SEBI has taken strict action against those who pump and dump (manipulate) shares through YouTube.
Market regulator SEBI has banned 31 institutions and individuals from investing in the stock market. This includes actor Arshad Warsi, his wife Maria Goretti, promoters of Sadhna Broadcast, all of whom are accused of posting misleading videos on YouTube channels about buying shares of the company.
According to PTI, the promoters of Sadhna who have been banned from the stock market include Shreya Gupta, Gaurav Gupta, Saurabh Gupta, Pooja Aggarwal and Varun Media.
SEBI has taken action in response to several complaints that false content was being posted on these channels as part of a marketing campaign to defraud innocent investors.
The business was running on YouTube with false videos
SEBI had received a complaint that the shares of the television channel Sadhna Broadcast were being manipulated. It was said in the complaint that false content about the company was being served in YouTube videos to attract investors.
After this, the market regulator investigated it till April-September 2022 and found that Sadhna’s shares and volumes have jumped till April-Mid July 2022. In the second half of July 2022, videos with the names ‘The Advisor’ and ‘Moneywise’ were uploaded on YouTube with false and misleading information about Sadhna.
Arshad Warsi, wife earned profits
In these YouTube videos, it was told that investors should invest in Sadhna’s shares to earn huge profits.
Due to such misleading YouTube videos, Sadhna’s shares and volumes shot up. It seems that the investors invested in the stock after getting influenced by these videos.
And during this time some promoter shareholders, management people, non-promoter shareholders sold their holdings in large numbers and made huge profits.
The market regulator found that these people earned Rs 41.85 crore illegally by making such misleading videos and uploading them on YouTube channels. According to SEBI, Arshad Warsi earned a profit of Rs 29.43 lakh and his wife Rs 37.56 lakh.
Violation of SEBI Act
According to SEBI, some shareholders used this period to make massive profits. This is in violation of the SEBI Act and the Unfair Trade Practices Rules mandated by SEBI. According to SEBI, the viewership of both these channels was high enough that this manipulation could be avoided.
What is in the order of SEBI can be seen by clicking on the link below.
Rigging in the shares of Sadhna Broadcast Limited
Similar rigging was also found in the shares of Sadhna Broadcast Limited. It has been alleged that YouTube channels “The Advisor” and “Moneywise” spread false news to artificially inflate the volume. SEBI has banned all the 31 entities involved in manipulation. Explain that both Sharpline and Sadhna are broadcasting companies engaged in the business of television, news, music and serials.
Units have also been advised to deposit the unbooked profit booked during this period in an escrow account set up for the purpose.
SEBI has alleged that this sudden increase was the result of misleading information spread through YouTube channels. The channels broadcast false information about the company including deals with Adani, Zee and Sony Pictures. He offered huge returns on investment and predicted a 25-fold rise in the share price in a year.
YouTube channels made one-way communication a weapon
To avoid suspicion and avoid public scrutiny, channels allowed one-way communication with customers. Customers and viewers were disabled from posting any comments. These videos were later removed from the channel. As per the call records, the producers of both the channels were in touch with each other. Similar connections have also been found between the creators of the videos and shareholders who held more than 1% of the shares in the company.
Video makers booked huge profits with these shareholders. SEBI has found that YouTubers alone spend about Rs 4 crore in advertising to promote these videos.
A similar strategy was adopted in the case of Sharpline’s sister company Sadhna Broadcast. YouTube channels- Advisor and Moneywise made several false claims about the future prospects of the company.
