Sebi Settles Stock Manipulation Case Against Individual

New Delhi, Feb 27 (PTI) An individual on Thursday settled with markets regulator Sebi a case related to manipulation in the share prices of Sadhna Broadcast Ltd by way of uploading misleading videos on YouTube channels on payment of settlement amount.

The individual -- Ravindra Dahyabhai Patel-- shelled out Rs 72.8 lakh as the settlement amount and Rs 1.90 crore as the disgorgement amount, the Securities and Exchange Board of India (Sebi) said in its order.

Additionally, he will undergo voluntary debarment from buying, selling or dealing in securities for a period of six months as a part of the settlement terms, it added.

This settlement followed an application from Patel requesting Sebi to resolve the alleged violation "without admitting or denying the findings of facts and conclusions of law" through a settlement order.

Acknowledging the settlement, the regulator said," In view of the acceptance of the revised settlement terms by panel of WTMs and receipt of ... amounts by Sebi, the proceedings initiated against the applicant vide the SCN (show cause notice) dated January 9, 2024, are hereby disposed of".

The case arises from an issue pertaining to price manipulation and subsequent offloading of shares in the scrip of Sadhna Broadcast. Sebi's examination began after receiving certain complaints during July-September 2022 alleging that there was price manipulation and subsequent offloading of shares in the scrip of SadhnaBroadcast.

The regulator examined the complaints and prima facie found that certain net sellers in the shares of the company were connected to the creator of YouTube channels, wherein videos with false content and unrealistic target price for the scrip were uploaded with the intention to influence and induce public investors to invest in the scrip.

Based on the examination, an interim order was passed in the matter in March, 2023, whereby 31 entities were prohibited from the securities market.

In the meantime, Sebi conducted an investigation for the period March 2022 to November 2022 to ascertain the possible violations of the provisions of the Sebi Act and the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Rules. These findings pointed to alleged violations of Sebi Act and the PFUTP norms by the applicant. PTI SP

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