SEBI on Wednesday barred six persons from accessing the securities market for indulging in fraudulent and unfair trade practices and ordered impounding wrongful gains of Rs 2.84 crore in the case of stock recommendations made using messaging app Telegram, PTI said.
The six persons are Himanshu Mahendrabhai Patel, Raj Mahendrabhai Patel, Jaydev Zala, Mahendrabhai Bechardas Patel, Kokilaben Mahendrabhai Patel and Avaniben Kirankumar Patel.
The Telegram channel 'bullrun2017' having a subscriber base of nearly 52,000, prima facie operated by Himanshu, Raj and Jaydev used to primarily give recommendations in small cap scrips, the price and volume of which could be easily impacted, Sebi said in its 37-page interim order.
Based on an analysis of trading by Himanshu, Raj and Jaydev and their connected/ related entities, it was prima facie observed that the entities used to take positions in the scrips prior to the same being recommended in the Telegram channel.
Subsequently on recommending the scrips in the Telegram channel, they used to offload their positions in the scrips, thereby making significant profits.
In order to obtain conclusive evidence against Himanshu, Raj and Jaydev, a search and seizure operation was undertaken on December 1, 2021, against the entities and the digital devices were seized.
Based on the analysis of the seized devices, Sebi said it was conclusively established that Himanshu, Raj and Jaydev were the administrators of the Telegram channel 'bullrun2017'.
Further, it was also understood that Himanshu, used to post messages on the Telegram channel and used to inform Jaydev about the scrip prior to the same being recommended in the Telegram channel, the regulator noted.
The trades were undertaken by Himanshu and Raj in their own accounts as well as the accounts of their family members -- Mahendrabhai Bechardas Patel (father of Himanshu and Raj), Kokilaben Mahendrabhai Patel (mother of Himanshu and Raj) and Avaniben Kirankumar Patel (sister of Himanshu and Raj). Further, Jaydev used to trade using only his own account, as per Sebi order.
The watchdog said that Himanshu and Raj along with their family members have made wrongful gains of Rs 2.61 crore while Jaydev has made wrongful gains of Rs 0.23 crore by taking positions in scrips ahead of their recommendations in the Telegram channel and subsequently offloading the said positions, post the recommendations.
By indulging in such acts, they violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, Sebi said.
It has also ordered impounding wrongful gains to the tune of Rs 2.84 crore.
The regulator has directed the individuals to ''refrain from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period''.
(With PTI inputs)
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