SEBI Cracks Down On Market Manipulation; Finds Experts Misusing TV Stock Tips For Illegal Gains

New Delhi: SEBI has passed an ex parte interim order cum show cause restraining Sanjiv Bhasin, former Director at IIFL Securities, from the securities market for allegedly being involved in a front-running scam and profiteering once stock prices surged after his on-air endorsements, through which he quickly offloaded the stocks at inflated prices.

The Securities and Exchange Board of India (SEBI) has passed an ex parte interim order against Sanjiv Bhasin, former Director at IIFL Securities, in connection with an alleged front-running scam.

Bhasin is alleged to have profited by offloading stocks at inflated prices after promoting them on-air, triggering a surge in their value. The order also names 11 others and alleges a coordinated stock manipulation scheme spanning business media channels.

“This was a textbook case of pump and dump using mass media to influence unsuspecting retail investors,” SEBI noted in its interim order.

The allegations stem from Bhasin’s alleged involvement in front-running trades in the names of related entities just before recommending those stocks on prime-time business shows. The modus operandi was to profit once stock prices rose after his televised endorsements by swiftly offloading holdings at elevated prices.

The investigation revealed that the trades were pre-executed in the accounts of entities such as Venus Portfolios Pvt Ltd, Gemini Portfolios Pvt Ltd, HB Stockholdings, and Leo Portfolios, all of which were directly or indirectly connected to Bhasin, his cousin Lalit Bhasin, and other family members.

The market regulator is still quantifying the profits derived from the alleged front-running. 

However, the trading pattern indicates a concentration in high-volume stocks and segments such as cash equities and stock futures.

SEBI has imposed joint and several liability on the noticees and frozen the associated bank and demat accounts. They have also been barred from accessing the securities market until further notice.

The case comes amid growing concern over the lack of regulatory oversight on “finfluencers” and guest analysts who offer stock tips on mass media platforms without SEBI registration.

SEBI’s investigation covers the period from January 2020 to June 2024.

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