Zerodha co-founder Nithin Kamath warned investors on October 20 against blindly following stock tips circulating on WhatsApp, Telegram, SMS, and social media, amid an Enforcement Directorate freeze of trading accounts holding around ₹200 crore linked to a pump-and-dump scheme involving two listed companies, according to livemint.com.
Kamath highlighted the persistence of stock market scams despite widespread financial information and digital tools. He cautioned that many investors continue to fall for tips shared through messaging platforms without verifying the credibility of the source or understanding the risks. Kamath wrote on X that relying on such tips is “probably the silliest way to lose money.” He also noted that pump-and-dump schemes could become more frequent as the market cycle progresses.
The warning underscores concerns about the growing influence of social media personalities promoting stocks and IPOs, which can mislead investors chasing quick profits. The Enforcement Directorate's action freezing accounts worth around ₹200 crore reflects ongoing regulatory efforts to curb such manipulative practices. Kamath’s advice to ask ChatGPT for stock information suggests a push toward using more reliable digital tools over unverified social media tips.
The Enforcement Directorate's freeze of ₹200 crore in trading accounts linked to the alleged pump-and-dump operation was reported this week, marking a significant regulatory intervention in combating stock manipulation through social media channels.