MUMBAI: The Securities and Exchange Board of India (SEBI) has barred four entities from participating in the securities market for two years and imposed a cumulative penalty of ₹ 4 crore after an investigation found them guilty of trading on advance stock recommendations aired on the Zee Business channel.
According to SEBI’s 55-page final order, the entities exploited stock tips given by guest experts, which were leaked prior to the telecast. The entities would place trades in advance and exit after prices moved due to the recommendations, generating illicit profits at the cost of unsuspecting retail investors.
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The regulator has imposed penalties on SAAR Commodities (₹2 crore), Kanhya Trading Company (₹75 lakh), Manan Sharecom (₹75 lakh), and Partha Sarathi Dhar (₹50 lakh). The debarment period is to be reckoned from the date of the interim order, i.e., February 8, 2024.
Evidence collected during the investigation included WhatsApp messages detailing trading instructions, profit-sharing discussions, and distinct trading patterns pointing to prior knowledge of upcoming recommendations.
SEBI’s investigation uncovered that these trades were not coincidental but part of a coordinated scheme that benefited a select few with prior access to televised advice, thereby creating systematic information asymmetry in the securities market.
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“The scheme induced public investors to act upon recommendations that were pre-exploited by others,” SEBI noted. It further stated that this manipulation eroded investor confidence and distorted the fairness of the market.
The manipulation came to light as part of SEBI’s broader effort to monitor guest expert appearances on television and their impact on stock movements. The findings echo a larger concern about the credibility of financial advice in public media and the risk of its misuse by insiders.
SEBI’s order underlines that the regulator is committed to curbing the misuse of privileged information and reinforcing transparency in the securities ecosystem.
The entities have been directed to pay the fines within 45 days.