The Enforcement Directorate has searched 29 locations in a probe involving stock price manipulation at RM Drip and Sprinklers Systems and R&B Denims. Investigators allege that a coordinated pump-and-dump scheme misled over 100,000 retail investors, leading to a 70% collapse in share value. The agency is investigating potential money laundering violations tied to these activities.
The Enforcement Directorate (ED) has launched a nationwide investigation into a suspected stock market manipulation syndicate involving RM Drip and Sprinklers Systems and R&B Denims. The operation, which spanned 29 locations across six cities, focused on alleged activities that misled thousands of retail investors and led to significant financial losses.
Investigators allege that the companies were part of a pump-and-dump scheme. Between April 2023 and March 2024, the entities reportedly issued 35 million shares and convertible warrants to a collusive network. This distribution created the foundation for manipulating share prices, which was then accelerated through coordinated campaigns on social media and messaging platforms.
How the Scheme Operated
According to findings by the agency, the syndicate operated groups on messaging apps often branded as 'Multibagger Stocks' to drive retail interest. These groups were managed using fraudulent SIM registrations. Between December 2025 and February 2026, these platforms were used to lure over 100,000 retail investors into purchasing the shares at inflated prices. This surge in retail buying provided the liquidity needed for the original stakeholders to offload their holdings.
In February 2026, the artificial demand abruptly ended. The operators deleted the messaging groups, which triggered an immediate panic among retail holders. Consequently, the share prices of both RM Drip and Sprinklers Systems and R&B Denims fell by approximately 70 percent, leaving investors with shares that had little to no liquidity.
Regulatory Focus and Investor Risk
The ED is conducting this probe under the Prevention of Money Laundering Act (PMLA). During the searches, officials seized digital devices and property records to trace the flow of funds and identify the primary beneficiaries of the orchestrated crash.
For investors, this case serves as a warning regarding the risks of following unverified stock tips on social media or private messaging groups. Such platforms are often used to create false hype for the benefit of a few operators. Authorities are continuing to analyze financial records to determine the full extent of the manipulation and the involvement of the entities concerned. The next key updates will likely come from further findings by the ED as the investigation into the flow of funds progresses.