NEW DELHI: The capital markets regulator the Securities and Exchange Board (Sebi) has banned market commentator Sanjiv Bhasin and 11 others and companies for market manipulation and front-running.
The regulator has also directed that over Rs 11.4 crore in unlawful gains, allegedly derived from these violations, be impounded from these parties.
In an interim ex-parte order running into 149 pages on Tuesday, Sebi has said these individuals have engaged in market manipulation through stock recommendations made on television channels and various social media platforms.
The 12 noticees, including Bhasin, his cousin Lalit Bhasin, Lalit's brother-in-law Ashish Kapur, and other relatives, dealers, and related companies, including Bhasin’s RRB Master Securities, Delhi, have been restrained from accessing the securities market.
They are also prohibited from directly or indirectly buying, selling or otherwise dealing in securities. Furthermore, their bank and demat accounts have been frozen due to the alleged unlawful gains, Sebi said in the order.
"An amount of Rs 11,37,19,170, being the total amount of unlawful gains earned from the alleged violations, shall be impounded, jointly and severally in the manner and the noticees are directed to open fixed deposit accounts in a scheduled commercial bank to credit/deposit jointly and severally the aforesaid amount of unlawful gains with a lien marked in favour of Sebi and the amount kept therein shall not be released without permission from Sebi," Sebi said in the 149-page order passed by whole time member Kamlesh C Varshney.
Sebi has instructed Bhasin, who is noticee 1, to preserve the records of his various social media accounts until further directions.
It also said "the noticees shall not dispose of or alienate any of their assets/properties, till such time, the amount of unlawful gains is credited to fixed deposit accounts except with the prior permission of Sebi."
First bought securities and then recommended them via TV channels
The accused have also been directed to provide a full inventory of all their movable and immovable assets. They have 21 days from the date of receiving the order to file replies to Sebi and can request a personal hearing.
Sebi's investigation has revealed that Bhasin, a director at IIFL Securities, allegedly traded through the broker RRB Master Securities, Delhi. He would first buy securities himself, then recommend the same securities to the public on news channels like Zee Business and ET Now, and/or the IIFL Telegram channel.
Once the prices of these securities rose following his recommendations, Bhasin would sell them, thereby making a profit.
Sebi concluded that he manipulated security prices and made "ill-gotten gains".
During his media appearances, Bhasin's designation was shown as a director with IIFL. However, the Sebi probe found that he traded through RRB Master Securities in the accounts of its clients Venus Portfolios, Gemini Portfolios, and HB Stock Holdings, contrary to his own recommendations made on media channels during the investigation period.
Despite predominantly issuing "buy" recommendations to viewers/followers on media channels and other platforms, Bhasin would square off his positions (majorly sell), often within minutes, through dealers of RRB Master in the accounts of Venus, Gemini, and HB. Evidence suggests he "would remain in continuous touch with dealers and direct them to follow buy/sell instructions, immediately," the order noted.
The Sebi investigation further revealed that the Times group signed an exclusive contract with Bhasin for his appearances on its channels ET Now and ET Now Swadesh in October 2023. This contract was reportedly based on his experience with IIFL and his popularity among retail investors.
Sebi also noted that while IIFL is registered with Sebi as a research analyst and investment advisor, Bhasin was not registered as either an IA or an RA in his personal capacity.
Contact contact with RRB Master's dealers
Sebi emphasised that throughout the alleged scheme Bhasin maintained constant contact with RRB Master's dealers for immediate compliance with his directions, with trades being placed in the trading accounts of Venus, Gemini, and HB Stockholdings shortly thereafter.
"Substantial profits have been made in these accounts," said Sebi and that Lalit Bhasin and Ashish Kapur also aided him in executing these trades in the trading accounts of Venus, Gemini, and HB, entities related to them.
"After analysing all evidences on record, I hold that this is a fit case to exercise powers of passing interim order so as to insulate the securities market and to protect the unlawful gains from being dissipated further, which may go beyond the regulatory reach," Varshney said.
Rajiv Kapoor, Jagat Singh and Praveen Gupta, who were dealers of RRB Master, are also found to be information misusers in the case, whom the regulator said may also have benefitted from the illegal activities.
Sebi conducted its investigation from January 1, 2020 to June 12, 2024 to arrive at the findings.
It had received three complaints in September-October 2023, alleging that Bhasin, who was then a director at IIFL Securities, traded through RRB Master where he used to first buy securities himself, then used to recommend the same securities to the public.