SEBI takes action against individuals using YouTube channel to manipulate stock prices

Capital markets regulator SEBI has cracked down on two YouTube channels, passing interim orders against those that used these channels to manipulate stock prices and make illegal gains.

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 the two stocks.

SEBI’s interim orders came after its investigation basis complaints that alleged certain individuals were using YouTube to make certain stock recommendations, putting up false content backed by paid marketing campaigns and luring investors. Once investor’s bought the stock and the stock price went up, those accused offloaded their holding at an inflated price, in the process, these individuals made illegal gains.

The total amount of illegal gains that these individuals made from the Sadhna Broadcast Limited stock is over Rs 41 crore and over Rs 12 crore from Sharpline Broadcast Limited

SEBI observed in one instance, in the case of Sharpline, the number of small shareholders increased from 517 to 20,019 in a period of a few months. Whereas in the case of Sharda Broadcast the number of small shareholders increased from 2167 to 55,343.

SEBI also noted that in one instance, both the YouTube channels recommended the same stock. The order says “there is a high probability that the creators of the said YouTube channels may execute the same modus operandi vis-à-vis other scrips also.

All those named in SEBI’s order have been banned from the securities market. The liability of the illegal gains is to be borne by the individuals. YouTube has also been directed to take down the videos.

Bollywood actor Arshad Warsi and his wife Maria Goretti Warsi have also been penalised in relation to the case.