A significant stock market scam has been uncovered in Ahmedabad, where nearly 4,000 investors have been deceived. The Securities and Exchange Board of India (SEBI) is now investigating this serious issue. This scam involved the manipulation of shares from companies that were almost defunct. Reports suggest that these companies were falsely revived to lure investors.
The scheme worked by falsely inflating the stock prices of low-value companies. Investors were misled into believing these stocks would rise significantly. Unfortunately, once prices surged, the fraudsters sold off their shares, leaving many investors with substantial losses.
To tackle this issue, SEBI has taken action. They have conducted search and seizure operations at various locations, recovering important evidence. This includes mobile phones and documents that may reveal more about how the scam was run.
SEBI confirmed the operations in a statement issued on June 27, stating that they had carried out searches earlier in the month. They highlighted that incriminating evidence was found during these searches.
Pump-and-dump scams are not new. They typically involve fraudsters promoting stocks to increase their prices artificially. Once they have sold their shares at high prices, the stock often crashes, leaving ordinary investors to bear the losses. SEBI has taken this case seriously and aims to prevent such scams in the future.
The regulator mentioned that around 15 to 20 shell companies were involved in this scheme. These companies were used to buy and sell shares to inflate their prices. SEBI is also monitoring certain online platforms, including Telegram channels, where these stocks were promoted by unregistered analysts.
The estimated value of this scam is around Rs 300 crores, which makes it one of the largest in SEBI’s history. The regulator has previously acted against several companies for similar manipulations, and this latest case seems to follow a familiar pattern of deception.
Investors are urged to be cautious and do thorough research before investing in stocks. The recent events highlight the importance of being vigilant in the financial markets. SEBI’s ongoing investigation is expected to reveal more details about those involved in the scam.
In conclusion, the pump-and-dump scam in Ahmedabad has raised serious concerns about investor safety in the stock market. SEBI’s actions show their commitment to tackling such fraudulent activities. Investors must remain informed and cautious to protect their investments in the future.
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