Echo

Bangladesh Police Arrest Facebook stock tipster  

Posted by Rezwan in , ,

I know many would raise their eyebrows reading this news:

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.
However this news has some anomalies which even a reputed news agency like AFP did not verify. I think the journalist who reported do not use Facebook - so it is unknown to him that there is no facility in Facebook to earn money from group subscriptions (what was the basis of the 70 dollar fact - how the money was realized?). There is an option of a secret group by choosing individual members, but that group do not appear in the search engine - so there is no question of influencing thousands by it.


While searching Facebook I found Mahbub Sarwar's account, whose nick name is Shoikot. He has a blog, where I see posting of some stock related news. In his blogs he states that he is a capital market investment analyst and he provides some value added service and monitoring for clients (for apparent fees).
Its a personal blog created to educate the capital market investors of Bangladesh and to share the blogger's personal views on different issues. Is Mission is to develop an educated and learned investors community. (source)
So in fact he is actually gathering stock exchange related news from online sources and sharing it with public. Now what has he done to deserve this arrest? How his tips could influence thousands of people with those 2nd hand data which is anyway available in the internet? If it is for his value added personal services - I have no comment. But why making Facebook and his blog the villain? He is just expanding his client base using social media (traditional brokers - take note).

He has 2697 friends and he has a Facebook page containing mainly feeds from his blog posts where some his 743 fans are sporadically asking "what can i buy tomorrow?" "what abt gp today????" etc.

Now the question is all of this is public. You and I can see those. How he has influenced some and not all of us? And by providing Market information to public whom has he hurt? The professional brokers? Is there a group trying to keep the information away from public?

According to the news:
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.
So an alert was on. If the public still falls for alleged bogus tips (for money or free?) then who is to blame? There are other Facebook group like Dhaka Stock Exchange who are providing stock related tips (its a public group - you can join and participate). So why Mahbub Sarwar only?

I think the authorities got the battle wrong. They need to bolster their online presence to protect the investors. They have got a static page with databases. But there are no news aggregators, no presence in the social networking sites, no interactivity with the potential investors. It must be noted that they do not have Bangla version of their site which can target a lot more audience.

I have seen a few efforts online to educate the Bangladeshi investors, like this blog post where an analyst writes how to minimize risk in trading. The authorities should stop seeing devil in the Internet and act wisely.

I think the arrest of Mahbub was the result of some personal rivalry. Any attempt to control public information is a direct violation of freedom of speech which is protected in our constitution. Today there is Mahbub and tomorrow there will be more people harnessing the power of social media to inform people (or to manipulate to some extent). If the authorities do not joint the bandwagon of social media, they will never win the battle.

This entry was posted on March 04, 2010 at Thursday, March 04, 2010 and is filed under , , . You can follow any responses to this entry through the comments feed .

2 comments

Anonymous  

Hello!

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Friday, March 05, 2010 3:33:00 PM
nurjhan  

i highly appreciate u Mr Rezwan.what have u written is absolutely right.but the fact is that many ppl think that Mr. Mahbub is a Gambler,but he isn't.shame on our print media! shame...those journalist SHAME...

Sunday, March 07, 2010 8:11:00 PM

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