Description

SEBI final order against 17 entities for manipulation of Unison Metals Ltd. shares through Telegram channel stock tips, involving net profit of ₹4.29 crore.

Summary

SEBI has issued a Final Order under Sections 11(1), 11(4), 11(4A), and 11B of the SEBI Act against 17 entities for orchestrating a market manipulation scheme in Unison Metals Ltd. (UML) shares. The scheme involved posting stock recommendation tips on Telegram channels, with 10 entities (Net Sellers/Profit Makers) profiting ₹4.29 crore by selling shares after recommendations caused price/volume spikes. Three entities operated/facilitated the Telegram channels, while four entities (including UML directors and promoters) enabled the scheme.

Key Points

  • 17 noticees divided into three categories: Net Sellers/Profit Makers (10 entities), Operators (3 entities), and Enablers (4 entities)
  • Total illicit profit: ₹4,29,80,725.70 earned by net sellers from advance information on stock recommendations
  • Operators ran Telegram channels posting stock tips to manipulate UML share prices and volumes
  • Enablers included UML directors (Noticee Nos. 14, 15, 16) and a related party who bridged connections between profit makers and operators
  • Profit sharing occurred through non-banking channels between net sellers and operators
  • Order reference: WTM/AS/ISD/ISD-SEC-6/32028/2025-26
  • Interim Ex Parte Order cum Show Cause Notice originally issued on July 31, 2024

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action applying existing provisions.

Compliance Requirements

  • Market participants must not engage in fraudulent or manipulative trading practices
  • Directors and promoters must not facilitate or abet market manipulation schemes
  • Stock recommendation services on social media platforms must comply with SEBI regulations
  • Entities must not trade on advance non-public information about planned market-moving activities
  • Profit sharing arrangements related to manipulative trading are prohibited

Violations Alleged

Net Sellers/Profit Makers (Noticee Nos. 1-10):

  • Section 12A clauses (a), (b), (c), and (e) of SEBI Act
  • Regulation 3 clauses (a), (b), (c), and (d) of PFUTP Regulations
  • Regulation 4(1) of PFUTP Regulations
  • Regulation 4(2) clauses (d) and (e) of PFUTP Regulations

Operators and Enablers:

  • Violations related to facilitating and enabling the manipulation scheme (specific violations detailed in full order)

Important Dates

  • July 31, 2024: Interim Ex Parte Order cum Show Cause Notice issued
  • February 2026: Final Order issued

Impact Assessment

Market Impact:

  • High - Demonstrates SEBI’s enhanced surveillance of social media-based manipulation schemes
  • Sends strong deterrent message against organized tip-based trading operations
  • Highlights risks of Telegram and social media channels for illegal stock recommendations

Investor Impact:

  • Protects retail investors from falling victim to coordinated pump-and-dump schemes
  • Warns investors against following unregistered stock tips on social media platforms

Regulatory Impact:

  • Strengthens SEBI’s enforcement framework against new-age manipulation techniques
  • Sets precedent for action against all participants in manipulation chains (beneficiaries, operators, and enablers)
  • Demonstrates cross-category accountability including company insiders who facilitate external manipulation

Impact Justification

Major enforcement action involving 17 entities in coordinated market manipulation scheme using social media channels, with significant profit of ₹4.29 crore, demonstrates SEBI's crackdown on illegal tip-based trading operations