SEBI Bans 135 Entities From Market What is Bulk SMS Scam?

Well, allegedly, these entities have been fond of circulating “buy suggestions” in the scripts of these companies by means of SMS messages, text messages, investor websites, etc. This has led to the Rapid increase in price and volume of securities of companies.

Not only that, SEBI also imposed a fine of Rs 126 crores on these entities. SEBI is keen to take disciplinary action against influencers and entities that manipulate stock prices of companies by issuing recommendations on various social media channels to the investors.

Mass text message scam – EXPLAIN

An investigation has been initiated by the market regulator into the trading stocks of small-cap companies, namely 7NR Retail lTD., GBL Industries Ltd., Mauria Udyog Ltd., Vishal Fabrics Ltd. and Darjeeling Ropeway Company Ltd. Five small-cap companies have been executed after seeing trading volumes and stock prices surge unexpectedly.

SEBI has found in its investigation that there are definitely some clear similarities in the trading pattern that these five scrips followed. One similarity is that the “buy recommendations” for all five scripts are largely circulated via bulk SMS messages. Several websites were also created to suggest buying all five stocks, with the exception of Vishal Fabrics Ltd.

Additionally, another observation made is that the SMS circulation time is consistent with the increase in the price and volume of the companies’ shares. However, it is worth noting that in the case of Darjeeling Ropeway, price increases remained controlled and only volumes increased. This is due to certain specific supervisory actions imposed by the stock exchange on the scrip.

During the investigation, SEBI observed that certain identified entities allegedly committed various fraudulent acts leading to abnormal increase in the price and volume of shares of the above-mentioned five companies.

The regulator observed that a total of 135 entities were actually involved in stock manipulation activities. These companies mistakenly purchased Rs 126 crores due to engaging in illegal activities. SEBI subsequently banned these entities from accessing the stock market.

Not to be missed, the market regulator has issued notices to 226 entities, which includes many mule accounts. It also hints at a probable need for a total split of Rs 143.79 crores from 226 entities.

Categories: Optical Illusion

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