SEBI Cracks Down on Alleged Social Media Stock Manipulation Scheme

Securities and Exchange Board of India (SEBI) has barred seven individuals from participating in the securities market for allegedly operating a coordinated pump-and-dump scheme through social media platforms and making unlawful gains of more than ₹20.25 crore.

In a 234-page interim order issued on May 22, the market regulator alleged that finfluencer Hemant Gupta along with his sons Rohan Gupta and Aniket Gupta acted as “operators” in the alleged scheme.

According to SEBI, the accused first accumulated positions in thinly traded SME stocks and subsequently circulated bullish recommendations about those stocks across social media channels to artificially inflate prices. After attracting retail investor interest and driving up stock values, they allegedly sold their holdings at a profit.

Apart from debarring the accused from the securities market, SEBI directed Hemant Gupta and his sons to immediately cease and desist from offering unregistered research analyst services or presenting themselves as research analysts without proper regulatory approval.

Pump-and-dump schemes typically involve artificially boosting the price of low-liquidity stocks through misleading or exaggerated recommendations before offloading holdings for gains, often causing significant losses to retail investors once prices collapse.

The case highlights increasing regulatory scrutiny over financial influencers and stock-related content on social media platforms as retail participation in equity markets continues to rise rapidly in India.