Securities Exchange Board of India (SEBI) has issued an interim order and a show cause notice to Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal, and Simi Bhaumik for manipulating the market, unfair trade practices, and defrauding investors, and other regulatory violations. These individuals allegedly used their privilege of being telecast on the Zee Business TV channel as 'guest experts' to conduct illegal activities that violated multiple SEBI regulations.

These so-called 'experts' of the stock market had allegedly teamed up with traders to illegally profit from the recommendations they were making on the Zee Business channel. SEBI investigations reveal that the unlawful gains from the nexus between these 'guest experts’ and other parties who profited from their unlawful practices amounted to ₹7.41 crore in less than a year, from February 1, 2022, till December 31, 2022. After more than a year of observing their activities, these individuals have been pronounced as guilty after investigation by the regulator.

Modus operandi of the criminal enterprise

All the five offenders were appearing on Zee Business in their own branded shows. Kiran Jadhav and Ashish Kelkar provided stock recommendations under the tagline "Kiran Ka Kamal". Himanshu Gupta broadcast as "Hitman Himanshu". Mudit Goyal was not even a SEBI registered Research Analyst, but he provided stock recommendations under the tagline "Mudit Ke Munafe". Simi Bhaumik had a show called "Simi Ke Non Stop Shares".

During this time, a trader, Nirmal Kumar Soni, approached them with a scheme. The 'Guest experts' would share information about the recommendations they were going to make on TV to Soni who would then trade beforehand on those recommendations and make profits when the rest of the investors started following the recommendations. Soni promised share of profits from such trades to these so-called Experts.

Soni used the advance information of stock recommendations made by these 'experts' to trade on the accounts of SAAR Commodities Private Limited, Manan Sharecom Private Limited and Kanhya Trading Company. Nitin Chhalani of Kanhya Trading, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, and Ramawatar Lalchand Chotia of SAAR Commodities, along with the mentioned companies have also been charged of aiding and abetting the crime.

Simi Bhaumik turns out to be the greediest of the 'guest experts' as she was not only limited to pocketing the illicit profits shared by Soni. Simi indulged her husband, Pratha Sarathi Dhar in trading on the same lines as Soni and the duo made even more illegal profits.

All the five offenders, Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal, and Simi Bhaumik were sharing the advance information about recommendations they would make on the television channel, which in turn was shared with Soni and Simi's husband, Partha Sarathi.

The entire operations involved using multiple phone numbers, SIMs registered under other names, using false names in the phone address book to conceal the identity of co-offenders, coded messages, and cryptic communication. The concerted moves of the five 'guest experts' made in tandem with Soni and Partha Sarathi indicate that the entire operation was being run like a sustained and premeditated racket rather than just going morally astray due to short-term temptation.

SEBI has, so far, only issued directions to the offenders to disgorge an amount equivalent to the unlawful profits, with interest; refrain from accessing the securities market; prohibiting offenders from buying, selling, or otherwise dealing in securities for an appropriate period; refrained the registered RAs from undertaking any activity relating to research advisory.

The lacunae in the system that creates white-collar criminals

One does not need to be a SEBI registered financial adviser or research analyst to make public recommendations about stocks. However, strangely, Zee Business hired an unregistered entity, Mudit Goyal, to be an 'expert guest' on their channel in the first place.

Moreover, the laws for registered entities who make public recommendations are not any more stringent than the laws that govern those who do not make public appearances. In the current times when the ecosystem is rife with self-proclaimed experts who spout recommendations to millions on television and the social media, it appears there is a need for regulations that stem the rot of corruption in stock market advisory more effectively.

Himanshu Gupta

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