4 people fined for creating deceptive videos about GG Engineering stock, engaging in spoofing

In a move against fraudulent practices in the market, the Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 50 lakh on four individuals involved in manipulative activities concerning GG Engineering Ltd (GGENG). The penalties are to be collectively paid by Manish Mishra, Sunil Bhandari, Rekha Bhandari, and Anshu Mishra for their deceptive trading tactics coupled with the strategic use of social media influence, as detailed in an order issued by Adjudicating Officer Amit Kapoor.

The investigation revealed that the group orchestrated a complex scheme to deceive the market by uploading false and misleading videos on YouTube channels to entice investors into acquiring GGENG securities. Furthermore, Rekha Bhandari and Sunil Bhandari partook in order spoofing to create a false impression of trading activities in GGENG shares. These actions violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations, according to the regulator.

The enforcement order came after SEBI conducted a thorough examination of GG Engineering Ltd’s stocks, finding that the implicated individuals had breached various market norms. Subsequently, a show-cause notice was issued to address the alleged violations on February 13, 2025.

In separate enforcement actions, three other entities were fined a total of Rs 16 lakh for engaging in non-genuine trades involving illiquid stock options at the Bombay Stock Exchange (BSE). The investigation uncovered a pattern of trade reversals in BSE stock options, which artificially inflated trading volumes. SEbi’s scrutiny of certain entities’ trading activities in illiquid stock options led to these enforcement measures.

Previously, in a significant enforcement move, SEBI ordered the forfeiture of Rs 546.2 crore from Avadhut Sathe Trading Academy and Avadhut Sathe, who were also banned from the market. These entities were accused of offering unregistered investment advisory and research analyst services and misleading investors with false promises of high returns based on stock market education, without the necessary registration.

The market regulator emphasized the importance of compliance with securities laws, particularly for educational activities in the financial domain. In its 125-page order, SEBI highlighted how Avadhut Sathe Trading Academy and Avadhut Sathe misrepresented profitable trades of course participants and investors to solicit funds while operating without the proper regulatory approvals.

The entities were found to propagate misleading information through social media to attract investors by portraying unrealistic gains from stock market activities. Despite claiming expertise and profitability in trading, the analysis by SEBI revealed that all trainers, participants, and investors associated with these entities suffered losses in the net. This underscores the necessity for adherence to regulations and transparency in all market-related activities to protect investors and maintain the integrity of the financial markets.