SEBI imposes ₹2.84 crore penalty on Telegram channel for stock manipulation
2 min read . Updated: 26 Apr 2023, 10:15 PM IST
Premium- SEBI received two complaints against the Telegram channel in 2021 with the allegation that certain entities used the social media platform Telegram, to artificially inflate the stock prices and make illegal profits
The Securities Exchange Board of India (SEBI) released its final order on the matter of using the Telegram channel for stock recommendations. The market regulator imposed fines of more than 2.84 crores on the administrators of a Telegram channel named “@bullrun2017(BullRunInvestmentEducationalChannel)",which had more than 49,000 subscribers.
The heavy penalty is the amount prima facie alleged to be the proceeds unlawfully earned by the administrators of the Telegram channel. In a release, SEBI revealed that the three administrators of the channel, out of which two were brothers, used their trading accounts to first buy the shares of the concerned companies, followed by making buy recommendations with respect to those scrips through the Telegram channel. The administrators induced thousands of subscribers to deal in the concerned scrips.
“Eventually, after making such recommendations to the subscribers, Noticees used to sell the shares in the market accumulated by them in the first leg of the transaction for a profit. Further, investigation revealed that they had carried out the said modus operandi in different scrips on a routine basis during the investigation period," the SEBI release read.
For the fraudulent activities, the administrators of the Telegram channel used their personal trading account and the trading account of their other three family members.
The said Telegram channel allowed only one-way communication from the administrators of the channel who post messages while the subscribers can only view such messages. The market regulator also quoted the description of the Telegram channel which said, "We are team of 4 Research Analysts with combined experience of 40 years. All calls are for study purpose only. Taking any trade consultant your financial advisor. We are in the process of getting SEBI Research Analyst Registration."
SEBI received two complaints against the Telegram channel in 2021 with the allegation that certain entities used the social media platform Telegram, to artificially inflate the stock prices and make illegal profits.