Explained: What Is Rs 11 Crore Front-Running Scam? SEBI Bans Market Expert Sanjiv Bhasin — Here's What Happened

The Securities and Exchange Board of India (SEBI) issued an interim order cum show-cause notice against Sanjiv Bhasin and 11 other individuals and entities for allegedly indulging in a front-running scam related to stock recommendations.

The order observed, "It is evident that Sanjiv Bhasin, by virtue of his appearance on television channels and social media platforms, had access to non-public information about the timing and content of stock recommendations."

SEBI added that this information was used to "buy the recommended scrips before the recommendations were made public and to sell the same once the price increased post-recommendation, thereby making unlawful gains."

What is the Case About?

SEBI investigated a case between January 2020 and June 2024 following complaints that Sanjiv Bhasin, a well-known stock market expert appearing on business news channels, was manipulating stock prices for personal gain.

He allegedly recommended stocks on TV and social media after already taking positions in those stocks. When his recommendations caused prices to rise, he sold those stocks at a profit — a classic case of front-running.

In its interim order, SEBI revealed that the total unlawful gains made through the front-running scheme amounted to Rs 11.09 crore. These gains were earned by trading in stocks just before Sanjiv Bhasin made recommendations on them through television appearances and social media platforms.

SEBI stated, "The noticees collectively generated net profits of ₹11.09 crore through such coordinated trading activities, based on prior knowledge of the recommendations that were to be made by Sanjiv Bhasin."

Also Read: Google Top Executive Reveals 3 Must-Do Tips To Stay Safe Online

What is Front-Running?

Front-running is an illegal practice where someone trades based on advance, non-public information — like a major stock recommendation — before it becomes public and impacts the market. It allows unfair profits by using insider information to get ahead of other investors.

What Did SEBI Investigation Find?

Sanjiv Bhasin, while working with IIFL Securities (and even after), gave stock recommendations on TV and Telegram. Before making these tips public, he placed buy trades in select stocks via brokers.

These trades were done in accounts of entities like Venus Portfolios, Gemini Portfolios, HB Stockholdings, and Leo Portfolios — companies controlled or linked to Bhasin, his relatives (like cousin Lalit Bhasin), or close associates.

Once the public reacted to his televised advice and prices rose, Bhasin quickly sold the stocks, making significant profits. The total trading volume during this time was massive — nearly 40,000 trades were executed based on this strategy.

How Did They Coordinate?

SEBI found that Bhasin was constantly in touch with brokers and dealers from RRB Master Securities, a Delhi-based trading firm closely tied to him and his relatives. Communication was done through phone calls and WhatsApp messages. Bhasin’s instructions were acted upon before he went live with stock tips.

SEBI also found clear evidence that Bhasin’s wife, cousin Lalit Bhasin, and brother-in-law Ashish Kapur (among others) were aware of and involved in these trades. Many of them executed similar trades in their personal or family accounts, mimicking Bhasin's strategy to make profits.

SEBI highlighted the seriousness of the matter, saying, "The modus operandi adopted by the Noticees indicates a well-thought-out plan and arrangement to front-run stock recommendations by leveraging Mr. Sanjiv Bhasin’s access to the media."

Why Has SEBI Issued This Order?

Based on the evidence, SEBI believes that Sanjiv Bhasin and others used non-public information for personal gain. This violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) and Research Analyst Regulations. Bhasin, though giving stock tips widely, was not personally registered as a research analyst.

What Action SEBI Take?

As a result, SEBI restrained all 12 noticees from buying, selling, or dealing in securities until further orders and barred them from accessing the securities market directly or indirectly. The order also stated, "This is an interim measure to prevent further harm to investors and the integrity of the securities market and to ensure that the ill-got gains are not diverted."

SEBI further explained that it had chosen to act without a prior hearing as an urgent step to protect market integrity. "Given the gravity of the violations and the likelihood of continuation of such fraudulent practices, the balance of convenience lies in passing this interim ex parte order," it said.