SEBI Bars Hemant Gupta, 6 Others in Alleged Social Media-Linked Stock Manipulation Case

The Securities and Exchange Board of India (SEBI) has issued an interim order against 7 individuals, including Hemant Gupta and members of his family, over alleged manipulation of SME-listed stocks through social media platforms, as per a Reuters report. 

Interim Restrictions Imposed by SEBI 

According to SEBI, the individuals allegedly circulated stock recommendations through Telegram, WhatsApp, and X in relation to shares of 82 small and medium enterprise-listed companies.  

The interim order named Gupta, his wife, former wife and four children. SEBI noted that the matter remains under investigation, and the observations recorded are based on preliminary findings available at this stage. 

The regulator has barred them from accessing the securities market until further orders. 

Details Mentioned in the Order 

As per the regulator’s findings, the accused allegedly purchased shares in selected SME-listed companies before posting “buy” recommendations on social media groups and online channels. 

SEBI stated in the order that after the recommendations were circulated, trading volumes and share prices in the identified stocks moved higher. The shares were then allegedly sold after the increase in prices. 

The regulator estimated the alleged unlawful gains at over ₹20 crore. SEBI added that the amount may change after detailed examination of trades and completion of the investigation process. 

The order further mentioned that a similar trading pattern was identified across 82 companies examined during the probe. SEBI has also directed the impounding of alleged unlawful gains identified in the interim findings. 

Regulatory Focus on Online Investment Content 

The case comes amid increased regulatory scrutiny of stock-related content shared on digital platforms. SEBI has tightened norms in recent years for finfluencers, research analysts and unregistered investment advisers. 

The regulator has repeatedly cautioned investors against acting on unverified stock tips circulated through messaging applications and social media groups.  

SME-listed stocks have also seen closer monitoring due to instances of sharp price movement and unusual trading activity. 

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Conclusion 

SEBI’s investigation into the alleged social media-linked stock manipulation case is ongoing. The regulator has also directed impounding of the alleged unlawful gains identified so far. 

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