The practice you’re describing, where financial influencers (finfluencers) are recruited to manipulate stock trends, is a form of market manipulation and is illegal. This unethical behavior can harm investors, distort market prices, and undermine market integrity.
Here’s how such a scheme could work, as described in your statement:
- Recruitment of Finfluencers: Companies or individuals recruit influential social media personalities (finfluencers) with a significant following and a “good engagement” rate.
- Microinfluencers: In addition to the main finfluencers, smaller-scale influencers or microinfluencers are enlisted to further promote the stock.
- Budget: The scheme is funded with a substantial budget, which can range from a little over Rs 50 lakh to over Rs 1 crore, depending on the scope and scale of the manipulation attempt.
The goal of such a scheme is to artificially inflate the price of a stock, attracting unsuspecting investors who are influenced by the social media buzz. Once the price has risen significantly, those behind the scheme may sell their shares for a profit, causing the stock price to drop and leading to losses for other investors.
Here are some steps to protect yourself:
- Verify the Source: Ensure that the individuals or platforms providing financial advice are reputable and registered with relevant regulatory authorities.
- Do Your Own Research: Always conduct your independent research before making investment decisions and avoid relying solely on social media influencers.
- Diversify Your Portfolio: Diversification can help spread risk and reduce your exposure to market manipulation schemes.
- Stay Informed: Keep up-to-date with financial news and market developments, and be skeptical of “get-rich-quick” promises.
- Report Suspicious Activity: If you come across any suspicious activity or believe you’ve encountered a market manipulation scheme, report it to the appropriate regulatory authorities.
