Social Media and Stock Market Manipulation: The Emerging Threat of Insider Trading in India
Author - Rishit kumar; Co-author - Dr. Rajiv kumar Bhartiya
The ICFAI University, Dehradun (LLM)
rishitkumar9668@gmail.com
ABSTRACT
The stock market operates as a highly intricate financial ecosystem that typically requires years of focused study to fully understand. It depends on risk management strategies and fundamental theoretical methods to speculate on the fluctuations of stocks and cryptocurrencies. However, this domain is gradually becoming more accessible, breaking down traditional educational barriers. Technological advancements and the ease of entry, combined with the rapid spread of information through social networks, have led to an increasing number of individuals engaging in financial activities. What makes this shift transformative is that the very tools enhancing accessibility also shape how market trends develop. This paper examines the growing influence of social media in finance, highlighting how platforms like Twitter and Reddit have expanded access to information and market participation. It explores the role of social media in market manipulation, illustrated by events such as the wall street reddit’s meme-driven strategies that boosted GameStop’s stock prices. The study also looks at how influential figures, like Elon Musk, use their platforms to impact market movements. Furthermore, it addresses the spread of misinformation, as seen with Virgin Galactic’s stock volatility following a SpaceX incident and the confusion surrounding AGUA in the Mexican stock market. The paper also investigates social media’s effect on cryptocurrencies, noting how public figures’ statements can significantly influence the prices of Bitcoin and Doge-coin. In conclusion, it emphasizes the need to adapt to these shifts within the digital financial landscape.
KEY WORDS
Social media, Stock market, Insider trading, Cross agency collaboration, Investors trust, Information transparency
