SEBI Takes Action Against Market Manipulation; Experts Misuse TV Stock Tips for Illegal Profits

SEBI has taken decisive action against market manipulation, uncovering a scheme where experts were using TV stock tips for illegal gains. The regulatory body barred Sanjiv Bhasin, a former director at IIFL Securities, along with 11 others, from the securities market for allegedly participating in front-running tactics that resulted in illicit profits of Rs 11.37 crore. It was observed that Bhasin was taking advantage of his on-air endorsements to artificially inflate stock prices, allowing him to sell off shares at inflated prices while unsuspecting investors suffered losses.

The Securities and Exchange Board of India (SEBI) issued an interim order against Sanjiv Bhasin, citing his involvement in a front-running scam. This operation involved manipulating stock prices through coordinated efforts across various business media channels. SEBI highlighted that this was a classic example of a pump-and-dump strategy, where media influence was used to mislead retail investors.

The allegations against Bhasin revolve around his suspicious trading activities in specific stocks that he later recommended on television shows. The modus operandi was to leverage his public endorsements to artificially boost stock prices, allowing him to profit by selling off his holdings swiftly once the prices peaked. SEBI’s investigation revealed that these trades were executed through entities connected to Bhasin and his family members, such as Venus Portfolios Pvt Ltd, Gemini Portfolios Pvt Ltd, HB Stockholdings, and Leo Portfolios.

SEBI is currently calculating the total profits generated from these illicit practices, focusing on high-volume stocks like cash equities and stock futures. The regulator has imposed joint and several liability on the individuals involved and frozen their bank and demat accounts as a precautionary measure. In light of this case, concerns have arisen about the lack of regulatory oversight on ‘finfluencers’ and guest analysts who provide stock recommendations on media platforms without proper SEBI registration.

The investigation by SEBI covers the period from January 2020 to June 2024, highlighting the need for stricter regulations and monitoring of market participants to prevent such fraudulent activities. The interim order serves as a warning to those who seek to exploit the market for personal gain at the expense of unsuspecting investors. SEBI’s swift action underscores its commitment to maintaining market integrity and protecting investors from illicit practices.