The market regulator Sebi has cautioned investors against participating in fraudulent WhatsApp groups that disseminate stock advice. These groups employ 'astroturfing' tactics—false endorsements and profit claims—to create a misleading impression of reliability and attract contributors.
In an official statement, Sebi reported that some unregistered individuals are offering investment recommendations through private WhatsApp groups under the guise of free investor training. Operators of these scam communities often use foreign WhatsApp numbers, posing as market experts.
Sebi specified that to lend credibility to their messages, some participants, acting in conjunction with the organizers, publish false claims of profit and praise the 'expert.' This practice, known as astroturfing, creates the appearance of genuine support and encourages careless investors to follow this advice.
The regulator also highlighted a method used by such groups after law enforcement or regulatory bodies begin taking action against them. Sebi noted that participants are often contacted from new numbers and invited to join another group, while operators claim the previous group was blocked due to social media platform restrictions.
Sebi advised investors to exercise caution and avoid joining private WhatsApp groups managed by unknown individuals or those claiming to be stock market specialists, especially if they use foreign numbers. Investors are also recommended to ignore messages containing praise, profit claims, or trade confirmations posted by other members, as such posts may be orchestrated to create a deceptive impression.
The regulator emphasized that any messages about a group being suspended, closed, or blocked, followed by an invitation to join a new one, should be treated as a red flag. Furthermore, Sebi warned against opening accounts or transferring funds to trading platforms or applications recommended by such groups. The advisor also strongly recommended that investors not share details of their investment portfolios or trading accounts with the operators.
In conclusion, the regulator stated: 'Only trade with intermediaries registered with Sebi and use only authentic trading applications.' He added that investors can check the registration status of intermediaries on the official website. Sebi stressed that this statement is intended to warn investors about the risks associated with stock advice and trading calls circulating in such closed WhatsApp scam groups, urging them to remain vigilant when operating in the securities market.