The market regulator is looking into Sanjiv Bhasin, who has been linked to IIFL Securities, for his alleged involvement in market manipulation, as reported by sources familiar with the investigation.
These sources mentioned that officials from the regulator have examined his digital devices as part of their probe and have collected evidence.
IIFL Securities informed News channels or Print Media that Sanjiv Bhasin was not a member of its Board of Directors and that his tenure with the company ended prematurely.
"Mr. Sanjiv Bhasin was working with IIFL Securities as a Consultant on a contractual basis. His contract was scheduled to end on June 30, 2024, but due to health reasons, it was terminated early, effective June 17, 2024. Mr. Bhasin informed us about SEBI's inquiry, but we were not provided details, so we cannot comment further. It's important to note that he was not a member of the Board of Directors of IIFL Securities Limited or any other group company or affiliates," IIFL Securities stated.
Bhasin is well-known for appearing on business TV channels, where he discusses stock ideas and market sentiment.
Preliminary investigations suggest that Bhasin allegedly directed a private company to purchase specific stocks, which he later recommended on TV. Once retail interest surged and stock prices rose, the company reportedly sold off the stocks. SEBI's investigation into this scheme, known as a 'pump and dump' operation, is also examining Bhasin's connection to this entity. Sources indicate that SEBI has gathered digital records from Bhasin over recent years, providing evidence of his involvement.
Legal Perspective
Aaron Solomon, Managing Partner at Solomon & Co, informed Moneycontrol that individuals making public appearances and offering recommendations on securities through public media must comply with the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. These regulations stipulate that such individuals must not trade in securities they recommend within thirty days before or five days after their appearance. They are also required to disclose their name, registration status, and any financial interest in the discussed company.
Solomon added that failure to comply could lead to penalties under Section 15HA of the Securities and Exchange Board of India Act, 1992. Penalties range from a minimum of five lakh rupees up to twenty-five crore rupees or three times the profits from the practices.
Typically, in SEBI investigations, initial stages involve gathering evidence from personal devices. Depending on findings and submissions, SEBI issues showcause notices and subsequently imposes penalties or restrictions on the investigated entity.
Media Presence Reduction
Recently, Bhasin appears to have reduced his TV appearances and is now retweeting followers' comments thanking him for stock recommendations. Since June 15, queries about his absence from TV have increased, coinciding with actions by the market regulator around that time.
SEBI Crackdown
SEBI has been actively targeting guest experts on media platforms, particularly TV channels, suspected of manipulating stock prices.
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IIFL Securities Shares Drop 7% Amid SEBI Inquiry Into Sanjiv Bhasin
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