Nithin Kamath, the founder and chief executive of brokerage Zerodha, has cautioned investors that fraudulent stock-tipping schemes are far from disappearing. His warning comes as India’s Enforcement Directorate (ED) has frozen accounts holding about Rs 200 crore in connection with alleged manipulation of this kind.
Writing on X, Kamath said the problem is still alive in 2026 and described falling for these schemes as one of the silliest ways to lose money in the market. He suggested that investors should expect more of them, not fewer, as the current market cycle moves forward. In his view, rising enthusiasm tends to attract both newcomers and opportunists.
The schemes he referred to are known as pump-and-dump operations. Typically, a group of people builds up a position in a little-known stock, then spreads upbeat messages to push up interest and prices. Once ordinary buyers pile in, the organisers sell at the higher price. The price then collapses, leaving followers with heavy losses.
According to Kamath, many of these alleged operations now run through WhatsApp groups, where members receive confident “tips” that appear to come from experts. Social media personalities who promote particular shares, as well as upcoming initial public offerings (IPOs), are also part of the picture. Because these messages arrive in private chats or from familiar online figures, they can feel more trustworthy than they deserve to be.
The ED’s decision to freeze accounts worth Rs 200 crore shows that regulators are paying attention. However, Kamath’s message was aimed at individuals: enforcement may come only after money has been lost.
The basic advice is simple. Be wary of unsolicited recommendations, especially those promising quick or guaranteed gains. Check whether the person offering advice is registered, do your own research on any company, and remember that if a tip is being shared widely, the people behind it are probably already planning to sell.