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“To make these calls look credible, certain members, acting in concert with the operators, post false claims of profit and praise the 'expert'. This practice, known as astroturfing, creates a false impression of genuine support and induces unsuspecting investors to act on the call,” says SEBI
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Mains Practice Question
Critically examine the role of astroturfing in manipulating investor decisions in the Indian securities market.
250 words
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SEBI has identified which practice as a major concern?
Astroturfing is a major concern for SEBI, as it creates a false impression of genuine support and induces unsuspecting investors to act on the call.
SEBI is responsible for protecting the interests of investors in which market?
SEBI is responsible for protecting the interests of investors in the Indian securities market, which includes stocks, bonds, and other financial instruments.
To make these calls look credible, certain members post false claims of what?
To make these calls look credible, certain members post false claims of profit and praise the 'expert'.
Consider the following statements regarding SEBI's Concerns: 1. SEBI has identified astroturfing as a major threat to investor confidence. 2. SEBI has issued warnings to investors about the dangers of astroturfing in WhatsApp groups. 3. SEBI has launched a crackdown on astroturfing in the Indian securities market. How many of the above statements are correct?
SEBI has indeed identified astroturfing as a major concern (Statement 1) and has issued warnings to investors about the dangers of astroturfing in WhatsApp groups (Statement 2). However, there is no evidence in the fact list that SEBI has launched a crackdown on astroturfing (Statement 3).
Consider the following two statements: Statement-I: SEBI has identified astroturfing as a major concern. Statement-II: Astroturfing creates a false impression of genuine support and induces unsuspecting investors to act on the call. Which one of the following is correct in respect of the above statements?
Statement 1 is true because SEBI has indeed identified astroturfing as a major concern. Statement 2 is also true and explains why SEBI has identified astroturfing as a major concern: it creates a false impression of genuine support and induces unsuspecting investors to act on the call.