The Securities and Exchange Board of India (SEBI) has issued a warning to investors regarding fraudulent WhatsApp groups distributing unauthorised stock recommendations and misleading trading advice. The regulator cautioned that individuals posing as market experts are using fake profit claims to gain investors’ trust and influence their trading decisions.
According to SEBI, operators of these invitation-only groups often use international mobile numbers and promote their services under the pretext of providing free investment education. Some participants allegedly post fabricated profit screenshots, trading success stories and favourable comments to create a false impression of credibility, a deceptive practice known as astroturfing.
SEBI also highlighted that operators may establish new WhatsApp groups after their existing groups are suspended or banned. Investors could receive messages claiming that a previous group was restricted by a social media platform, followed by invitations to join replacement groups offering daily stock tips and trading recommendations.
The regulator has advised investors to avoid joining suspicious groups managed by unknown individuals and to exercise caution before trusting profit claims or trade confirmations shared online. Investors have also been warned against using trading applications recommended through such groups, transferring funds to unverified platforms, or disclosing trading account credentials and investment details.
SEBI has reiterated the importance of dealing exclusively with SEBI-registered intermediaries and verifying the authenticity of trading platforms through official regulatory resources. The advisory aims to improve investor awareness and reduce the risk of financial losses arising from fraudulent stock recommendations and unauthorised trading activities. CASansaar
Source: CA Sansaar