Market regulator Securities and Exchange Board of India (SEBI) has banned 31 entities, including actor Arshad Warsi and his wife Maria Goretti Warsi among others from the securities market for manipulating stocks via YouTube videos and then dumping them at artificially inflated prices.

SEBI said these entities were engaged in a coordinated scheme to induce unsuspecting investors to acquire securities in Sadhna Broadcast, leading to an unnatural increase in the prices of the scrip and finally sold shares at inflated prices thereby making illegal gains at the cost of the new investors.

"All the Noticees are restrained from buying, selling or dealing in securities either directly or indirectly, in any manner whatsoever until further orders," the market watchdog said.

The order comes after SEBI received complaints alleging that there was price manipulation and offloading of shares by certain entities in the scrip of Sadhna Broadcast.

The complaints alleged that misleading YouTube videos with false content, backed by paid marketing campaigns worth crores of rupees for additional reach, were being uploaded to lure investors. Once these unsuspecting investors entered the scrip, the said entities allegedly offloaded their holding at an inflated price.

Sadhna Broadcast was incorporated in 1994 and has its registered office at New Delhi. It was listed on BSE on January 18, 2018. The company is engaged in the business of launching television channels and to carry out the business of T.V. news, films, music, serials etc, as per its annual report.

During the second half of July 2022, false and misleading YouTube videos about the company were uploaded on two YouTube channels – 'The Advisor' and 'Moneywise', said SEBI.

These YouTube videos peddled false and misleading news to recommend that investors should buy the Sadhna stock for extraordinary profits, it said.

These YouTube Channels had lakhs of subscribers and the misleading YouTube videos had crores of viewership aided by promotion through paid advertising campaigns, the regulator added.

One of the misleading videos on these YouTube channels was that Sadhna Broadcast is going to be taken over by Gautam Adani-led Adani Group.

"Post to the release of the misleading YouTube videos, there was an increase in the price and trading volume of the Sadhna scrip. The volumes appear to have been contributed by large number of retail investors likely influenced by the misleading YouTube videos. During this period, certain promoter shareholders, key management personnel of Sadhna, and nonpromoter shareholders who held more than 1% of shareholding in Sadhna offloaded a significant part of their holdings at inflated prices and booked profits," SEBI said.

Reacting to the regulator's order, Nithin Kamath, founder and chief executive of discount brokerage Zerodha, said that this should serve as a powerful deterrent. "These scams had become the easiest game in town for manipulators," Kamath wrote on Twitter.

These elaborate orders should hopefully put some fear amongst unauthorised tipsters and people offering unauthorised portfolio management services, he tweeted, adding such actors damage the sanctity of capital markets in India.

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SEBI bans Arshad Warsi, others for using YouTube to manipulate stocks