Investing in stocks? Dump social media, seek advice from regulated entities

Relying on social media platforms puts you at risk of falling prey to pump-and-dump schemes

The Securities and Exchange Board of India (Sebi) recently uncovered a scheme involving 31 entities who allegedly conspired to ‘pump-and-dump’ stocks. By spreading false information through YouTube channels, the manipulators were able to artificially inflate the prices of two micro-cap firms, Sadhna Broadcast and Sharpline Broadcast, only to sell their holdings at a profit once prices had risen.

Modus operandi

The individual or group behind such a scheme initiates it by purchasing a large quantity of stocks in a relatively unknown company trading at a low price. These insiders then collaborate to create artificial hype and interest in that stock. “To do