SEBI: A warning issued by SEBI states that scams in WhatsApp groups involve fraudsters sharing tips on buying stocks without any authorisation, making false profit statements, and using forged endorsements. SEBI issued the warning on October 22, 2026. This warning discusses the manner in which the scammers try to win the trust of the investors by posing themselves as experts in the field of stocks and making them believe that all their trading tips are profitable.
As per the warning issued by SEBI, as reported by Onmanorama on October 23, certain unregistered people run WhatsApp groups on the pretext of providing investors with free training. In such groups, scammers can even use numbers belonging to overseas countries and send messages from different group members in order to give their tips more credibility. SEBI calls this kind of deception ‘astroturfing’.
What Is Astroturfing in the Stock Market?
It is important to note that astroturfing refers to manipulation through the fabrication of public support for someone, a certain product or service or advice. In regard to stock market scams, astroturfing can be defined as a series of messages intended to establish an experience or legitimacy of an unregistered stock-tip service provider.
For instance, the WhatsApp group’s administrator recommends one particular stock and claims that this recommendation will yield substantial profits. Other members of the group will then share their experiences and state that they got substantial profits from the advice. They may also compliment the market understanding of the administrator and share trading confirmations.
This will make new group members think that there are plenty of independent investors who confirmed the performance of the expert. It is noteworthy that SEBI has warned about the fact that some profit messages or endorsements could be created by those people working together with the administrators of the WhatsApp groups. The risk here lies in the fact that investors can take those messages for granted. Many positive messages do not indicate the reliability of a stock recommendation, the legality of its provider or actual profits.
How Fake WhatsApp Stock-Tip Groups Operate
- Pretending to Be Stock Market Experts
Scammers can identify themselves as expert traders, investment professionals, or even market experts. They can provide free educational information or give advice on buying stocks to get people interested in investing.
There have been reports of some groups using mobile phone numbers from abroad while portraying themselves as market experts. Just because a group uses a foreign mobile number, it doesn’t mean that the group is a scam; however, together with lack of verification of credentials, it makes you be careful. One should independently check whether the identity of people providing regulated investment services is verified.
- Sending Messages About Making Money
After one joins such a group, one can start receiving numerous messages saying that someone made money after trading based on the advice given. People in the group can send screenshots, praise administrators, or say that it was thanks to their advice that they earned something. This kind of information creates social pressure to trade based on the next advice provided by the group’s administrator.
- Making Use of Free Investor Education
These organisations might describe themselves as educational entities that offer knowledge about the market, tips for trading or stocks, or other advice on a daily basis and free of charge.
While proper educational sources might prove helpful for investors trying to learn more about financial markets, the very notion of education does not necessarily mean that the source will be reliable. Investors should be cautious when educational groups start recommending certain investments or sending money transfers and applications to unknown destinations.
The essential issue here is not whether a group is described as an educational one but whether the operators of the group and their activity are legitimate and authorised.
- Formation of New Groups Following the Ban
Another technique discussed by SEBI is related to forming replacement WhatsApp groups. Following the ban, members of such a group may get a message from a different number saying that the former group has been shut down due to risk management measures on the part of the social media platform.
Why These Scams Can Be Dangerous for Investors
Investment frauds within the stock market may utilise people’s greed as well as the fear of missing out. Once there are repeated assertions of the success of trades, individuals will react quickly without considering where the advice comes from.
The dangers include:
Financial damage: Investors will buy stocks through misleading advice as well as send money to a platform involved in fraud.
Disclosure of confidential information: Trading account details and investment may be shared revealing an investor to another round of frauds.
Misleading trading display: A platform recommended by the suspect group may be fake. Investors should be aware that what is displayed may not be actual money that can be withdrawn.
Pressure to react fast: Assertions of exclusivity as well as making profit each day may cause people to act without conducting research.
Funds recovery may become difficult: If the money goes into the account of unknown people or a fraudulent platform, it will be hard to recover the money. People should consider preventive measures and take action in case of fraud.
This does not prove that all WhatsApp investing groups are frauds. The concern is about the unverified operators, unapproved recommendations, misleading endorsements, and suspicious financial activities.
SEBI’s Advice: How Investors Can Protect Themselves
SEBI has cautioned investors to stay away from exclusive groups for stock tips operated by anonymous persons, especially those who claim to be experts in the market via international telephone numbers. The SEBI has also warned about opening an account in, sending money to, or discussing any investment details with platforms suggested by such groups.
These are the measures that an investor should take:
Check the Registration Status and Credentials
Before taking into consideration any individual or firm giving financial advice, it is important to verify their credentials via the official SEBI website.
Prior to accepting investment advice from any individual or using other regulated financial services offered by the person or organisation, ascertain their credentials via SEBI’s official website. Do not rely only on certificates, profile photographs, testimonies or statements made within a WhatsApp group. Information regarding SEBI is officially accessible via sebi.gov.in.
Download Authentic Trading Applications
Install trading apps via credible channels and verify the identity and registration status of the broker. Do not install an app merely because it has been recommended by a group administrator. Exercise caution if an unknown person redirects you to another platform and asks you to make deposits into it.
Do Not Provide Any Account Details
Do not provide any account passwords, OTPs, account access details or other credentials to unknown individuals. Be careful when asked for a screenshot of your account details or investments.
Think Twice About Guaranteed Profit Promises
Trading stocks carries risks. Guarantees of profit, higher-than-usual returns and consistent success in giving trading calls must be considered carefully. Perform your own due diligence before investing and consider the goals, risk appetite and potential for losses.
Leave Suspicious Groups
Groups that create fake testimonials, compel their members to trade, recommend unknown apps, and keep changing their numbers and groups after being banned should not be followed. It is wrong to pay money simply because other members say they have made profits.
What If You Have Engaged with a Suspicious Group?
In case you feel that stock tips given by a particular group are fraudulent, stop following their trading advice and stop sending money. Save all related messages, payments, references, and other information. In case any information is being shared by you, contact your broker or financial institution through its official customer support line and protect your account from any unauthorised access. Change your passwords as directed by your bank or institution.
In case you have suffered any loss of money due to cyber fraud in India, then immediately report it using the National Cyber Crime Reporting Portal located at cybercrime.gov.in or by calling the cybercrime hotline at 1930. Quick reporting might help in getting action taken, but there is no guarantee of money being recovered. Investors can use SEBI’s official website for more information regarding investors’ grievances and the grievance redressal procedure.