Arshad Warsi, wife get relief from SAT in YouTube pump-and-dump case

Arshad Warsi

The Securities and Appellate Tribunal (SAT) delivered some much-sought-after relief to actor Arshad Warsi and his wife, author and chef Maria Goretti Warsi when it partially set aside the "strong and harsh" order passed by the market regulator in a case revolving around an alleged YouTube pump-and-dump scheme.

Warsi's brother Iqbal Warsi, as well as his talent manager Aahuti Mistry, have also received relief from the SAT.

The SAT observed that the SEBI order was 'bereft of any evidence' against Warsi and others that required the passing of such a strong and harsh order.

"We, however, find that there is an admission of the appellant
Arshad Warsi that he is connected with noticee no. 1 (Manish Mishra) who is alleged to have been the main player in promoting the videos and thereby misleading the investors. Investigations are still going on and the possibility of the appellants being involved in the manipulative
scheme cannot be ruled out. However, at this stage, the impugned order is bereft of any evidence against the appellants requiring passing of such strong and harsh order," the SAT said.

Warsi told the SAT that he knew Manish Misra as he had given him a movie assignment.

The SAT has served a bunch of findings that would make  SEBI's task of establishing Warsi and his wife as "volume creators" all the more challenging. Some of them are:

• Warsi and others are not involved in the increase in the price of the scrip in patch 1, i.e., between April and July 2022 nor are involved in the increase in the price of the scrip in patch 2 from July to September 2022.
• They were not involved in the making/distribution or uploading of the videos on the YouTube channels nor do they feature in such videos.
• There is no finding that they are connected to the company, its shareholders or key managerial personnel.
• They have not spread any false and misleading information regarding the scrip in question nor is there any evidence to indicate that the Warsis and others had induced unsuspecting investors to buy the scrip in question.

Earlier in March, SEBI had cracked the whip on Warsi and his family by penalising them in relation to the case, where a nexus of players were accused of making illegal gains worth Rs 41.85 crore.

According to the market regulator's calculation, Warsi made a profit of Rs 29.43 lakh while his wife bagged Rs 37.56 lakh. SEBI has directed the impounding and retaining of profits made by the couple as well as other accused in the case. These gains were made between April 27 to September 30 last year.

Further, the market regulator has barred them from further accessing the markets. The couple, along with others named in the case, had been directed to deposit the impounded amount in a scheduled bank in 15 days with a lien created in favour of SEBI. They had also been directed "not to dispose of or alienate any assets, whether movable or immovable or create any interest or charge on any of such assets held in their name".

The case involves two YouTube channels run by one Manish Mishra, who was allegedly part of a larger nexus manipulating the share prices of Sadhna Broadcast Limited and Sharpline Broadcast. The two channels- “The Advisor” and “Moneywise” were accused of peddling false and misleading news recommending investors to buy stocks of Sadhna Broadcast Limited for extraordinary profits.