Securities and Exchange Board of India: In a case involving a fraudulent scheme to manipulate the share price of Sadhna Broadcast Limited, Ashwani Bhatia (Whole Time Member) after a detailed investigation, found that a group of connected entities had engaged in a coordinated “pump and dump” operation by artificially inflating the price and trading volume of the company’s scrip and luring retail investors through misleading YouTube videos being in violation of the SEBI Act, 1992 and the PFUTP Regulations, 2003.
Thus, the SEBI debarred the noticees from accessing the securities market, directed disgorgement of unlawful gains along with interest, and warned against the misuse of digital platforms for market manipulation, emphasizing the regulator’s zero-tolerance stance toward such deceptive practices.
Factual Background
The matter came to SEBI’s attention through complaints and media reports highlighting a sharp and unexplained rise in the price and volume of SBL’s scrip. The investigations revealed that during the period between April 2022 and July 2022, the price of SBL shares rose from approximately ₹2.50 to ₹13.05 per share. This significant increase, which occurred over a short period, was not supported by the company’s financials or any credible market developments.
Further investigation by SEBI revealed that the unnatural price and volume movement was triggered and sustained through a two-pronged fraudulent scheme. The first prong involved artificially inflating the price and volume of SBL’s shares through a coordinated trading strategy by a group of connected entities. The second prong involved the dissemination of misleading and manipulative YouTube videos from channels such as “The Advisor” and “Moneywise”, which claimed to offer insider-like information and urged retail investors to buy the scrip with promises of extraordinary returns.
Role of Arshad Warsi
Arshad Hussain Warsi (Noticee 60) was involved in trading shares not only through his own account but also through the accounts of his wife (Noticee 61) and brother (Noticee 62). During the investigation, it was established that these trades were conducted under the direct instructions of Manish Mishra (Noticee 52), who was manipulating the stock (SBL). WhatsApp chats revealed Manish Mishra transferring funds to Warsi and giving detailed trade instructions, which Warsi executed as instructed, including large-volume share purchases on specific dates. Despite Warsi’s defense claiming ignorance and victimhood, the pattern of trading, fund transfers, and WhatsApp conversations between Warsi, Manish Mishra, and Warsi’s manager Aahuti Mistry indicated clear involvement. Notably, in chats, Warsi acknowledged receiving and executing orders dictated by Mishra, and his manager Mistry admitted awareness of the manipulative scheme. Ultimately, Arshad Warsi was found to have actively facilitated the creation of artificial trading volumes as part of a pump-and-dump scheme orchestrated by Manish Mishra, thereby aiding and abetting the market manipulation which harmed investor interests and market integrity.
Analysis and Decision
The SEBI Adjudicating Authority undertook a meticulous analysis of the entire chain of events that led to the unusual and disproportionate movement in the price and volume of shares of Sadhna Broadcast Limited (SBL). It was observed that between April and mid-July 2022, there was an artificial increase in the price of the scrip from ₹2.50 to ₹13.05 per share, which represented an increase of more than 400%, even as the fundamentals of the company showed no proportional development to justify such a surge. This price rise coincided with unusually high trading volumes. SEBI identified that a network of connected entities was engaged in synchronized and structured trading, where shares were bought and sold among them to inflate demand and create a false appearance of liquidity and investor interest. These connected entities, including Sharv Properties Pvt. Ltd., among others, were linked by common directors, shared IP addresses, and financial transfers, thereby confirming the existence of a coordinated group acting in concert.
The investigation revealed that the price manipulation scheme was bolstered by a parallel campaign of misinformation through YouTube channels operated by certain noticees, namely “The Advisor” and “Moneywise”, which published videos falsely claiming imminent strategic developments involving SBL. One such video claimed that a major Hollywood production house was investing in SBL and that its shares were likely to surge to ₹300—₹400 per share within a short time. Another video fabricated the story of a prominent investor buying large stakes in SBL. These YouTube videos, presented in a slick and persuasive format, were designed to resemble professional financial advice and were aimed at retail investors who were unaware of the manipulative design behind such content. These false narratives created a misleading positive image about the company’s prospects, prompting unsuspecting investors to purchase the stock at inflated prices, thus acting as the final leg of the classic “pump and dump” operation.
SEBI’s analysis also showed that while these misleading videos were being circulated, the connected entities that had acquired SBL shares at lower prices were offloading their holdings at elevated prices to retail investors who had been lured by the misinformation. This coordinated dumping of shares not only manipulated the market but also caused substantial financial losses to retail investors. The examination of trading data clearly established that the connected entities were responsible for nearly the entire volume of trading on specific days, which negated the presence of any genuine investor demand. Furthermore, the pattern of trades, ie., entry at low prices, circulation of positive false information, and exit at peak prices, formed an unmistakable trail of fraudulent intent. These acts were found to be in gross violation of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations), specifically Regulations 3(a), (b), (c), (d), and 4(1), 4(2)(a), (e), (f), (k), and (r), which prohibit any fraudulent, manipulative, or deceptive practices in the securities market.
Based on the exhaustive evidence of coordinated trading, the dissemination of false and misleading information, and the resulting manipulation of the securities market, SEBI conclusively held that the noticees had orchestrated a fraudulent scheme intended to mislead investors and create artificial price movement in the shares of Sadhna Broadcast Limited. The conduct of the noticees amounted to a textbook example of a pump and dump scheme—where entities artificially inflated the price and volume of a stock through deceptive means, induced retail investors to buy at inflated prices based on false representations and then offloaded their holdings for wrongful gains. SEBI held that these acts violated the fundamental principles of market fairness and transparency and constituted a serious breach of the integrity of the securities market.
Accordingly, SEBI directed multiple remedial and punitive actions. The principal actors involved in creating and uploading the misleading YouTube videos, including individuals like Manish Mishra, Nirmal Jain, and Ramesh Mishra, were restrained from accessing the securities market for specific periods and prohibited from engaging in any form of buying, selling, or dealing in securities, directly or indirectly. The entities such as Sharv Properties Pvt. Ltd. and other trading entities that carried out manipulative trades were also debarred and ordered to disgorge the unlawful gains they had made from the sale of shares during the manipulated price period. The disgorgement orders were accompanied by directions to deposit the amounts in an escrow account with SEBI, with interest calculated from the date of the last fraudulent trade.
[Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992, WTM/AB/ISD/ISD-SEC-5/31442/2025-26, decided on 29-05-2025]
