Bangladesh police arrest Facebook share tipster
A Dhaka-based Facebook stocks tipster with over 10,000 followers has been arrested on charges of illegally manipulating Bangladesh's overheated stock exchange, police said Thursday.business Updated: Mar 04, 2010 15:01 IST
A Dhaka-based Facebook stocks tipster with over 10,000 followers has been arrested on charges of illegally manipulating Bangladesh's overheated stock exchange, police said Thursday.
Mahbub Sarwar, 26, a prolific blogger who provided online stock tips through the popular social networking site, will be charged with market manipulation, Mohammad Sohel, spokesman for the Rapid Action Battalion police force told AFP.
"His Facebook account has 3,000 members and he has a number of blogs... we believe around 10,000 or more people have been acting on his tips for the last few months," Sohel said.
"His tips could trick thousands of people into buying certain shares on certain days," he said, adding that Sarwar would also be charged with providing market advice without a license.
Regulators said they had been investigating Sarwar for months. Membership of his Facebook group costs up to 70 dollars a month and he would also charge for individual tips, police say.
He is also accused of running an unauthorised portfolio management services company -- advising clients on which investments to make -- for which he charged 20 percent of profits.
"He is not alone. There may be more like him, using the internet to trick investors," the executive director of the Security and Exchange Commission, A.B.M. Tariquzzaman, told AFP.
Bangladesh's bourse, one of Asia's smallest, is vulnerable to manipulation and regulators have struggled to stop a slew of online scams, publicly warning investors in January of a rogue Facebook group providing bogus tips.
Internet services were introduced in Bangladesh in 1996 and the number of users in Bangladesh is now more than 6 million, according to Internet Service Providers Association of Bangladesh.
Although nearly 40 percent of its population lives on less than a dollar a day, Dhaka's share market has been one of the best performers in the world with the main index doubling since the middle of last year.
Experts have described the Dhaka Stock Exchange as a "ticking bomb" as repeated attempts to cool the market's bull run this year failed. Tens of thousands of retail investors have poured in fresh funds every day.