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Central investigative agency Enforcement Directorate (ED) has taken a major action to crack down on cases of fraud and illegal earnings in the Indian stock market. ED’s Mumbai Zonal Office-I has conducted simultaneous raids on a total of 29 locations in 6 major cities of the country on 16 October 2026 in a serious case of alleged stock manipulation and money laundering. This high-profile action pertains to stock manipulation of two listed companies—M/s RM Drip and Sprinklers Systems Ltd and M/s R&B Denims Ltd, causing huge financial losses to over one lakh small and retail investors.
ED’s big raid in 6 cities of Maharashtra and Gujarat
The Enforcement Directorate (ED) teams have taken this comprehensive action under the legal provisions under the Prevention of Money Laundering Act (PMLA), 2002. Major cities of Maharashtra are among the 6 cities which have been raided simultaneously. Mumbai and Nashik along with Gujarat Ahmedabad, Gandhinagar, Surat and Bhavnagar Are included.
The raid conducted by the investigating agency included the corporate offices of both the companies, luxurious residences of their promoters, locations of select people who acquired huge amounts of shares at low prices, stock-broking firms, finance companies and operators of WhatsApp groups allegedly promoting stocks. During the search, ED has seized many important digital devices, concrete records of share transactions, objectionable documents and property papers, which are being thoroughly investigated.
The game ranges from allotment of shares to artificially increasing the price.
A very shocking revelation has come to light in the initial investigation of ED. According to the investigating agency, between April 2023 and March 2024, these two companies had issued more than 3.5 crore shares and convertible warrants to selected individuals and institutions.
The investigation revealed that a large sum of money paid for these shares came from a limited and closely linked group of companies, individuals and lenders. After this, as part of a well-planned conspiracy, the prices of shares of both the companies were artificially raised continuously in the coming months, while most of the shares remained safe with the same selected people so that a big game could be played in the market.
Retail investors trapped through WhatsApp groups like ‘Multibagger Stocks’
The most dangerous aspect of this entire scam was that social media and messaging apps were used to trap common and innocent investors. According to ED investigation, between the end of December 2025 and February 2026 Multibagger Stocks For example, through WhatsApp community groups with attractive names, huge tips and false claims were being sent daily to buy shares of these two companies.
Through these groups, small and retail investors were deceived that these shares would make them rich overnight. Surprisingly, to operate these WhatsApp groups, fake SIM cards were purchased in the names of other unknown people in Haryana and Mumbai, whereas the actual operation of this entire network was being done from Bhavnagar, Gujarat. Under the influence of these attractive messages, the number of buyers in both the shares increased from around 3,400 to more than one lakh overnight.
Lower circuit came in shares as soon as WhatsApp group was deleted, investors got a big shock
This entire fraud was exposed when on 25 February 2026, all the WhatsApp groups through which shares were being promoted were suddenly deleted overnight. As soon as the groups were closed, there was an earthquake in the shares of both the companies and they came straight to the lower circuit. Within a few days, there was a huge decline of about 70 percent in the prices of these shares.
More than one lakh small and retail investors were badly trapped due to this well-planned scam. They could not even sell their shares amid falling prices, resulting in the loss of their life savings. At present, the ED is deeply investigating which big financial players and masterminds are behind this entire conspiracy, and more big revelations are expected in this case soon.