A WhatsApp group promoting stocks as potential multibaggers was part of an alleged pump-and-dump scheme that led the Enforcement Directorate to freeze trading accounts worth about Rs 200 crore. Zerodha co-founder Nithin Kamath has now pointed to the risks of relying on stock tips circulated through messaging apps and social media, suggesting that people check such messages with ChatGPT or Claude before acting on them.
“The next time you get a message promising easy money, just ask Claude or ChatGPT whether it's a good idea. It could save you a lot of money,” Kamath wrote in a post on X.
He said alleged pump-and-dump schemes were becoming more common, whether through WhatsApp groups or influencers promoting initial public offerings and stocks. He also described the stock market as a place where the warning that something that sounds too good to be true probably is has particular relevance.
ED Probe Traces Alleged Stock Promotion Campaign
The ED searched 29 premises across Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar on October 16 as part of a money laundering investigation involving R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd.
According to the agency, the two companies issued more than 3.5 crore shares and convertible warrants to selected individuals and entities between April 2023 and March 2024. A substantial portion of the money for these allotments came from a small group of connected individuals, firms and lenders.
The ED alleged that the share prices were subsequently pushed up while the holdings largely remained with the same group.
From the end of December 2025 to February 2026, WhatsApp groups using names such as “Multibagger Stocks” sent daily buy tips to retail investors. The groups used SIM cards registered in other people's names in Haryana and Mumbai but operated from Bhavnagar in Gujarat, the agency said.
The campaign coincided with a sharp rise in the number of buyers in the two stocks, which pushed their prices higher, according to the ED.
Trading Accounts Worth Rs 200 Crore Frozen
The agency said beneficiaries had acquired shares at low prices through preferential allotments before promoting the stocks through WhatsApp, X, SMS and other channels. It identified clusters of family-linked beneficiaries, including Affluence Gems, Kawa HUF and Komalay Consultancy, among others.
The ED alleged that the preferential allottees took advantage of the increased buying interest to sell part of their holdings to a larger number of investors.
During the searches, the agency seized documents, digital devices and records of share transactions and property. It also froze trading accounts worth about Rs 200 crore belonging to the individuals and connected entities.
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