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The market regulator, The Securities and Exchange Board of India (Sebi), has asked the support of Telecom Regulatory Authority of India (TRAI) to help them act against the malpractice of fake investment advices which are sent to the people by unknown entities. The legal news India confirms that Sebi has lately requested TRAI to develop a special software which can curb such mobile messages and the investors can be saved from misleading messages.
These unknown entities claim to be a part of some leading Indian brokering houses like Motilal Oswal and HDFC Securities. But these broking houses have denied all the allegations and have stated clearly that they are not the ones who have been sending these messages. These broking firms claim that some unknown entities are using their names to their advantage. The broking firms had raised a complaint against these fake messages, seeking an action from the board. The broking houses had also raised a similar complaint with the Mumbai police cyber-crime cell as well.
Contemplating on the seriousness of this issue, Sebi wants TRAI to develop a software that can scan some chosen keywords and then they can further decide whether to broadcast the message or not. The board strictly wishes to find out how such misleading and fake news related to the stock market is circulating without any authorization.
The share market news also reveals that the board has had a discussion with the cyber cell that is responsible for crime investigation under the economic offence wing of Mumbai Police and has thought what can be done about this issue. The cyber cell spokesperson has said that they are trying to find the location of the sender of the messages and they also said that the software used by them to generate these messages is quite complicated. But they hope to reach the defaulters soon as their expert team is working on it.
The fake messages that the phone users have been receiving is regarding buying shares of a penny stock, the entry price, stop loss, trade quantity, the target price and the holding period. Some of the stock operators give a reason too like the company is going to receive a big order from a MNC or it is on the verge of being acquired by a well-known firm. These messages have been successful in trapping some investors because the phone subscribers think that these messages are being sent by top broking companies and hence are genuine. One of the securities head believes that the organizations who send these messages are mostly promoters of substandard companies who do not have a good trading volume. While the rulebook of Sebi says that only the registered investment advisors and research analysts can give advices that are related to investment.
The same thing has also happened in past when this kind of unauthorized activity had happened. For this reason, the regulator had always warned investors through electronic broadcasting platforms to not fall in prey of such messages.
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