In one of its most extensive market manipulation investigations, the Securities and Exchange Board of India (Sebi) pieced together evidence from airline bookings, hotel stays, food delivery records, WhatsApp chats, telecom data and banking trails to crack an alleged Rs 144 crore pump-and-dump operation spanning five stocks.
The 394-page final order details how the market regulator stitched together digital footprints to identify the alleged mastermind behind the scheme and establish links between the entities involved.
Digital trail beyond stock market data
Unlike conventional insider trading or market manipulation probes that rely largely on trading patterns and fund flows, Sebi widened its investigation to include records from IndiGo, MakeMyTrip, Yahoo, Swiggy, Zomato, telecom operators, banks and hotels.
According to the order, the regulator cross-verified information received from these independent sources with data obtained from SMS aggregators and telecom service providers to identify the individual allegedly responsible for circulating misleading stock recommendations.
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The investigation also relied on WhatsApp conversations, call detail records (CDRs) and screenshots of chats with bulk SMS resellers to establish who operated the messaging campaigns.
Airline bookings and hotel records
Sebi examined flight bookings and hotel records to corroborate the identities of the persons behind multiple mobile numbers allegedly used in the operation.
The order notes that details obtained from airline and travel bookings, along with hotel records, were matched against other evidence to establish connections between the individuals under investigation.
The regulator also analysed booking information from MakeMyTrip and hotel stays as part of its effort to verify ownership and usage of various phone numbers.
Food delivery orders became evidence
Even food delivery apps formed part of Sebi's evidence.
The regulator examined records from Swiggy and Zomato, including registered names, delivery addresses and order histories linked to specific mobile numbers.
In one instance cited in the order, Sebi noted that a food order delivered to a hotel matched records showing that the alleged mastermind had stayed at the same property on that date. The regulator used this information to counter claims that the mobile numbers belonged to someone else.
WhatsApp chats and SMS campaigns
A key part of the investigation centred on the circulation of bulk SMSes carrying buy recommendations that allegedly impersonated well-known brokerage brands.
According to Sebi, WhatsApp chats between the accused and bulk SMS service providers, along with telecom records, helped establish responsibility for sending promotional messages and operating websites used to lure investors.
The regulator alleged that these messages were used to artificially inflate stock prices before connected entities exited their positions, a classic pump-and-dump strategy.
