Latest news with #ProhibitionofFraudulentandUnfairTradePractices
The Hindu
5 days ago
- Business
- The Hindu
SEBI cracks whip on market manipulators
Securities and Exchange Board of India (SEBI) conducted search and seizure operations in connection with pump and dump schemes in June 2025, according to a statement on June 27. 'It is hereby clarified that SEBI has conducted search and seizure operations at multiple locations in the month of June 2025 in connection with pump and dump in certain scrips and has seized incriminating evidence. Investigation in the matter is under progress,' the markets regulator said in a statement. Over the past month, SEBI had pulled up two cases on front running and market manipulation. One of them was Sanjiv Bhasin, a research analyst at IIFL Securities who had manipulated stocks which he recommended on television channels and had profited off them. Major stocks like Interglobe Aviation (Indigo Airlines) were manipulated using unpublished price sensitive information. The other being a pump and dump scheme in which prices of Sadhana Broadcast Ltd. and a few other stocks were pumped up by promoters and others with the help of social media and sold to more than 100 investors, significant of them being actor Arshad Warsi. SEBI had served interim orders against both of them asking them to disgorge the amount they had benefitted from this and banned them from securities market as per regulations. Pump and dump scam refers to a scheme when people take a position in stocks which are mostly SME or illiquid stocks, create a hype by recommending them to investors. Once the price of the stocks are high, they would sell them and bag the profit, leaving the investors will losses. It is violation according to Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations of SEBI.
Mint
24-06-2025
- Business
- Mint
Think twice before acting on TV stock tips: How front running cheats retail investors
Televised stock market advice along with viral telegram tips often lure innocent retail investors searching for quick equity market gains. Still, a darker concept of 'front running' has led to major enforcements by SEBI along with several strict actions to stop the plundering of retail investor money. The regulator has recently barred analysts, anchors, brokers, market participants and fund dealers for abusing their influence to rake in huge profits ahead of recommendations. Front running simply involves trading on advance, non-public information. This information can contain details about client orders or public stock tips to gain an unfair advantage of the common retail investors. Front running results in undermining market integrity and misleads investors. Furthermore, it is punishable under Regulations 3 and 4 of Prohibition of Fraudulent and Unfair Trade Practices i.e., PFUTP Regulations (2003) and Section 15HA of the SEBI Act, 1992. Now penalties under this legal provision include fines of up to ₹ 25 crores or three times the profits made along with trading bans and time based restrictions. Sanjiv Bhasin – IIFL stock tip scam (June 2025) Bhasin along with 11 others traded through affiliated entities, before publicly recommending stocks on leading media platforms such as Zee Business, CNBC Awaaz and Telegram. SEBI impounded him with ₹ 11.37 crore. The entire scam was carried out by using WhatsApp, phone, and trade records. Zee Business guest analysts – Kiran Jadhav & others (Feb 2024) Several experts tipped stocks after connected traders already bought in, making ₹ 7.5 crore in unlawful gains. SEBI froze assets and issued bans under PFUTP. This was another shocking case of cheating innocent retail investors and luring them into trades based on tips. Hemant Ghai – CNBC Awaaz anchor (Jan 2021) SEBI barred CNBC Awaaz anchor Hemant Ghai and his family for front-running. This scam involved buying stocks ahead of his on-air recommendations. They earned ₹ 6.1 crore illegally. This marked SEBI's first action against a TV anchor for such misconduct. Axis Mutual Fund case – Viresh Joshi & associates (Sept 2021–Mar 2022) SEBI barred Axis MF's ex-chief dealer Viresh Joshi and 20 others for front-running fund trades between Sept 2021 and Mar 2022. ₹ 30 crore in illegal gains was impounded, with accounts frozen and action taken under PFUTP regulations. IDBI Capital – Dedhia & Savla (May 2024) In this particular case, SEBI barred IDBI Capital's Gaurav Dedhia and his sister Kajal Savla for front-running client trades using internal deal information. A total of ₹ 1.67 crore was recovered, and both were fined for violating market integrity under PFUTP regulations. Now given the Axis Mutual Fund and IDBI Capital cases involve institutional front running i.e., a kind of practice where machinery of institutions was used to make unlawful gains. On the other hand, the cases related to Bhasin, Jadhav and Ghai are nothing but media linked manipulative front running. According to SEBI both are fraudulent market practices under the PFUTP and are explicitly classified as illegal offences. Therefore, taking into consideration the above cases carefully, you can stay safe from front running scams by following these simple steps diligently: Be wary of lucrative and buzzy stock tips on both television or Telegram. Check and confirm if the tipster is a registered investment adviser (check SEBI registry). Carefully cross check any sudden price jumps post recommendation. Depend only on independent research or verified brokerage reports. Report suspicious stock trades or timing inconsistencies to SEBI. Hence, by consistently reading, understanding facts and building knowledge of equity markets along with taking guidance from investment professionals you can keep yourself safe from front running scams. Disclaimer: This article is for informational purposes only and does not constitute investment, legal, or financial advice. All references to cases are based on publicly available SEBI records. Readers are encouraged to verify facts independently and consult a SEBI-registered investment adviser before acting on any stock recommendations.
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Business Standard
22-06-2025
- Business
- Business Standard
Sebi bans two from markets for 3 yrs; impounds illegal gains of ₹4.83 cr
Markets regulator Sebi has barred two individuals from the securities markets for three years and impounded illegal gains of over Rs 4.83 crore made by them for orchestrating a fraudulent scheme using out of the money (OTM) stock options to misappropriate funds from investors. Apart from the securities market ban, the regulator also slapped a penalty of Rs 25 lakh each on Shivprasad Pattiya and Alkesh Narware and directed them them to pay the fine within 45 days, Sebi said in the order passed on Friday. Further, Sebi directed Pattiya and Narware to disgorge unlawful gains worth Rs 4.83 crore with an interest of 12 per cent per annum jointly and severally from February 2022. In the final order, Sebi found that the front entities had opened the trading accounts under the instructions of the operator group (Shivprasad Pattiya and Alkesh Narware) and these trading accounts and bank accounts were under the control of the operator group. Sebi observed that the caller group had identified prospective investors (complainants) which had credit balance in their ledger and obtained their credentials in the name of Algo/software trades and the same were also under the control of the Shivprasad Pattiya and Alkesh Narware. The trades executed through the mobile in the accounts of the complainants and the front entities were also under the control of the Pattiya and Narware, Sebi said. "...it is established that the entire fraudulent scheme is attributable solely and squarely to the noticees (operator group) and they were the controlling minds and beneficiaries of the fraudulent arrangement. "The acts of the noticee amounts to manipulative, deceptive device and artifice to defraud while dealing in securities," Sebi's Quasi Judicial Authority N Murugan said in the order. Pattiya and Narware were found to have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules. The order came after the Securities and Exchange Board of India (Sebi) received alerts on suspicious trades in illiquid 'Out of the Money' stock options with unusual price variations. NSE also got complaints from investors who suffered losses after sharing trading credentials for Algo-based trading via WhatsApp groups. Thereafter, Sebi conducted a probe to look into the role of a group of entities led Shivprasad Pattiya and Alkesh Narware allegedly misused online trading kits, promised guaranteed returns, and executed manipulative trades. The investigation covered the period from January 2021 to February 2022.
Mint
18-06-2025
- Business
- Mint
Mint Explainer: How Sebi uncovered Sanjiv Bhasin's alleged stock manipulation scheme
The Securities and Exchange Bureau of India (Sebi) has passed an ex-parte interim order against Sanjiv Bhasin and 11 others, alleging they used stock tips to generate an estimated ₹11.37 crore in profits at the expense of retail investors. The order restrains the accused from accessing the securities market and impounds suspected unlawful gains. An ex-parte interim order by Sebi is a temporary order that's issued without hearing the other party to prevent potential harm to investors or the securities market. These orders are usually issued during investigations or inquiries to prevent further mischief or protect the interests of investors. Mint explains what the order says, how Sebi unearthed the scheme, and what it means for investors. Who is Sanjiv Bhasin and why is he under Sebi's scanner? Sanjiv Bhasin is a well-known market expert who frequently appears on business news channels such as Zee Business, ET Now and CNBC Awaaz, offering stock tips and investment advice. He is also active on IIFL's Telegram channel and often introduced as 'director, IIFL' during media appearances. Also read: Sebi's new fee platform aims to protect investors. But not many have taken to it However, Sebi's 149-page interim order cum show cause notice dated 14 June paints a different picture. It alleges that Bhasin exploited his media visibility to push stock recommendations that served the financial interests of entities linked to him, rather than those of the retail investors who acted on his advice. What does Sebi allege? According to Sebi, Bhasin and a group of associates engaged in a "pump and dump" scheme. Here's how it allegedly worked: This pattern, repeated across multiple trades, has been described by Sebi as a violation of the Sebi Act and the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations. How did Sebi discover the alleged scheme? Sebi began its investigation after receiving three complaints in September and October 2023. The complaints alleged that certain entities were engaging in manipulative trading practices through televised stock recommendations. After its preliminary findings, Sebi appointed an investigating authority. In June 2024 it secured search-and-seizure permission from a court and conducted operations at several premises linked to the accused. During these operations the regulator seized electronic devices, trading records and bank statements, and recorded sworn testimonies. What kind of evidence did Sebi gather? The order cites a range of evidence that supports Sebi's allegations. Call data records showed frequent communication between Bhasin and RRB Master Securities' dealers, especially around the timing of trades. WhatsApp chats indicated coordination between Bhasin, dealers and other intermediaries, including discussions about who would place trades in his absence. Trade logs and order data revealed a consistent pattern. Shares were bought just ahead of public recommendations and sold shortly after. Screenshots of order confirmations were shared with Bhasin, showing real-time updates of the trades. Statements under oath allegedly confirmed Bhasin's role in directing trades, with his cousin Lalit Bhasin authorising him to operate accounts held by Venus and Gemini Portfolios. Sebi also mapped a complex network of cross-shareholdings among Venus, Gemini, Leo, and HB Stockholdings—all connected through family and business ties. How was the trading pattern executed? The trades followed a repeatable structure. Stocks were accumulated in the accounts of Venus, Gemini, and HB Stockholdings via broker RRB Master Securities. Bhasin then issued buy recommendations for the same stocks on TV or Telegram. The media push led to short-lived rallies in price and volume, during which the entities sold the stocks, often within minutes. Bhasin allegedly remained in close contact with the dealers executing these trades. Also read: Sebi engages with venture capital funds directly to smoothen transition to AIF This pattern was documented across several stocks, including L&T Technology Services, Parag Milk Foods, InterGlobe Aviation (Indigo), SAIL, and Godrej Consumer Products. Who are the other individuals and entities named in the order? The order names 12 noticees: 'guest expert' Sanjiv Bhasin, 'enablers' Lalit Bhasin, Ashish Kapur, and RRB Master Securities, 'dealers and insiders' Rajiv Kapoor, Jagat Singh and Praveen Gupta, and 'profit-making entities' Venus Portfolios, Gemini Portfolios, HB Stockholdings, Leo Portfolios, and Babita Gupta (wife of Praveen Gupta). Sebi alleges that these entities operated in coordination, with trades placed on Bhasin's instructions and profits distributed across multiple accounts. What action has Sebi taken? It has restrained all 12 noticees from buying, selling or dealing in securities, directly or indirectly. Bank and demat accounts have been frozen to the extent of the allegedly illegal gains. The order also serves as a show-cause notice, requiring the accused to explain why they should not face further action under the Sebi Act. What are 'unlawful gains' and why were they impounded? 'Unlawful gains' are profits allegedly earned through deceptive or manipulative means. Sebi estimates that the accused made a total of ₹11.37 crore through trades placed just before and exited just after public stock recommendations. The funds have been impounded to prevent them from being moved or hidden during the investigation. Sebi notes that impounding such gains is essential to protect investors and ensure the efficacy of its probe. What happens next? This is a preliminary order. The noticees have been given an opportunity to respond and defend themselves. Sebi will issue final directions after reviewing their replies and completing its investigation. In the meantime, the accused have the right to challenge the order before the Securities Appellate Tribunal (SAT). Why does this case matter to investors? Lawyers said the Sebi order reveals how retail investors can be exploited through coordinated, media-based manipulation. They explained that retail investors who acted on Bhasin's tips effectively served as exit liquidity. 'For investors, this is a wake-up call: always check if the advisor is Sebi-registered, scrutinise conflicts of interest, and avoid acting blindly on televised or social media recommendations," said Nirali Mehta, partner at Mindspright Legal. Also read | Mint Explainer: Why has Sebi barred Arshad Warsi from markets again? Mehta added that for the media, the case raises the bar on due diligence, and that platforms must now monitor expert disclosures, maintain records, and be alert to patterns suggesting misuse of the reach they provide. Mehta also said that even though Sebi has not named IIFL Securities as a violator, the case has reputational and regulatory implications for the firm. 'The firm has since clarified that Bhasin was not a director and had no board role. Still, Sebi's findings may prompt closer scrutiny of how brokerages manage affiliations with public commentators and could lead to stricter internal controls on compliance, communication and conflict disclosures," she said.
Time of India
30-05-2025
- Business
- Time of India
Sebi Market Ban: Sebi Extends Ban on LS Industries Amid Fraud Allegations, ET LegalWorld
Sebi on Friday said LS Industries, its promoter, and four others will remain barred from the securities markets till the outcome of a probe following allegations of fraudulent activities and stock price manipulation. Profound Finance (promoter of LS Industries), Jahangir Panikkaveettil Perumbarambathu, a Dubai-based NRI public shareholder of LS Industries, Suresh Goyal, Alka Sahni, Shashi Kant Sahni HUF have also been prohibited from the markets. "...hereby confirm the directions issued vide the interim order dated February 11, 2025," Sebi's whole-time member Ashwani Bhatia said in the confirmatory order. Advt Advt The markets watchdog also said the timeline to complete the investigation in this matter is extended to November 15 and the entities are directed to cooperate with Sebi's probe in the right February this year, Sebi had passed an interim order and restrained LS Industries, Profound Finance and four others from the securities markets following allegations of fraudulent activities and stock price had also directed Perumbarambathu to impound unlawful gains of Rs 1.14 crore from the sale of shares as part of a prima facie fraudulent matter pertains to LS Industries and its key associates were involved in artificially inflating the company's share price despite negligible revenue and financial the interim order, Sebi noted that LS Industries reported negligible revenue in the last three financial years (FY22-FY24) and first three quarters of FY25, which indicated that the company was not doing any business during this poor financials, the share price of LSIL rose by over 10 times from Rs 22.50 to a high of Rs 267.50 between July 23, 2024 and September 27, 2024, with the company reaching a peak market capitalisation of about Rs 22,700 sudden price movement in the scrip without any meaningful change in fundamentals, the dubious transfer of shares to Perumbarambathu, and the suspicious trading patterns of certain entities came under the prima facie appeared that the entities were part of a manipulative scheme designed to defraud investors and allegedly violated the provisions of PFUTP ( Prohibition of Fraudulent and Unfair Trade Practices ) rules. Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETLegalWorld App Get Realtime updates Save your favourite articles Scan to download App
