The perils of social investing

A couple of days back, SEBI issued a press release detailing its crackdown on social media-based market manipulation schemes. In this episode, SEBI raided a number of premises and made seizures that revealed an impressively large social media operation. This gang was operating nine Telegram channels with a total of 5 million subscribers. The modus operandi of the operators was that they would buy large positions in some stocks, then use their following on social media to trigger large-scale buying and when the prices shot up, they would unload the stocks at a large profit. There's nothing new about this activity - it's as old as the market itself. Buy something, pass around some 'tips' and spread rumours to boost the price. What has changed over the years is the mode of communication. The reach and the speed are much hi