How to check unsolicited advice on stocks

KS Badri Narayanan Chennai | Updated on January 12, 2018 Published on June 16, 2017

unsolicited advice on stocks

SEBI should provide exclusive mobile number or space on its portal to register complaints

If you own a smartphone, it would be a big surprise if you don’t receive free share tips from unknown advisors.

“Multi-bagger Buy 2,000 shares of NSE-BSE Hubtown (Code 532799) buy above 150; SL 140; short-term target ₹180-190 expected ₹280 in one month,” says one message followed by “Buy 10,000 SFLINER (BSE Code 530867) at ₹41.10, intraday target 45.5, BTST 55, SL 45.70. 75+ in week.”

Another one reads “Buy 20,000 shares of Panafic (Code 538860) buy @6.47 SL 5.85, short-term target 10-14, expected ₹20 in one month.” “Upper Circuit call buy CTL BSE: 538476 at 15 short-term 10 days target 15”; Company declared 7.5 per cent dividend, FIIs and MFs buying,” touts another message.

These kinds of messages find their way frequently into the mobile phone inbox, whether or not the number is registered under the DND (Do Not Disturb) registry with the telecom operator. Rogue brokers/tipsters somehow manage to bypass those filters.

From fake identities

What is even more disturbing is that some of these messages are from fake identities that have similar-sounding names to big-name broking houses such as Kotak Securities, Emkay, Angel Broking, HDFC Securities and Motilal Oswal. Clearly, there are pump-and-dump operators at play, who would like to bid up obscure companies with poor fundamentals and allow current holders in the stock to exit at an inflated price.

So, how should one address these unwarranted messages? At the face value, one should simply ignore such messages.

SEBI, in December 2016, had issued an advisory on the subject saying that it had come to know that many entities have been luring investors through unsolicited calls/SMSs and assuring guaranteed profits on the trading tips provided by them and that “It is observed that this activity is carried out mostly by entities based in Madhya Pradesh and Gujarat.”

SEBI had cautioned investors to: “Deal with only SEBI-registered intermediaries and check their registration status on the SEBI website before availing the services; be wary of any misleading advertisements which solicit investments in securities market assuring guaranteed profits.”

SEBI’s advice is: “Take informed investment decision without being influenced by trading tips.”

Hard to identify

But without their complete identity at hand, it is not easy for investors to go to the SEBI site and check the registration of these brokers.

Instead, SEBI or the exchanges should have a provision on their websites in the form of a platform for investors to enter the phone numbers and IDs of such unscrupulous elements so that the regulator can initiate a probe against these intermediaries/brokers and, if found guilty, punish them.

The market regulator and intermediaries could also have a WhatsApp ID or exclusive mobile number where these messages and numbers could be forwarded in order to tighten the screws on such players.

Published on June 16, 2017

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor


This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.