The Securities and Exchange Board of India (SEBI) recently barred 31 entities, including actor Arshad Warsi, his wife Maria Goretti, YouTuber Manish Mishra and promoters of Sadhna Broadcast – Shreya Gupta, Gaurav Gupta, Saurabh Gupta, Pooja Aggarwal and Varun Media – from the securities market. But, why?
They allegedly uploaded misleading videos on YouTube channels recommending investors to buy the company’s shares, as per a report by Indian Express. Further, the regulator seized illicit gains made by the entities after the “pump and dump” scam to the tune of Rs 41.85 crore, the report said, requiring all 31 persons to open an escrow account with a scheduled commercial bank and deposit the impounded sum within 15 days.
Pump and dump is a manipulative scheme to boost the price of stock through fake recommendations based on false, misleading, or exaggerated statements (pump). When the price rises, the operators sell the stock. SEBI terms such schemes as fraudulent and unfair trade practices, which can hamper the sanctity of Indian capital markets.
In the case of Sharpline, for example, claims about the Adani group owning the company were made. The manipulators then sold the stock after naive investors brought it (dump).
According to SEBI, Arshad Warsi and a few others have “pumped up” the share prices of Sadhna Broadcast and Sharpline Broadcast through uploading misleading videos on YouTube channels.
These YouTube videos had circulated false and misleading news to recommend that investors should buy shares of Sadhna and Sharpline for big profits.
After the release of videos, SEBI found that there was an increase in the price and trading volume of the shares of two firms during April-July last year. Large volumes indicated that a large number of retail investors were likely influenced by the videos and bought the shares.
During the same time, Arshad Warsi, promoter shareholders and others sold their holdings at inflated prices and booked profits.
According to the regulator, Arshad Warsi has made a profit of Rs 29.43 lakh and his wife has earned a profit of Rs 37.56 lakh.
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There is no shortage of personal finance advice with the advent of financial influencers and the immense reach of social media. But, certain influencers with vested interest, according to experts, pose a harm to an individual’s financial stability, the ET report explains. They warn retail investors to exercise caution before acting on unapproved advice from various sources, notably social media.
So, do proper research before investing and follow the right source for investing. Follow the advice of SEBI registered advisors. If you do not understand the market, then invest via mutual funds.
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