The Securities and Exchange Board of India (SEBI) has imposed market bans on Bollywood actor Arshad Warsi, his wife Maria Goretti, and 57 other individuals for their involvement in a stock manipulation scheme related to Sadhna Broadcast Ltd. The bans range from one to five years, depending on the level of involvement.
Overview of the Scheme
SEBI’s investigation revealed that the accused parties participated in a “pump-and-dump” scheme. This involved disseminating misleading information through YouTube videos to artificially inflate the stock price of Sadhna Broadcast Ltd. Once the stock price was elevated, the accused sold their holdings at a profit, leaving unsuspecting investors with losses.
Penalties Imposed
- Arshad Warsi and Maria Goretti: Each fined ₹5 lakh and banned from the securities market for one year.
- Other Individuals: Fines ranging from ₹5 lakh to ₹5 crore, with market bans extending up to five years.
- Disgorgement: All 59 entities are collectively required to return ₹58.01 crore in unlawful gains, along with 12% annual interest from the end of the investigation period until full payment.
Background on Sadhna Broadcast Ltd
Sadhna Broadcast Ltd, now known as Crystal Business System Ltd, was at the center of this fraudulent activity. The company’s stock was promoted through deceptive online content to lure investors, leading to artificial price inflation.
Implications and Regulatory Response
This case underscores the growing concern over the misuse of digital platforms for financial fraud. SEBI’s decisive action serves as a warning to market participants about the consequences of engaging in manipulative practices. The regulator continues to monitor and address such activities to protect investor interests and maintain market integrity.The Economic Times
