Sebi Drops Case Against Prudent Broking: Lack of Evidence

New Delhi, Jul 18 (PTI) Markets regulator Sebi on Thursday disposed of a case against stock broker Prudent Broking Services citing "lack of evidence" in the matter of Alpesh Furiya and connected entities trading ahead of recommendations made during market shows on a television channel.

In its order, Sebi noted that Alpesh Furiya is an authorised person (AP) of Prudent Broking Services and carried out alleged fraudulent trades in the accounts of Alpesh Group entities.

Further, the regulator noted that Prudent Broking Service was responsible for the alleged role of its AP -- Alpesh Furiya -- pertaining to the trading accounts of Alpesh Group.

Disposing of the case, Sebi said that the investigation report has not provided the role played by Prudent Broking Services for the fraudulent trades of the AP as held by the regulator in its order passed in June 2024.

"The mere fact of the trades having been dealt through the CTCL terminal by the AP of the Noticee is not sufficient evidence as it is not corroborated by the knowledge that the Noticee knew such fraudulent trades were taking place and that the Noticee had allowed them to be carried out despite such knowledge. The investigation report has no information about the knowledge of the Noticee nor has the same been alleged in the SCN (show cause notice)," Sebi said.

"Based on mere trading of the AP through CTCL (Computer-to-Computer Link) terminal of AP, it may not be sufficient evidence to hold the noticee (Prudent Broking Services) responsible for the action of AP. Thus, due to lack of evidence, the noticee cannot be held liable as alleged," it added.

With respect to the allegation that the noticee on being asked it failed to provide the evidence regarding all the orders placed by Alpesh Group entities during the investigation period, it stated that since the trade orders were placed through the CTCL terminal allotted to its AP (Alpesh Furiya) in the family accounts of the AP, it does not have any voice recordings.

In June, Sebi barred Pradeep Pandya, who was anchoring stock market shows on a television channel, and seven other entities from the securities market for five years and imposed a fine of Rs 2.6 crore collectively for indulging in fraudulent trading activities.

Apart from Pandya, others banned by Sebi are Alpesh Furiya, Manish Furiya, Alpa Furiya, Alpesh Vasanji Furiya HUF, Manish V Furiya HUF, Mahan Investment and Toshee Trade.

Pandya was the host/co-host of various shows at CNBC Awaaz till August 2021, while Alpesh Furiya appeared on the television channel as a guest/external expert and gave stock recommendations on his Twitter (now X) handle.

A high correlation was noted between the stock recommendations given by Pradeep Pandya on the show 'Pandya Ka Funda' and the Buy-Today-Sell-Tomorrow trades and intra-day trades executed by Alpesh Furiya and connected entities during the period from November 2019 to January 2021.

"Pradeep Pandya, while serving as an anchor for CNBC Awaaz, shared confidential information regarding upcoming stock recommendations with Alpesh Furiya and vice-versa," Sebi had stated in its order.