SEBI Bars Four Entities From Securities Market For Two Years, Imposes ₹4 Crore Penalty

New Delhi:Sebi on Monday barred four entities from the securities market for two years and imposed a penalty totalling Rs 4 crore on them for executing trades based on advance information of stock recommendations given by guest experts on the Zee Business channel."The said debarment period shall be reckoned from the date of the Interim order dated February 08, 2024," Sebi said in its 55-page final order.

Individually, the regulator fined Rs 50 lakh on Partha Sarathi Dhar, Rs 75 lakh each on Manan Sharecom and Kanhya Trading Company, and Rs 2 crore on SAAR Commodities.In its order, Sebi noted that the four entities made a profit by executing trades based on advance information of stock recommendations given by guest experts.

The investigation found that stock tips were pre-shared with select entities, giving them an unfair advantage over public investors. These entities placed trades in advance and booked profits once the stock prices moved following the televised tips.Evidence collected during the probe included WhatsApp chats, trading patterns, and profit-sharing arrangements.

Sebi found that the "scheme created systematic information asymmetry whereby gullible investors were induced to trade based on guest expert recommendation. The general public remained unaware that the information/recommendations had been pre-shared with other entities.In the process, investors became victims of deliberate information asymmetry, it added.The scheme resulted in unlawful gains of Rs 7.41 crore, which have already been disgorged as part of settlement proceedings.

By indulging in such trades, the entities violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.Accordingly, Sebi said, "Noticees namely, Partha Sarathi Dhar, SAAR Commodities Private Ltd, Manan Sharecom Private Ltd and Kanhya Trading Company are debarred from accessing the securities market and are prohibited from buying, selling and otherwise dealing in the securities market, directly or indirectly, in any manner whatsoever, for a period of two years.

The said debarment period shall be reckoned from the date of the Interim order." However, proceedings against Himanshu Gupta, one of the guest experts, have been closed with no penalty, as no direct involvement was established.

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