Sebi bars seven entities in social media stock recommendations, alleges Rs 58 crore gains

Synopsis

The market regulator Sebi barred seven individuals for allegedly generating Rs 58 crore in wrongful gains by using social media (including X) to disseminate stock recommendations. They allegedly traded ahead of their posts to profit from price movements in small and mid-cap stocks.

Capital markets regulator Sebi has passed an interim order against seven individuals for allegedly using social media platforms, including X, to influence retail investors and profit from trades in several small and mid-cap stocks. The interim order alleges that the group used stock recommendations posted through social media accounts to generate "wrongful gains" by trading ahead of public recommendations.

The regulator named Hemant Gupta, Rohan Gupta, Aniket Gupta, Sharon Gupta, Leana Gupta, Rajani Gupta and Purvangi Gupta in the matter. Sebi said its surveillance systems observed that certain X accounts were publishing posts which were in the nature of influencing public to invest in various scrips, especially stocks listed on SME platforms. The market regulator began examining the matter after noticing unusual trading patterns linked to the social media activity.

According to the order, Sebi conducted search and seizure operations between January 21 and January 24, 2026 after obtaining court approval. During the operation, electronic devices were seized and statements were recorded. The regulator examined trading activity between December 2023 and January 2026.

Sebi alleged that the group accumulated shares before posting recommendations on social media platforms and later sold those holdings after prices rose following retail investor participation. "The Noticees used social media platforms for disseminating stock recommendations and simultaneously traded in those securities for generating profits," the order said. The regulator said the group largely focused on low-liquidity stocks where social media activity could sharply influence price movement and trading volumes.

According to Sebi findings, the combined gross trade value of the seven entities rose sharply during the examination period. The order noted that total gross trade value increased from Rs 548.62 crore in the earlier period to Rs 1,023.40 crore during the examination period, representing an increase of 86%. Sebi also alleged that the total squared-off profits of the entities rose from Rs 17.06 crore to Rs 58.40 crore during the same period, marking a jump of 242%. The regulator said Rohan Gupta and Sharon Gupta were among the "biggest beneficiaries in value terms", with combined profits of around Rs 50.03 crore. The order includes multiple examples where trades were allegedly executed before stock recommendations were posted online. Sebi attached detailed trade data, timestamps of social media posts and subsequent price movements in several stocks including SME counters and low-float shares.

The regulator also expressed concern over the growing influence of unregulated stock tips and trading calls distributed through social media platforms. Retail participation in Indian equities has surged sharply over the last few years, leading to increasing regulatory scrutiny around finfluencers, Telegram channels, WhatsApp groups and social media-based stock recommendation ecosystems. The latest order comes amid Sebi broader crackdown on entities allegedly using digital platforms to manipulate stock prices or induce retail participation through misleading recommendations.

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