SEBI Fines Scammers Who Used Bulk SMS To Trick People Into Buying Shares And Duped Them Of Crores

India has around 8 crore active retail investors who buy and sell shares, and a bulk of them rely on brokerages and stock tips to purchase stocks. This is why, when investors receives a recommendation from a reputed brokerage, they are likely to rely on it and can also be duped using such names. That's exactly what 15 people fined by the Securities and Exchange Board of India did, using bulk SMS and trading stocks among themselves to artificially inflate the price of shares that they held.

These 15 were among 49 entities who had been allotted preferential shares for Rs 10 in 2014, and used those stocks to rob investors of Rs 2.09 crore.

How they pulled it off

They would send out stock tips via texts in bulk from an ID named AX-ICISEC, which made the receiver think that it came from reputed firm ICICI Securities.

The scammers sent out the messages each time the value of their shares went down, and tricked hundreds of buyers to pick up those stocks.

With shares being purchased in large numbers, the value of the stock surged, hence delivering profits for the fraudsters.

Apart from this, the 15 people running the dubious scheme, also bought and sold shares among themselves, which created a perception that the scrip was in demand.

They traded stocks of Kapil Raj Finance between Januart and April 2018, and sent out messages in three batches for the pump and dump scam.

SEBI has passed an order to slap a fine of Rs 5 lakh to Rs 8 lakh against each of the 15 scammers.

Published on: Friday, June 16, 2023, 09:27 PM IST