The Securities Appellate Tribunal (SAT) on March 17 reserved its order on an appeal filed by actor Arshad Warsi and others against an interim order that bars him and 31 others from accessing the financial markets in connection with a YouTube-run share pump-and-dump operation revolving around a company named Sadhana broadcast.
The Securities and Exchange Board of India (SEBI) in its interim order had held that Warsi made a profit of Rs 29.43 lakh while his wife Maria Goretti Warsi bagged Rs 37.56 lakh. Sebi had directed the impounding and retaining of profits made by the actor couple as well as other accused in the case. These gains were made between April 27 to September 30 last year.
The couple, along with others named in the case, were directed to deposit the impounded amount in a scheduled bank in 15 days with a lien created in favour of SEBI. They were also 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".
Warshi's counsel argued before the SAT that the actor and his wife did not appear in any of the YouTube videos, and never promoted them. However, reportedly, they did confirm their connection with Manish Mishra, the alleged linchpin of the operation.
Sebi, on the other hand, argued that the two purchased shares before the video was published and consequently played the role of volume creators.
Earlier in March, when news of SEBI's action against the actor Arshad Warsi went viral on social media, Warsi had tweeted, urging people not to "believe everything you read in the news".
He defended himself saying, "Maria and my knowledge about stocks is zero. We took advice and invested in Sharda, and like many others, we lost all our hard-earned money."
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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” are accused of peddling false and misleading news recommending investors to buy stocks of Sadhna Broadcast Limited for extraordinary profits.
Subsequent to the release of the misleading videos on these channels there was an increase in the price and trading volumes of the Sadhna scrip. The volumes appear to have been contributed by a large number of retail investors likely influenced by the misleading YouTube videos.
During this period, certain promoter shareholders, key management personnel of Sadhna and non-promoter shareholders, who held more than 1 percent of shareholding in the company, offloaded a significant part of their holdings at inflated prices and booked profits. Because of such misleading videos, the total number of retail investors in the scrip rose from 857 to 55,343.
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