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    SEBI bans former news anchor for fraudulent trading activities

    The Securities and Exchange Board of India (SEBI) on June 11 issued an order banning the former TV anchor of a Hindi business news channel, Pradeep Pandya, and a frequent guest on his show Alpesh Furiya from buying, selling, or dealing in securities, either directly or indirectly as well as providing any advice about the stock market due to their coordinated fraudulent trading activities. Pandya and Furiya have been charged a penalty of Rs.1 crore individually, while Furiya’s multiple trading entities have been fined a collective of Rs. 60 lakhs.

    Pandya, the host of CNBC-Awaaz’s popular show ‘Pandya ka Funda,’ gave stock recommendations to viewers where Furiya, a stockbroker, appeared as a technical analyst. According to SEBI, a close relationship was found between Pandya’s recommendations and a majority of Buy Today, Sell Tomorrow (BTST) and Intraday trades conducted by Furiya and the multiple trading entities he was involved with.  The order noted that Furiya profited up to Rs. 5.35 Crore, representing 79.3% of his total profit from these synchronized trades.

    Following an investigation, SEBI concluded that Pandya disclosed his recommendations to Furiya before airing them on his show. Furiya would then trade and profit from the subsequent increase in stock prices due to viewer purchases

    The order said, “Pradeep Pandya, while serving as an anchor for CNBC Awaaz shared confidential information regarding upcoming stock recommendations with Alpesh Furiya and vice-versa. Furiya, capitalizing on this privileged information, executed trades through his accounts and those of related entities, positioning himself to profit before the recommendations were publicly aired.”

    SEBI said that the case in many aspects is “similar to a classical front running case where a trader tries to take advantage of the expected price change resulting from an impending transaction in securities” and that the parties had “a clear intent to leverage insider information.”

    SEBI also found evidence of both parties sharing information regarding the stock recommendations through WhatsApp chats.

    In a statement, Furiya admitted that he gave a former employee Opu Funikant Nag several trading calls instead of his salary, which coordinated with Pandya’s stock recommendations.

    SEBI emphasizes the responsibility of journalists:

    SEBI noted the influence of financial journalists, including anchors appearing on business news channels, over viewers who trust them with their financial decisions. It noted that journalists are viewed as trusted disseminators of market information to the public and commented “Their insights, analysis, and recommendations are often taken at face value by a broad audience of investors who rely on this information to make investment decisions.”

    Thus, it stated that TV anchors sharing inaccurate information can hurt market dynamics leading to a lack of trust In the system. It said:

    “When TV anchors engage in sharing material non-public information, as noted in this case, it not only breaches ethical standards but also distorts market dynamics. Such acts of selective information dissemination give unfair advantages to a few, undermining the principle of equal access to information. This erosion of trust can lead to a significant loss of confidence among investors, who may feel that the markets are rigged against them.”

    In the past, SEBI has banned another CNBC Awaaz host Hemant Ghai, and his wife for partaking in activities similar to Pandya, with the exception that he would buy stocks in his wife’s and mother’s name before giving recommendations on his show, to profit from the expected increase in stock price.

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    The post SEBI bans former news anchor for fraudulent trading activities appeared first on MEDIANAMA.

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