Pump And Dump in Indian Share Market

SEBI (Securities and exchange board of India) has banned some of the individuals and firms including Arshad Warsi and his wife because they were part of the pump and dump scheme. In 2022 mid the two shares namely Sadhna Broadcast Ltd and Sharpline Broadcast Ltd.

PC: Pixabay.com

So how it happened that first the promoters and other high net individuals who have shares of these companies created misleading and false videos on YouTube saying that these companies will be the future and how they will be bought by Adani and other things. And they started pumping the money to these shares.

So the official pump has started. And then the retail investors seen that videos because of the heavy promotion and thus people started buying that shares. And in no time the shares has given around 5x to 7x returns. This is when the dump has started where the promoters and other people have started offloading their shares and in no time the shares value reached where it began. So this is how the pump and dump game has been played in the stock market.

When SEBI has investigated the whole matter they found out some promoters and some individuals have taken part of this scam and they banned them from the market. I feel just banning is not enough, they should also give a penalty because otherwise they will do the same using others account too.

To be honest it might not be new but I have never heard about this before. I though, pump and dump only happens in the crypto world but I was wrong. So the retail investors should now be extra careful when they will be taking the stock advice online because they might get the victim of this scam.

So that's why it's always good to do your own research before buying any shares or any investment.

Posted Using LeoFinance ^Beta