycle advances, pointing to a rise in alleged pump-and-dump schemes operating through WhatsApp groups and influencers promoting stocks and initial public offerings (IPOs).

“It's become a cliché, but nowhere is ‘if it's too good to be true, it probably is’ truer than in the stock market,” Kamath said on his X handle on Tuesday. He urged investors to question messages promising easy returns and suggested using AI tools such as Claude or ChatGPT to assess whether a stock tip makes sense before acting on it. Such a check, he said, could save investors a significant amount of money.

The warning comes against the backdrop of an ED investigation into an alleged stock manipulation scheme involving two listed companies, in which trading accounts holding shares worth around Rs 200 crore have been frozen.

According to the agency, its Mumbai Zone conducted searches at 29 premises across six cities last week: Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar. The searches were carried out under the Prevention of Money Laundering Act (PMLA).

The case concerns alleged manipulation involving preferential allotments by the two companies between April 2023 and March 2024. The ED said a substantial portion of the funds used for the allotments allegedly came from a small network of connected individuals, firms and lenders.

Investigators suspect that shares acquired through the allotments were subsequently promoted through coordinated campaigns designed to drive up their prices before preferential allottees sold part of their holdings.

The agency said a large part of the money paid for the allotments came from a small circle of connected persons, firms and lenders.

According to the agency, WhatsApp groups operating under names such as 'Multibagger Stocks' allegedly circulated daily buy recommendations to retail investors between late December 2025 and February this year. The groups were reportedly operated from Bhavnagar in Gujarat using SIM cards obtained in the names of other persons in Haryana and Mumbai. Promotions were also carried out through X, SMS and other channels.

The ED said that "it appears that the stocks were promoted through various WhatsApp Groups to generate buying interest". "This resulted in significant increase in price and volumes of the scrip during the period when the scrip was getting promoted on WhatsApp groups. The preferential allottees took advantage of this increased buying interest and dumped a part of their shareholding to a large number of investors," it added.

Kamath's warning highlights the risks posed by stock tips that promise quick gains, particularly when they circulate through social media groups and are amplified by promoters. The ED's investigation illustrates how alleged coordinated promotion and share sales can leave investors exposed to losses when prices are artificially driven higher.