New Delhi: Stock market participants are being strongly advised against trusting stock recommendations received through WhatsApp, Telegram, and other social media networks, particularly when those alerts promise rapid financial gains. Zerodha founder and CEO Nithin Kamath has cautioned that these types of schemes expose unsuspecting individuals to severe financial losses.
His cautionary remarks follow recent reports that the Enforcement Directorate froze trading accounts holding approximately Rs 200 crore in connection with an alleged WhatsApp-driven pump-and-dump operation targeting two listed companies.
In a message shared on social media, Kamath expressed astonishment that people continue to trust such operations. He warned that these fraudulent activities could multiply as the current market cycle develops.
Kamath highlighted the persistent reliance on unverified stock tips despite ongoing public awareness campaigns regarding the dangers. He noted that falling for such messaging remains an entirely preventable way to lose capital.
Promotional messages on chat apps frequently feature promises of extraordinary returns within brief timeframes, engineering a false sense of urgency. This tactic encourages buyers to acquire shares without examining company fundamentals or assessing underlying market hazards.
Targets are often lured by claims of possessing insider knowledge, assurances of guaranteed earnings, or endorsements from individuals posing as financial experts. In reality, these assertions form part of a coordinated effort to mislead buyers and artificially inflate asset valuations.
Kamath indicated that instances of market manipulation involving online messaging circles and digital influencers are likely to become more frequent. He pointed to an observable rise in schemes where influencers promote specific stocks or initial public offerings.
Within a typical pump-and-dump framework, orchestrators artificially drive up a security's price through false publicity or manufactured demand. Once valuations peak, the manipulators liquidate their shares, sticking retail participants who bought at elevated prices with heavy losses.
To help mitigate these risks, Kamath advised individuals to utilize artificial intelligence chatbots to evaluate suspicious financial prompts before executing trades, suggesting that a quick check could prevent substantial losses.
Market observers emphasize that participants should always verify details through official exchange filings, corporate disclosures, and regulatory notices, while maintaining skepticism toward anyone guaranteeing returns or urging immediate action.