A big revelation has come to light for those investing in the stock market. The Securities and Exchange Board of India (SEBI) has busted an alleged pump-and-dump scam worth around ₹144 crore. The most important thing about this case was that the investigation was not limited to just bank accounts and trading records. SEBI exposed the entire network with the help of digital evidence like WhatsApp chats, airline tickets, hotel bookings, food delivery app orders, website records, domain history and SMS data. This case shows that it is no longer as easy for those who commit fraud in the stock market to get away as before.
A big network of 226 people came to light
According to SEBI’s 394-page investigation report, between 2017 and 2020, investors were attracted by showing fake rise in the shares of five companies. 226 institutions and people have been claimed to be involved in the investigation. In this case, the regulator has ordered to deposit back the amount of about ₹143.79 crore, impose a fine of about ₹47.8 crore and keep many accused away from the stock market for 4 to 7 years.
WhatsApp, flight tickets and food orders become important evidence
During investigation, the main accused denied any connection with some mobile numbers. After this SEBI examined the records of airline booking, hotel reservation and food delivery apps related to those numbers. From these digital records, an attempt was made to find out who was actually using the mobile numbers. WhatsApp chats and other online activities also played an important role in linking the accused.
Demand for shares increased by sending more than 2 crore SMS
SEBI’s investigation revealed that a large-scale bulk SMS campaign was run to woo investors. More than 2.1 crore SMS were sent just for the promotion of one share. Apart from this, messages to buy shares were sent to thousands of investors so that the demand for shares increased and there was a fake rise in prices.
Trading and money transactions were also thoroughly investigated
The regulator also closely examined the trading patterns. According to the report, activities like circular trading, synchronized trades and frequent changing of orders were done through multiple accounts to create a fake trading environment in the shares. After this, profits were earned by selling shares at increased prices. The investigation also tracked the entire chain of money transactions, which helped in reaching the ultimate beneficiaries.
Employees and contractors were also investigated
In this case, the role of employees and labor contractors of some companies also came under investigation. SEBI examined his bank account, demat account and income tax records. According to the report, after selling the shares, many people transferred the money to other accounts linked to them instead of keeping it themselves, which the investigating agency considered suspicious.
Also read- Big news for F&O traders! SEBI can bring long term contracts, the whole game of trading will change
