Need some advice from ppl with financial expertise
I received a message from a business that their stock recommendation had doubled in less than a year. Out of curiosity, I replied asking for more information.
I received a call from them today, stating that they have a stock recommendation ready with market research, which will be sent to me on Monday. Once I make an investment with my stock brokerage, I just have to inform them about my investment with a screenshot. They are expecting me to pay them 10% of the profit I earn after a few months of holding the stock. I said okay, but the skeptic in me is telling me that this is a scam, a 'pump and dump' scheme.
Now I am going to do my due diligence on the stock recommendation, but is it legal? Will I be breaking any SEBI (Securities and Exchange Board of India) rules by investing based on recommendations from businesses like these? How can I avoid being part of pump and dump schemes even after doing my due diligence on stock?
Any advice is appreciated.
Just think logically - If they are so sure about their money multiplier stocks, why aren’t they focusing entirely on making money entirely by stocks? 99% of such schemes are pump & dump. The operating model here is - They make a buy/sell order and influence others to take reverse positions, thus making a secure win every time.
You won’t be doing anything illegal by making purchases using suggestions.
This^. There's a high likelihood of losing money in pump and dump schemes.
legal and dumb.
Many have burnt their hard earned money in such schemes. Common trick to avoid Sebi action is to share tips with disclaimer ' For educational purpose only'. Don't fall into such traps. You never know what all data you might end up sharing once clicking on link.
Thank you, I might be sharing my order details from brokerage with the screenshot.
It is not illegal to invest on the basis of some recommendation. You should simply avoid this or any similar scheme .