Sebi bars Sanjiv Bhasin, 11 others over alleged market manipulation, orders ₹11.3 cr impound

Capital markets regulator, the Securities and Exchange Board of India (Sebi), has issued an interim ex-parte order against market commentator and former executive at IIFL Securities, Sanjiv Bhasin and 11 other individuals and companies. The order alleges market manipulation through stock recommendations made on television channels and various social media platforms.

Sebi has directed that over ₹11.3 crore in unlawful gains, allegedly derived from these violations, be impounded from the involved parties.

The 12 noticees, including Sanjiv Bhasin, his cousin Lalit Bhasin, Lalit's brother-in-law Ashish Kapur, and other relatives, dealers, and related companies (noticees 1 to 3 and 5 to 12), have been restrained from accessing the securities market. They are also prohibited from directly or indirectly buying, selling, or otherwise dealing in securities. Furthermore, their bank and demat accounts have been frozen due to the alleged unlawful gains.

The noticee 4, RRB Master Securities Delhi Ltd, is also prohibited from buying, selling, or dealing in securities.

Sebi has instructed Sanjiv Bhasin, noticee 1, to preserve the records of his various social media accounts until further directions are issued. It also stated that "Noticees shall not dispose of or alienate any of their assets/properties, till such time, the amount of unlawful gains is credited to fixed deposit account(s) except with the prior permission of Sebi."

The accused entities have also been directed to provide a full inventory of all their movable and immovable assets. They have 21 days from the date of receiving the order to file replies to Sebi and can request a personal hearing.

Key highlights from Sebi's 149-page order:

Sebi's investigation revealed that Sanjiv Bhasin, a director at IIFL Securities, allegedly traded through the broker RRB Master Securities Delhi. He would first buy securities himself, then recommend the same securities to the public on news channels like "Zee Business" and "ET Now," and/or the IIFL Telegram Channel. Once the prices of these securities increased following his recommendations, Sanjiv Bhasin would sell them, thereby making a profit. Sebi concluded that he manipulated security prices and made "ill-gotten gains."

During his media appearances, Sanjiv Bhasin's designation was shown as 'Director, IIFL'. However, the Sebi probe found that he traded through RRB Master Securities Delhi in the accounts of its clients Venus Portfolios Private Ltd, Gemini Portfolios Private Limited, and HB Stock Holdings Limited, contrary to his own recommendations made on media channels during the investigation period.

Despite predominantly issuing "buy" recommendations to viewers/followers on media channels and other platforms, Sanjiv Bhasin would square off his positions (majorly sell), often within minutes, through dealers of RRB Master in the accounts of Venus, Gemini, and HB. Evidence suggests he "would remain in continuous touch with dealers and direct them to follow buy/sell instructions, immediately."

The investigation further revealed that the Times group signed an exclusive contract with Sanjiv Bhasin for his appearances on TV channels like "ET Now" and "ET Now Swadesh" starting October 2023. This contract was reportedly based on his experience with IIFL and his popularity among retail investors. SEBI noted that while IIFL is registered with Sebi as a Research Analyst and Investment Advisor, Bhasin was not registered as either an IA or an RA in his personal capacity.

Sebi emphasised that throughout the alleged scheme, Sanjiv Bhasin maintained constant contact with RRB Master dealers for immediate compliance with his directions, with trades being placed in the trading accounts of Venus, Gemini, and HB Stockholdings shortly thereafter. Sebi states that "substantial profits have been made in these accounts," and that Lalit Bhasin and Ashish Kapur aided him in executing these trades in the trading accounts of Venus, Gemini, and HB, entities related to them.