Hemant Ghai had the advance information about the recommendation to be made on the “stock 20-20″ show, co-hosted by him, and that he directly or indirectly used it to his advantage, Sebi said in an interim order.
The show features recommendations on certain stocks to be bought and sold during the day.
In addition, he has been directed to cease and desist from undertaking any activity related to giving investment advice, publishing of research reports related to the securities market, till further directions.
Further, the capital markets watchdog has also directed to impound the proceeds of Rs 2.95 crore generated by fraudulent trades.
Sebi, prima facie, found that Hemant along with his wife Jaya Hemant Ghai and mother Shyam Mohini Ghai employed a scheme to conduct fraudulent or unfair trading based on the advance information pertaining to recommendations to be made in the show “stock-20-20”.
On analysis of the trading pattern in the trading account of Jaya Hemant Ghai and Shyam Mohini Ghai for the period between January 1, 2019, and May 31, 2020, high correlation of their trades was observed with the stocks recommended in the show. It thereby generated the proceeds of Rs 2.95 crore by carrying out fraudulent trading in respect of recommended stocks.
The regulator found that shares were consistently purchased in the trading accounts of Hemant Ghai’s wife and mother, one day prior to the day of recommendation on the show.
To capture the significant benefits from the price movement caused by the recommendations on the show, they then sold their shares as soon as the market opened on the day of the recommendation and consequently, earned profits and perpetrated a fraud upon the market and the viewers of the show, it added.
Hemant was prima facie using the trading accounts of his wife and mother. Besides, Jaya Hemant Ghai and Shyam Mohini Ghai are also liable for the violations, related to the trades done/facilitated in their accounts by him.
Through such activities, they violated the provisions of Sebi’s PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
Accordingly, these individuals have been “restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever till further directions”.
Also, copies of the order have been sent to CNBC-TV 18 and the News Broadcasting Standards Authority (NBSA) for information and necessary action, if any, in terms of the code of cnduct applicable to Hemant Ghai.
In addition, CNBC-TV18 has been advised to inform viewers of the relevant shows, about the order.