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TMI Blog2024 (8) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... des based on recommendations vis- a-vis their total trades. Further, Table No. 31 also provides the detailed breakup of the profit earned by the Noticee No. 1 to 5 (Guest Expert wise) and number of instances of trades executed based on the sharing of recommendation by Guest Experts. Sharing of profits amongst Noticees - From the screenshots of WhatsApp Chat, it is seen that there are certain messages shared between Nirmal Kumar Soni and Guest Experts which had picture of currency notes in them (highlighting the serial number of the note). Further, in the statements recorded on January 19, 2023 of Noticee Nos. 1, 11, 12, 14 and 15 (produced in the subsequent paragraph), it has been admitted by Guest Experts that they had a profit-sharing arrangement with Nirmal Kumar Soni for sharing their recommendations with Nirmal Kumar Soni prior to giving the recommendations on Zee Business. Some of the Statements also shows that the amount already paid to the Guest Experts in cash and the balance amount to be paid to them by Nirmal Kumar Soni. There was an arrangement between Nirmal Kumar Soni and Guest Experts to share the wrongful gain earned through recommendation based trades. The evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 3 and 4 of PFUTP Regulations. This finding is further strengthened in subsequent paragraphs. The act of Profit Makers in trading in securities on the basis of advance information gives them undue, unfair and illegal advantage over investors who otherwise invested in such securities based on recommendation without being aware of the manipulative scheme entered into by Profit Makers and Guest Experts with the help of Enablers. Thus there is a prima facie case of manipulative, fraudulent and unfair trade practice carried out by Noticees which ultimately generated large amount of unlawful gains (approximately INR 7.41Crore) in the accounts of Noticee nos. 1 to 5. Infact, a thorough analysis of facts and legal position lead me to the conclusion that all the five violations listed earlier at para 148 of this order with respect to Section 12A of the SEBI Act and Regulations 3 4 of PFUTP Regulation have been committed in this case. Noticee No. 15 namely Simi Bhaumik, being a registered Research Analyst, falls under the purview of the RA Regulations. As already been seen that Simi Bhaumik shared her recommendations with Partha Sarathi Dhar (registered as spouse in the AOF provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities laws as mentioned in the below table. Such joint and several liability is restricted amongst those Noticees who made these unfair profits, who enabled certain Noticee to make unfair profits or whose recommendations led to such unfair profits. This amount is arrived at based on Table no 30 where details of unlawful gains made by Profit Makers is computed separately for each of them. The amount of wrongful gain for which the Noticees are jointly and severally liable, is accordingly arrived at the below table no 33. It is clarified that the Noticee mentioned at column no. 1 is jointly and severally liable for the amount of wrongful gains, mentioned at column no. 2, along with Noticees mentioned at column 3. Joint and several liabilities of Noticees mentioned at column no. 3 is restricted to the extent of the amount mentioned against their respective names in Table 30. In addition, Nirmal Kumar Soni is also held as joint and several liable for the amount along with SAAR Commodities, Manan Sharecom Private Limited and Kanhaya Trading Limited for the amount mentioned against their respective names. Ex-parte Interim Order - It is a fit case to pass interim directions to insulate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endations by Guest Experts and trades carried out by Profit Makers based on such advance information 21-81 27 - 65 F. Increase in trade volume as well as positive movement of price in line with the direction of the recommendation 82 - 115 66 - 79 G. Role of Enablers 116 - 117 79-81 H. Summary of profit on intraday trade based on advance information of recommendation 118-131 81-92 I. Sharing of profits amongst Noticees 132-141 92-100 J. Determination of facts 142 - 143 100 - 103 K. Examination of violation of provisions of SEBI Act and regulations made thereunder 144 - 164 103- 117 L. Need for interim ex-parte order 165 - 172 117 - 120 M. Joint and several liability 173 - 174 120 - 122 N. Ex parte interim order 175 - 183 123 - 127 A. Background 1. The present proceedings are emanating from an investigation conducted by the Securities and Exchange Board of India (hereinafter referred to as SEBI ), to examine high correlation between the trading activities of Noticees Nos. 1 to 5 and the stock recommendations given by Noticees Nos. 11 to 15, who were guest experts featuring in different shows broadcasted on the television channel Zee Business (hereinafter referred to as Zee Business ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Forms (AOF) provided by banks; and i) Analysis of relevant material available on Ministry of Corporate Affairs (MCA) website. B. Details of Noticees 5. In order to have a better understanding of the matter and the role played by suspected entities, Noticees have been divided into three categories as per immediately succeeding paragraphs. 6. First category- Profit Makers The first category is Profit Makers which comprises of entities that made profit by executing trades which were allegedly executed based on advance information of stock recommendations given by guest experts. In the extant matter, Nirmal Kumar Soni (Noticee No. 1), Partha Sarathi Dhar (Noticee No. 2), SAAR Commodities Private Limited (Noticee No. 3/ SAAR Commodities), Manan Sharecom Private Limited (Noticee No. 4) and Kanhya Trading Company (Noticee No. 5/Kanhya) have been referred to as Profit Makers . 7. Second category- Enablers The second category comprises of entities that allegedly aided/assisted Profit Makers in making profit based on advance information of stock recommendations of guest experts. This category of entities allegedly provided necessary support/credentials viz. trading accounts/ trading termi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows broadcasted on Zee Business. It is seen that he had over 15,700 followers on X (erstwhile Twitter) during the investigation period. d) Mr. Mudit Goyal (Noticee No. 14) is a SEBI registered Research Analyst at present (not at the time during the investigation period). He provided stock recommendations under the tagline MUDIT KE MUNAFE on shows broadcasted on Zee Business. It is seen that he had a following of over 25,300 followers on X (erstwhile Twitter) during the investigation period. e) Ms. Simi Bhaumik (Noticee No. 15) is a SEBI registered Research Analyst. She provided stock recommendations under the tagline SIMI KE NON STOP SHARES on shows broadcasted on Zee Business. It is seen that while acting as a Research Analyst, she also operated various subscription-based models through which she offered exclusive stock recommendations to her subscribers. Further, it is seen that she had a following of over 26,000 followers on X (erstwhile Twitter) during the investigation period. The analysis of video recordings of broadcasted shows provided by ZMCL revealed that appearance of aforementioned Guest Experts on Zee Business was not restricted to any specific show/time and these Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Ramakant Sharma (Noticee No.8) Client Application Form received from TSP 981XXXX506 SAAR Securities (Noticee No.9) KYC details provided by Bank 982XXXX678 Ramawatar Lalchand Chotia (Noticee No.10) Client Application Form received from TSP 982XXXX880 Kiran Jadhav (Noticee No.11) Client Application Form received from TSP; Statement recording dated January 19, 2023 988XXXX277 Ashish Kelkar (Noticee No.12) Client Application Form received from TSP Statement recording dated January 19, 2023 844XXXX469 Himanshu Gupta (Noticee No.13) Client Application Form received from TSP Statement recording dated January 19, 2023 925XXXX511 Mudit Goyal (Noticee No.14) Client Application Form received from TSP Statement recording dated January 19, 2023 983XXXX790 974XXXX790 Simi Bhaumik (Noticee No.15) Client Application Form received from TSP Statement recording dated January 19, 2023 12. Further, based on the material/information collected from MCA website, etc., AOF/ KYC details received from banks, CAF received from TSP etc., preliminary connection amongst the Noticees have been observed as below- 12.1. Nirmal Kumar Soni (Noticee No. 1) is designated as the Authorized Signatory and a Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the gallery of phone seized during the search and seizure. Further, during the statement recording on January 19, 2023 of Kiran Jadhav, the following was inter alia stated by him: 52. From 2021, how many times Soni has met you and in which locations? Ans: Thrice in Poona, once in Jaipur and once in Dubai (whole trip was sponsored by Nirmal Soni). Apart from the above locations I haven t met them. b. On analysis of Telegram chats between Ashish Kelkar (988XXXX277) and Kiran Jadhav (982XXXX880) dated April 18, 2022, it is noted that Nirmal Kumar Soni had visited both Kiran Jadhav and Ashish Kelkar in Pune on April 18, 2022. Further, Nirmal Kumar Soni, vide Telegram chat dated April 28, 2022, had shared e-visa (of Ashish Kelkar) and vide chat dated May 06, 2022, he had shared hotel booking details (for Kiran Jadhav). From Nirmal Kumar Soni s phone gallery, photos of a trip to Dubai have been retrieved in which he was accompanied by Ashish Kelkar, Kiran Jadhav and Nitin Chhalani. c. Investigation also revealed that Nirmal Kumar Soni possessed another number (931XXXX971) through which he communicated with Rutvik Jadhav (772XXXX688), who is the son of Kiran Jadhav. d. Based on the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from phone) shared between them have been analysed and it is observed that in one of the Whatsapp chats dated May 17, 2022, Nitin Chhalani had requested Nirmal Kumar Soni to get the password reset for MXX96 (which is short for Client Code N_1XX81_MXX96 that is associated with Kanhya Trading Company), and the same was done by Nirmal Kumar Soni. The screenshot of the said whatsapp has been illustrated below: Illustration No. 3 c. It is observed that the client code was provided by the Stock Broker- Motisons Shares Pvt. Ltd. where Nirmal Kumar Soni used to work till July 2022, as inter alia mentioned in his statement recorded on January 19, 2023. d. It is also observed that vide WhatsApp chat dated July 05, 2022, Nitin Chhalani had asked Nirmal Kumar Soni to execute trades in the account of Kanhaya Trading Company held with Motisons Shares Private Limited. Further, it is observed from the multiple WhatsApp chats exchanged between them, that they both had shared passwords of different accounts with each other. e. Analysis of the bank accounts shows that an amount of INR 85 Lakh was transferred from Kanhya Trading Company's bank account (HDFC A/c no. 50XXXXXXXXXX70) to Nirmal Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chotia is seen to have instructed Nirmal Kumar Soni to transfer a specific sum to the bank account of SAAR Commodities for 1-2 days due to margin- related issues and the screenshot of the same is depicted herein. Illustration No. 9 f. On analysis of Whatsapp chats of Nirmal Kumar Soni (773XXXX742), it is observed that on July 22, 2022, Nirmal Kumar Soni had received a User ID (25630) and corresponding password from one Mohammed Kammal Anwar (724XXXX882), whose name was saved as SAAR IT on his (Nirmal Kumar Soni) phone. Vide other Whatsapp chats, SAAR IT had shared comprehensive list of User IDs with Nirmal Kumar Soni for his review. Nirmal Kumar Soni also requested the said person to configure the aforementioned ID on his desktop using remote desktop software. As per email dated October 06, 2023 sent by NSE, Mr. Mohammed Kammal Anwar is identified as an employee of SAAR Securities who was responsible for IT related work. Further, it is observed that the User IDs mentioned in the Whatsapp chats belonged to NEAT Terminals of SAAR Securities India Private Limited which is the trading member of SAAR Commodities. The said fact is corroborated with the email dated September 04, 2022 sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g margin issues and transfer of funds to the account of SAAR Commodities. This further shows that Ramawatar Lalchand Chotia was aware about trades being executed by the Noticee No. 1, in the accounts of Noticee No. 3. j. Further, it is seen that Nirmal Kumar Soni was requested by Ramawatar Lalchand Chotia (Noticee No. 10 and Director of SAAR Securities) to square off the positions in SC100 which is the Client Code of SAAR Commodities with SAAR Securities. It can be inferred that the details of the trading account of SAAR Commodities was already available with Nirmal Kumar Soni. k. Further, Ramawatar Lalchand Chotia, being a Director of SAAR Securities, had requested Nirmal Kumar Soni to transfer funds to the bank account of SAAR Commodities for 1-2 days due to margin-related issues. Additionally, the details of the NEAT Terminals of SAAR Securities was shared with Nirmal Kumar Soni and the remote desktop software was also installed in the computer of Nirmal Kumar Soni, by an employee of SAAR Securities (Noticee No. 9). l. Based on the above evidences of connection of Nirmal Kumar Soni with Ramawatar Lalchand Chotia, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma and SAAR Securiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Kiran Jadhav through calls based on CDR; c. Mudit Goyal and Himanshu Gupta are also connected through calls based from CDR and they both have also visited Kiran Jadhav and Ashish Kelkar in Pune. 20. Based on above it is seen that there are evidences which demonstrates connections amongst Noticees. The connection running through the three sets of entities i.e. Noticees can be depicted as per the following illustration. Illustration No. 12 E. Sharing of information in advance about stock recommendation by Guest Experts and trades carried out by Profit Makers based on such advance information. 21. Having seen connection amongst Noticees, I now proceed to take note of evidence of direct/indirect sharing of non-public information regarding recommendations, by Guest Experts to Profit Makers in advance. Thereafter, it needs to be seen whether the said non-public advance information was used for taking positions in scrip/contract in the trading account of Noticee Nos. 1 to 5 (Profit Makers) and whether they were squared off immediately after the said recommendations were broadcasted. 22. Based on analysis of the available records, many instances of sharing of advance information by Gues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sarathi Dhar is husband of Simi Bhaumik (Para 12.2) and there is connection between Simi Bhaumik and Nirmal Kumar Soni (Director and Authorised Signatory of Manan Sharecom Private Limited) (para 15). From the materials gathered in the course of investigation, it has also been seen that Nirmal Kumar Soni is also trading in the option contracts of BALRAMPUR CHINI , in the account of Manan Sharecom Private Limited (Noticee No. 4, where Noticee No. 1 Nirmal Kumar Soni is a Director and Authorised Signatory). 28. The summary of trading activity of Partha Sarathi Dhar and Manan Sharecom Private Limited in the contract BALRAMPUR CHINI SEP Futures and BALRAMPUR CHINI 360 CE, based on advance information from Simi Bhaumik is as follows: Table No. 4 Entity Name Partha Sarathi Dhar Manan Sharecom Private Limited PAN (ASCPD8155H) (AAPCM9816L) Contract Name BALRAMPUR CHINI SEP Futures BALRAMPUR CHINI 360 CE Expiry Date September 29, 2022 Trade Leg First leg of Trade Second leg of Trade First leg of Trade Second leg of Trade Buy Sell Buy Sell Date August 25, 2022 Order Start Time 10:35:24 AM 10:41:56 AM 10:39:47 AM 10:41:35 AM Order End Time 10:39:53 AM 10:41:56 AM 10:39:56 AM 10:44:13 AM Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for SBILife 1080 CE at 12:35 PM on May 20, 2022. The Whatsapp chats exchanged between Simi Bhaumik and Mudit Goyal are shown below- Screenshot no. 4 32. For the purpose of assessing whether the above information was just a sharing of information between Guest Experts in the ordinary course of their business of giving stock recommendations or the same was used for some other purposes, an analysis of the trades executed by Partha Sarathi Dhar (husband of Simi Bhaumik) on May 13, 2022 and May 20, 2022 has been carried out, which revealed the following- Table No. 5 DATE SYMBOL INSTR TYPE BUY QTY BUY VALUE BUY TRADE START TIME SEL L QTY SELL VALUE SELL TRADE END TIME Reco Time 13-May- 22 COROMA NDEL FUTS TK 625 5,66,250.00 12:44:28 625 5,67,531.25 12:46:41 12:46 20-May- 22 SBILIFE FUTS TK 2,250 24,32,437.50 12:36:42 2,250 24,33,900 12:48:35 12:48 33. On assessing the sequence of above events, it is seen that Simi Bhaumik received recommendations in advance from Mudit Goyal and in turn she passed on the information to her husband Partha Sarathi Dhar, who then executed trades based on receipt of those recommendations. It can further be seen that the trading activities/ decisions of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he seized devices show that the information regarding above mentioned recommendation was shared by Simi Bhaumik (974XXXX790) with Partha Sarathi Dhar (974XXXX921) at 02:04 PM indicating it to be a forthcoming recommendation from Mudit Goyal, to be broadcasted on Zee Business. Screenshot no. 7 38. In order to assess whether the advance knowledge of the recommendation was used for the purpose of making trades, an analysis of the trades executed by SAAR Commodities Private Limited and Partha Sarathi Dhar in CHAMBLFERT revealed as under: Table No. 6 DATE 22-Jun-22 SYMBOL CHAMBLFERT PAN AAJCS7343G ASCPD8155H Client Name SAAR Commodities Private Limited Partha Sarathi Dhar INSTRUMENT TYPE OPTSTK FUTSTK OPTION TYPE PE FF STRIKE PRICE 280.00 270.00 0.00 EXPIRY DATE 30-Jun-2022 BUY QTY 45,000 60,000 6,000 BUY VALUE (in lakhs) 4,65,825 3,55,275 16,62,975 BUY TRADE START TIME 14:00:20 14:00:34 - BUY TRADE END TIME - - 15:01:35 SELL QTY 45,000 60,000 6,000 SELL VALUE (in lakhs) 4,92,675.00 3,75,525.00 16,66,200.00 SELL TRADE END TIME 14:15:54 14:15:15 - SELL TRADE START TIME - - 14:09:30 Recommendation Time ~14:10 39. From the above, it can be seen that the sell recommendation pertaining to CH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Nitin Chhalan) as seen at para 16. Further, Nirmal Kumar Soni was also having login credential of Kanhya Trading Company, in whose account the trade was executed. The trading details, as analysed, are as follows: Table No. 7 DATE SYMBOL OPTION TYPE STRIKE PRICE PAN Client Name BUY QTY BUY VALUE (in lakhs) BUY TRADE START TIME SELL QTY SELL VALUE (in lakhs) SELL TRADE END TIME Reco Time 18-Aug-22 INDIA CEM CE 200 AAXFK5345H Kanhya Trading Company 1,97,200 11.13 12:45:05 1,97,200 11.31 12:52:07 12:51 44. On the basis of the foregoing, it is seen that advance knowledge of the non-public information pertaining to the recommendations was shared amongst Simi Bhaumik, Mudit Goyal and Kiran Jadhav. It can also be seen that the advance information regarding the recommendations of Simi Bhaumik, Mudit Goyal and Kiran Jadhav was shared with Nirmal Kumar Soni, who used various trading accounts including that of Kanhya Trading Company for taking positions in the market and subsequently squaring them off on the same day after the recommendations were broadcasted. 45. Further, in Whatsapp chats of 22 June 2022, a conversation was forwarded by Simi Bhaumik to Partha Sarathi Dhar in which it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e more from him. 49. Similarly, it is noted that Mudit Goyal, in his statement recorded on January 19, 2023, inter alia, stated the following: I Mudit Goyal hereby admitted that I share my Stock Recommendation to , Kiran Jadhav Simi Bhaumik and Ashish Kelkar. We initiate position before appearing to media (Zee Business) and Exit positions after giving calls on Zee Business .. 50. Further, Kiran Jadhav, in his statement recorded on January 19, 2023, inter alia, stated as under: I Kiran Jadhav, do hereby agree that we had given intra day stock recommendations in advance before coming on live television in Zee Business to Mr. Nirmal Soni and he parted some of the profits to us via cash We also used to receive such recommendations from Mr. Mudit Goyal before going live and we used to share these recommendations with Mr. Nirmal Soni .. 51. Further, in the statement of examination on oath of Ashish Kelkar which was recorded on January 19, 2023, the following was inter alia stated by him: Q40. Elaborate your association and arrangement with Nirmal Soni. A40. I used to pass on our own stock recommendations to Nirmal Soni through Telegram chat 30 to 40 seconds before going live on TV. As st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharing of advance information amongst Ashish Kelkar, Kiran Jadhav, Nirmal Kumar Soni and Nitin Chhalani 57. A Telegram chat dated March 16, 2022 between Ashish Kelkar and (988XXXX277) and Kiran Jadhav (982XXXX880) has been retrieved which indicates that they discussed about sharing stocks recommendation with Nirmal Kumar Soni (NS). The screenshot of the said chat is shown below- Screenshot no. 13 58. It is noticed that a whatsapp conversation took place on June 30, 2022 between Nirmal Kumar Soni and Ashish Kelkar. On July 01, 2022 Nirmal Kumar Soni (from his number 773XXXX742). had shared a screenshot of the aforesaid conservation with Nitin Chhalani (977XXXX111). Perusal of the said conversation shared with Nitin Chhalani shows that Ashish Kelkar had informed Nirmal Kumar Soni well in advance about the timings of the appearance of himself and other Guest Experts, referred to as HG and MG (short name for Himanshu Gupta and Mudit Goyal, respectively) in the said conversation. Furthermore, in the same conversation, Ashish Kelkar had also shared details of impending stock recommendations from Himanshu Gupta and Mudit Goyal, with Nirmal Kumar Soni. These original chats/messages were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E 275 AAJCS7343G SAAR Commodities Private Limited 3,36,000 22.72 09:47:46 3,36,000 23.38 09:53:54 09:49 64. It is also noticed that, in addition to the above, the investigation has also gathered information containing multiple chats of Ashish Kelkar sharing certain calculations with Kiran Jadhav, in which there was also a reference of Nirmal (Nirmal Kumar Soni) and HG (Himanshu Gupta). Based on these evidences, followings are observed: 64.1. Ashish Kelkar not only communicated the timings of his appearances on Zee Business to Nirmal Kumar Soni but also shared the schedule of appearances of other Guest Experts, namely Himanshu Gupta and Mudit Goyal. 64.2. Additionally, Ashish Kelkar provided Nirmal Kumar Soni with stock recommendations attributed to Himanshu Gupta and Mudit Goyal. 64.3. Nirmal Kumar Soni (773XXXX742 and 931XXXX971) and Ashish Kelkar (988XXXX277) had deleted relevant chats/messages (with respect to appearance of and stock recommendation given by Guest Experts) from their mobile phones. However, the screenshot of the message (as shown in the Table 9 above) was recovered from the mobile phone number 773XXXX742 of Nirmal Kumar Soni as it was forwarded to Nitin Chhalani. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mal Kumar Soni has already been discussed at para14. Further, connection of Nirmal Kumar Soni with SAAR Commodities has already been discussed at para17. Further, sharing of advance information between Kiran Jadhav and Nirmal Kumar Soni has been discussed at para 50, which have further got the corroboration from trades executed by Profit Maker(s) based on the advance sharing of the recommendation. E.9. Trades of Kanhya Trading Company based on recommendations of Ashish Kelkar 68. It is observed that Ashish Kelkar gave the following recommendation on a show on Zee Business for the scrip GNFC Limited Table No. 17 Scrip/contract Recommendation Date and time of recommendation Buy at (INR) Target Price (INR) GNFC 800CE Buy August 17, 2022 (Around 01:35 PM) 20 minimum Target Price of ₹35 and Stop Loss of ₹17 69. The summary of trading activity of Kanhya Trading Company in the contract of GNFC 800 CE is as follows: Table No.18 Entity Name Kanhya Trading Company PAN (AAXFK5345H) Contract Name GNFC 800 CE Expiry Date August 25, 2022 Trade Leg First leg of Trade Second leg of Trade Buy Sell Date August 17, 2022 Order Start Time 1:34:01 PM 1:36:02 PM Order End Time 1:34:12 PM 1:37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trade Second leg of Trade Buy Sell Buy Sell Date Sep 20, 2022 Order Start Time 2:24:58 PM 2:27:35 PM 2:24:36 PM 2:28:43 Order End Time 2:27:15 PM 2:29:26 PM 2:29:51 PM 2:28:48 Trade Start Time 2:25:04 PM 2:27:35 PM 2:24:36 PM 2:28:44 Trade End Time 2:27:15 PM 2:29:36 PM 2:29:51 PM 2:29:43 Average Price 1.16 1.30 1.11 1.25 Traded Quantity 28,64,000 28,64,000 14,40,000 14,40,000 Total Value Traded (INR) 33,18,400 37,16,800 15,93,600 18,00,000 Client Traded Val to Market Val 2.14% 1.03% Client Traded Val in the select security vis- -vis all securities in the market 4.27% 7.92% Profit 3,98,400 2,06,400 74. From the above, it is observed that SAAR Commodities and Manan Sharecom had initiated their buy orders for PNB 42 CE on September 20, 2022 at 2:24:58 PM and 2:24:36 PM, respectively, just before the recommendation which was telecasted on Zee Business at around 02:27 PM. Further, the sell orders were placed by SAAR Commodities (between 2:27:35 PM and 2:29:26 PM) and Manan Sharecom (2:28:43 PM and 2:28:48 PM) immediately after the said recommendation was aired on Zee Business. It has further been noticed that the buy order by Manan Sharecom had commenced at 2:24:36 PM and continued til ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :54:50 PM 1:06:19 PM Trade End Time 12:56:29 PM 1:07:39 PM Average Price 5.77 7.02 Traded Quantity 2,53,700 2,53,700 Total Value Traded (INR) 14,62,645 17,81,060 Client Traded Val to Market Val 1.5% Client Traded Val in the select security vis- -vis all securities in the market 2.18% Profit 3,18,415 78. From the above, it is seen that SAAR Commodities had initiated the buy orders for HINDCOPPER 105 CE on August 08, 2022 at 12:54:50 PM, just before the recommendation of Mudit Goyal was aired on Zee Business. Further, the said Noticee had squared off the position and placed the Limit sell orders between 1:05:46 PM and 1:07:25 PM and the same were executed between 1:06:19 PM and 1:07:39 PM, which is around the same time as that of the recommendation. In the process, a substantial amount of profit of INR 3,18,415 was earned by the said Noticee through its above-mentioned intraday trade. 79. The connection between Nirmal Kumar Soni and SAAR Commodities Private Limited has been discussed at para 17. Sharing of advance information between Mudit Goyal and Nirmal Kumar Soni has been discussed at para 36-46. 80. The overall sharing of information/ recommendation between Guest Experts and Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpact Post Recommendation Average High/ Low Variation % in preceding 15 mins [t-15] 0.24 0.26 2.26 Average High/ Low Variation % during recommendation time and succeeding 2 mins [t and t+2] 0.48 0.47 3.77 Average High/ Low Variation % in succeeding 15 mins [t+15] 0.29 0.27 2.23 Volume Impact Post Recommendation Avg Trading Vol in Preceding 15 mins [t-15] (number of shares/underlying shares) 35,640 50,987 58,987 Avg Trading Vol during recommendation time and succeeding 2 mins [t and t+2] (number of shares/underlying shares) 1,44,327 2,18,133 2,65,067 Avg Trading Vol for succeeding 15 mins [t+15] (number of shares/underlying shares) 56,221 81,280 90,667 Relevant Price Sensitive Corporate Announcement on the day of the recommendation or the prior day No 85. The analysis of the price impact shows the following- In the preceding 15 minutes before the recommendation, the average high/low price variation was relatively low at 0.24%, 0.26% and 2.26% for BALRAMCHIN (EQ), BALRAMCHIN Sep Futures and BALRAMCHIN 360CE respectively. However, during the recommendation time and the subsequent 2 minutes (t and t+2), there was a significant surge in price volatility, with an average high/low variati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharecom Private Limited based on recommendations of Kiran Jadhav 90. It has been seen at paras 65-67 how SAAR Commodities Private Limited and Manan Sharecom Private Limited acted on the advance receipt of recommendation from Kiran Jadhav under the tagine SPECIAL PICKS on Zee Business for the scrip IndiaMART Limited and made substantial profits, it will be useful to look at the impact of such recommendation on price and volume of the scrip. 91. Analysis of the impact on the price and volume in the contract on being recommended in the show is given below- Illustration No. 16 Table No. 24 Recommendation date September 02, 2022 Recommendation time (t) ~02:15 PM Scrip/Contract Recommended INDIAMART 4600 CE Recommended Levels Recommended Price (INR) 290 Target Price (INR) 580/600 Stop Loss (INR) 240 Price Impact Post Recommen dation Average High/ Low Variation % in preceding 15 mins [t-15] 1.28 Average High/ Low Variation % during recommendation time and succeeding 2 mins [t and t+2] 12.64 Average High/ Low Variation % in succeeding 15 mins [t+15] 5.06 Volume Impact Post Recommen dation Avg Trading Vol in Preceding 15 mins [t-15] (number of underlying shares) 2411 Avg Trading Vol durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off the position after the airing of the recommendation on his shows on the Zee Business. It will be useful to examine the impact of such recommendation on price and volume of the said scrip/derivative contract. 97. Analysis of the impact on the price and volume in the contract on being recommended in the show is given below- Illustration No. 17 Table No.25 Recommendation date August 17,2022 Recommendation time (t) ~01:35 PM Scrip/Contract Recommended GNFC 800 CE Recommen ded Levels Recommended Price (INR) 20 Target Price (INR) 35 Stop Loss (INR) 17 Price Impact Post Recommen dation Average High/ Low Variation % in preceding 15 mins [t-15] 4.14 Average High/ Low Variation % during recommendation time and succeeding 2 mins [t and t+2] 9.45 Average High/ Low Variation % in succeeding 15 mins [t+15] 4.28 Volume Impact Post Recommen dation Avg Trading Vol in Preceding 15 mins [t-15] (number of underlying shares) 60,147 Avg Trading Vol during recommendation time and succeeding 2 mins [t and t+2] (number of underlying shares) 6,31,800 Avg Trading Vol for succeeding 15 mins [t+15] (number of underlying shares) 2,31,313 Relevant Price Sensitive Corporate Announcement on the day of the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le No. 26 Recommendation date September 20,2022 Recommendation time (t) ~02:27 PM Scrip/Contract Recommended PNB 42 CE Recommended Levels Recommended Price (INR) 1.2 Target Price (INR) 2.50/2.75 Stop Loss (INR) 0.8 Price Impact Post Recommendation Average High/ Low Variation % in preceding 15 mins [t-15] 3.61 Average High/ Low Variation % during recommendation time and succeeding 2 mins [t and t+2] 9.72 Average High/ Low Variation % in succeeding 15 mins [t+15] 5.84 Volume Impact Post Recommendation Avg Trading Vol in Preceding 15 mins [t-15] (number of underlying shares) 16,21,333 Avg Trading Vol during recommendation time and succeeding 2 mins [t and t+2] (number of underlying shares) 73,92,000 Avg Trading Vol for succeeding 15 mins [t+15] (number of underlying shares) 25,98,400 Relevant Price Sensitive Corporate Announcement on the day of the recommendation or the prior day No 104. From the above, a sudden spurt in the price and trading volume of the contract can be witnessed right after the broadcast of the recommendation was made on Zee Business. 105. Analysis of price impact shows as under- In the preceding 15 minutes before the recommendation, the average high/low price vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Recommendation Average High/ Low Variation % in preceding 15 mins [t-15] 3.83 Average High/ Low Variation % during recommendation time and succeeding 2 mins [t and t+2] 8.45 Average High/ Low Variation % in succeeding 15 mins [t+15] 3.22 Volume Impact Post Recommendation Avg Trading Vol in Preceding 15 mins [t-15] 98,900 Avg Trading Vol during recommendation time and succeeding 2 mins [t and t+2] 10,40,600 Avg Trading Vol for succeeding 15 mins [t+15] 3,03,580 Relevant Price Sensitive Corporate Announcement on the day of the recommendation or the prior day No 111. From the above, a sudden spurt in the price and trading volume of the contract can be witnessed right after the recommendation was made on Zee Business. 112. Analysis of price impact shows as under- In the preceding 15 minutes before the recommendation, the average high/low price variation was relatively low at 3.83%. However, during the recommendation time and the subsequent 2 minutes (t and t+2), there was a significant surge in price volatility, with an average high/low variation of 8.45%. In the succeeding 15 minutes (t+15) after the recommendation, the average high/low variation stood at 3.22%. 113. Analysis of volu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 3 was being executed by the Noticee no 1, who was in possession of non-public information of recommendations of Guest Experts before being broadcasted. The connection between Nirmal Kumar Soni and Kanhya Trading Company/Nitin Chhalani has been discussed at para 16. Connection amongst Nirmal Kumar Soni, SAAR Commodities and SAAR securities have been discussed at para 17. Detailed discussion at para 16 and para 17 establishes how Enablers (Noticees Nos 6 to 10) helped Noticees Nos 1,3,4 and 5 in their trades based on advance information of recommendations of Guest Experts. 117. In particular, it is seen that the proximity of communication between the Noticee No. 1 and Director of Noticee No. 9, SAAR Securities, were to the extent that the details of the multiple NEAT Terminals of SAAR Securities were voluntarily shared with Nirmal Kumar Soni and the remote desktop software was also installed in the computer of Nirmal Kumar Soni, by an employee of SAAR Securities. This fact itself is an evidence that trades were executed in the account of the Noticee No. 3 with the knowledge, consent and permission of Noticee No.9 (SAAR Securities) and Noticees Nos 7, 8 and 10 (Directors of SAAR S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced below. It is clarified that this is summary of all intraday trades and not necessarily on recommendations based trades covered in this order. Table No.28 Name Partha Sarathi Dhar Kanhya Trading Company SAAR Commodities Private Limited Manan Sharecom Private Limited Nirmal Soni PAN ASCPD8155H AAXFK5345H AAJCS7343G AAPCM9816L BCHPS4866G Equity No of instances 506 16 - - - Gross Traded Value (INR) 1,84,43,07,592 38,33,097 - - - Average Gross Traded Value (INR) 36,44,877 2,39,569 - - - Square off earned (INR) 29,55,636 - - - - Equity Derivative (Excluding Index Contracts) No of instances 1,932 518 3,334 3,752 63 Gross Traded Value (INR) 13,21,15,02,454 1,44,54,92,255 21,38,84,96,844 3,37,37,66,530 7,84,93,608 Average Gross Traded Value(INR) 68,38,252 27,90,526 64,15,266 8,99,192 12,45,930 Square off earned(INR) 30,94,337 2,17,50,479 7,73,78,072 2,33,46,378 14,17,822 Equity Derivative (Index Contracts) No of instances 107 13 1,226 948 - Gross Traded Value (INR) 5,32,63,248 54,02,093 1,91,99,85,210 35,68,05,160 - Average Gross Traded Value(INR) 4,97,787 4,15,546 15,66,056 3,76,377 - Square off earned(INR) -1,06,338 -66,180 49,43,375 13,08,212 - Combined Total No of instances 2,545 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit based on Recommendation (%) (A) (B) (C') (D) (E') (F) = (D/E) (G) (H) (I)=(G/H) (J) = (G/D) (K) = (H/E) (L) = (I/F) 3 SAAR Commodities Private Limited EQ-DERV 8,23,21,447 4,560 18,053 4,37,57,697 506 86,478 53% 11% 479% 4 Manan Sharecom Private Limited EQ-DERV 2,46,54,590 4,700 5,246 1,35,01,336 135 1,00,010 55% 3% 1907% 5 Kanhya Trading Company EQ-DERV 2,16,84,299 531 40,837 1,10,41,979 98 1,12,673 51% 18% 276% 2 Partha Sarathi Dhar EQ-DERV 29,87,999 2,039 1,465 27,15,041 146 18,596 91% 7% 1269% EQ-CASH 29,55,636 506 5,841 26,69,620 156 17,113 90% 31% 293% 1 Nirmal Soni EQ-DERV 14,17,822 63 22,505 4,43,975 6 73,996 31% 10% 329% Total 13,60,21,794 12,399 10,970 7,41,29,648 1,047 70,802 54% 8% 645% 124. Further, profit analysis of Profit Makers from recommendation based trades (Guest Expert wise) during the investigation period is provided below- Table No. 30 PAN Name Guest Expert Segment Profit (INR) Trade Instances AAJCS7 343G SAAR Commodities Private Limited KIRAN JADHAV EQ-DERV 1,41,75,013 113 ASHISH KELKAR EQ-DERV 1,02,00,019 106 HIMANSHU GUPTA EQ-DERV 96,71,340 136 MUDIT GOYAL EQ-DERV 58,74,892 95 SIMI BHAUMIK EQ-DERV 38,36,432 56 SAAR Commodities Private Limited T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od, out of which INR 1,35,01,336, was earned from 135 instances of recommendation based trades. Thus, more than half the profit is earned through recommendation based trading which were only 135 out of total 4700 trades. Further, it is seen that the average profit earned from recommendation based trades is around 1907% of the average profit earned from total trades. 128. In the case of Kanhya Trading Company, it is observed that it had earned a profit of INR 2,16,84,299 through 531 trade instances during the investigation period, out of which INR 1,10,41,979 was generated from 98 trade instances of recommendation based trades. Thus, more than half the profit is earned through recommendation based trading which were only 98 out of total 531 trades. Further, the average profit earned from recommendation based trades is around 276% of the average profit earned from total trades. 129. With respect to the Partha Sarathi Dhar, it is observed that he had earned a profit of INR 59,43,635 through 2,545 trade instances during the investigation period, out of which INR 53,84,661 was generated from 302 instances of recommendation based trades. Thus, 91% of his entire profit is from trade based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trades that are observed to have been executed based on the advantage of advance receipt of information about recommendations of Guest Experts, the Noticees have collectively earned substantial profit to the tune of INR 7,41,29,648 from 1047 instances, constituting 54% of the total profit earned during the relevant period. From the above, it can be seen that a considerable portion of their respective profit was earned through trades based on recommendations vis- a-vis their total trades. Further, Table No. 31 also provides the detailed breakup of the profit earned by the Noticee No. 1 to 5 (Guest Expert wise) and number of instances of trades executed based on the sharing of recommendation by Guest Experts. I. Sharing of profits amongst Noticees 132. It is also seen from evidence collected that some of the Noticees had shared chats which indicated commission/profit sharing arrangements between Guest Experts and Nirmal Kumar Soni. The same can be corroborated from the various Whatsapp chats/Telegram chats amongst certain Noticees as well as the statements of certain Noticees recorded on January 19, 2023. These have been discussed at paras 47-52. Further, certain Telegram chats betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at between Ashish and Lalu , image of one INR 10 note is exchanged between Ashish and Lalu with a mention of a name along with mobile number as Mr Goyal -925XXXX511 It is to be noted from preceding paragraphs that same mobile number (i.e. 925XXXX511) belongs to Mudit Goyal and it is probable that the image or the Note was used to receive his (Mudit Goyal s) share of the profit/commission. 5 Nirmal(773XXXX742) WhatsApp Chat and Uncl New (+4475XXXXX587) In the WhatsApp chat dated Aug 05,2022, Nirmal shared image of a note of INR 1 with Uncl New inter alia mentioning Kolkata tomorrow 11am. On analysis of CDR of Nirmal Kumar Soni and Simi Bhaumik, it was observed that they both met in Kolkata on Aug 06, 2022 after 11 am. 135. From the above screenshots, it is seen that there are certain messages shared between Nirmal Kumar Soni and Guest Experts which had picture of currency notes in them (highlighting the serial number of the note). Further, in the statements recorded on January 19, 2023 of Noticee Nos. 1, 11, 12, 14 and 15 (produced in the subsequent paragraph), it has been admitted by Guest Experts that they had a profit-sharing arrangement with Nirmal Kumar Soni for sharing their r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which they would later share with me .25% from Kiran Jadhav/ Ashish Kelkar. All profit part I received in cash . 139. In the statement of examination on oath of Simi Bhaumik, which was recorded on January 19, 2023, the following was inter alia stated under oath: Further, I am also having profit-sharing arrangement (50:50) with Nirmal Kumar Soni (Jaipur, mobile no- 773XXXX742) starting from June 2021, whereby I share my recommendations with Nirmal prior to me giving stock recommendations on Zee Business and Nirmal Soni trades on my recommendations. I have already received around Rs. 75 lakhs in cash from Nirmal Soni till June 2022 while approximately Rs. 1 crore is still left to be received .. 140. In the statement of examination on oath of Nirmal Kumar Soni, which was recorded on January 19, 2023, the following was stated under oath with reference to Simi Bhaumik: 141. From the above, it is seen that there was an arrangement between Nirmal Kumar Soni and Guest Experts to share the wrongful gain earned through recommendation based trades. The evidence in the form of statement further shows the arrangement entered into amongst Profit Makers and Guest Experts that profit earned throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of non-public information about the recommendations given by Guest Experts on the shows. The scheme involved Guest Experts to share, directly or indirectly, their recommendations with Nirmal Kumar Soni and Partha Sarathi Dhar, before the same were broadcasted on Zee Channel. The exact timings of the shows were also shared among the Guest Experts and Noticee Nos. 1 and 2. e) Based on the prior possession of this non-public information, Noticee No. 1 and 2 placed the first leg of orders in the same scrip/contract (first- leg of the trade) through the trading account of Noticee Nos. 1 to 5, before the telecast of the recommendations made by Guest Experts. Thereafter, the Noticees squared off the position (second leg of the trade) immediately around the time or after the recommendations were telecasted on the shows, thereby earning significant profits from the favourable movement in price and volume of the scrip/contract. f) The Enablers (Noticees Nos. 6 to 10) provided log-in credentials/ trading accounts/ client codes and passwords/ NEAT terminal details of broker etc. and enabled trades to be executed in the account of Noticees Nos. 3, 4 and 5 by the Noticee No. 1. g) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which is under investigation; . Power to issue directions and levy penalty. 11B. Save as otherwise provided in section 11, if after making or causing to be made an enquiry, the Board is satisfied that it is necessary, (i) in the interest of investors, or orderly development of securities market; or (ii) to prevent the affairs of any intermediary or other persons referred to in section 12 being conducted in a manner detrimental to the interest of investors or securities market; or (iii) to secure the proper management of any such intermediary or person, it may issue such directions, (a) to any person or class of persons referred to in section 12, or associated with the securities market; or (b) to any company in respect of matters specified in section 11A, as may be appropriate in the interests of investors in securities and the securities market. Explanation. For the removal of doubts, it is hereby declared that the power to issue directions under this section shall include and always be deemed to have been included the power to direct any person, who made profit or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or regula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under 4. Prohibition of manipulative, fraudulent and unfair trade practices (1) Without prejudice to the provisions of regulation 3, no person shall indulge in a manipulative, fraudulent or an unfair trade practice in securities markets. (2) Dealing in securities shall be deemed to be a manipulative fraudulent or an unfair trade practice if it involves any of the following: (d) inducing any person for dealing in any securities for artificially inflating, depressing, maintaining or causing fluctuation in the price of securities through any means including by paying, offering or agreeing to pay or offer any money or money's worth, directly or indirectly, to any person;] (o) fraudulent inducement of any person by a market participant to deal in securities with the objective of enhancing his brokerage or commission or income SEBI (Research Analyst) Regulations, 2014 Regulation 2(1)(c) associate means an associate as defined in Securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct or rules or regulations; or (v) dealing in securities which is manipulative, fraudulent or an unfair trade practice. 149. It may be pointed out that violation of any one of the above violations listed in immediately preceding paragraph would result in the violation under the SEBI Act and PFUTP regulations. Though in a particular case there may be more than one violations due to overlapping natures of these violations. 150. In the earlier part of this order, it has been examined and demonstrated with evidence that how Noticees have, prima facie, devised/employed a scheme where Guest Experts, before making recommendations on Zee Business, communicated such information amongst each other and also with Profit Makers in advance. These Profit Makers than engage in executing first leg of trade just before the recommendation to be aired and then after recommendation has been aired, close the position with the second leg of transaction and in the process, the Profit Makers have earned profit to the tune of INR 7.41 Crore during the investigation period. This profit is, prima facie, unlawful since Noticees No 1 to 5 had got advanced information, directly or indirectly, about the impending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ordinary operation of market forces of supply and demand to make unlawful gains for themselves. Thus, this would prima facie qualify as manipulation and the scheme that they devised would qualify as manipulative scheme. 152. In this regard, reliance is placed on the observations of Hon ble SC in the matter of SEBI and Ors. vs. Shri Kanaiyalal Baldevbhai Patel and Ors. (2017 SCC Online SC 1148), wherein the Hon ble Court held as follows: 31. Although unfair trade practice has not been defined under the regulation, various other legislations in India have defined the concept of unfair trade practice in different contexts. A clear cut generalized definition of the unfair trade practice may not be possible to be culled out from the aforesaid definitions. Broadly trade practice is unfair if the conduct undermines the ethical standards and good faith dealings between parties engaged in business transactions. It is to be noted that unfair trade practices are not subject to a single definition; rather it requires adjudication on case to case basis. Whether an act or practice is unfair is to be determined by all the facts and circumstances surrounding the transaction. In the context o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... integrity . 155. In this case as well, it has been seen how the practice adopted by Noticees in cohesion does not conform to the fair and transparent principles of trades in the stock market. These practices are against the interest of investors who act on the basis of recommendations of Guest Experts. Hence, such practices are held prima facie as unfair trade practices. 156. At this stage, it is pointed out that in various instances, the Hon ble Courts have underscored the need to curb the manipulative and unfair trade practices in the securities market. In one of such cases, the Hon ble Supreme Court, in the matter of N Narayanan vs. Adjudicating Officer, SEBI decided on April 26, 2013, while dealing with the concept of market abuse in securities market has inter alia held as follows: Prevention of market abuse and preservation of market integrity is the hallmark of Securities Law. Section 12A read with Regulations 3 and 4 of the Regulations 2003 essentially intended to preserve market integrity and to prevent Market abuse . The object of the SEBI Act is to protect the interest of investors in securities and to promote the development and to regulate the securities market, so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nos. 1 to 5. Infact, a thorough analysis of facts and legal position lead me to the conclusion that all the five violations listed earlier at para 148 of this order with respect to Section 12A of the SEBI Act and Regulations 3 4 of PFUTP Regulation have been committed in this case as under: (i) There is use of or employment of fraudulent/manipulative or deceptive device or contrivance, in contravention of the provisions of the SEBI Act or rules or regulations, as discussed earlier, by Noticees. (ii) There is employment of device scheme or artifice to defraud investors, as discussed earlier, by Noticees. (iii) There is engagement in act, practice, course of business which operated as fraud or deceit upon investors in contravention of the provisions of the SEBI Act or rules or regulations, as discussed earlier, by Noticees. (iv) There is dealing in securities by Noticees Nos. 1 to 5 (Profit Makers), while in possession of material or non-public information in the form of advance information about recommendation to be made by Guest Speakers. Such non-public information has been communicated, directly or indirectly, by Noticees Nos. 11 to 15 (Guest Experts) to other Noticees Nos. 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 12A(a), 12A (b), 12A(c), and 12A(e) of SEBI Act, Regulations 3(a), 3(b), 3(c), 3(d) and 4(1) of SEBI (PFUTP) Regulations; (iii) Noticees Nos. 11 to 15 (Guest Experts) have violated provisions of sections 12A(a), 12A (b), 12A(c), and 12A(e) of SEBI Act, Regulations 3 (a), 3(b), 3(c), 3(d), 4(1) and 4(2)(o) of SEBI (PFUTP) Regulations K.2. Violation of Regulation 2(1)(c) and Regulation 16(2) of SEBI (Research Analyst) Regulations 2014 read with Regulation 2(1)(b) of SEBI (Intermediaries) Regulations 2014: 164. In addition to the above, it is observed that the Noticee No. 15 namely Simi Bhaumik, being a registered Research Analyst, falls under the purview of the RA Regulations. It has already been seen that Simi Bhaumik shared her recommendations with Partha Sarathi Dhar (registered as spouse in the AOF provided by Bank) before recommending the same on Zee Business thereby facilitating Partha Sarathi Dhar to trade based on such prior knowledge of recommendations. As can be inferred from the evidence gathered during the investigation, the trading instances of Partha Sarathi Dhar were significantly influenced by the advance information provided by Simi Bhaumik. In this regard, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinary influencers who were issuing their stock recommendations, but all of them were having some expertise which led Zee Business to invite them on its shows. I have also highlighted the large number of followers of these Guest Speakers on social media platform. This has further increased in most cases since the investigation period as under (approximate followers as on date as compared to followers during the investigation period): (I) Kiran Jadhav: from 140.0K to 143.7K (II) Himanshu Gupta, from 15.7K to 19.2K (III) Mudit Goyal, from 25.3K to 25.6K (IV) Simi Bhaumik, from 26K to 25.6K 166. I note that Section 11 of the SEBI Act confers a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market. In a way all these three objects are interlinked. In order to develop the securities market, it is necessary that the interest of investors is protected. Any manipulation in the market would adversely impact the interest of investors. This would result in loss of trust of these investors in the securities market impacting market integrity. A robust securities market is important for the growth and develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investors to take their own decision. Most of the experts fall in this category and are doing a very good job which has resulted in robust securities market that we have today. However, the same cannot be said about a few other experts who take advantage of their mass following to make unfair profits by misguiding innocent investors. 170. It is necessary for investors to exercise due diligence while listening to such experts on TV or on social media. There are many orders passed by the SEBI which has highlighted how these platforms are used by some of these experts to implement fraudulent and unfair schemes like front running, pump and dump, etc. Often many investors become victim of such schemes and have lost money. Hence, investors should exercise due diligence. If any expert promises that this particular scrip/contract will definitely rise and guarantees an assured return in short time, an immediate question should come to the mind as to why the expert is not using that information quietly to make profits for himself? It should be seen by investors whether that expert is registered with SEBI as research analyst? If no, whether he is violating the law and misguiding investors? If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generated from the trades which are not in conformity with the provisions of securities laws as mentioned in the below table. Such joint and several liability is restricted amongst those Noticees who made these unfair profits, who enabled certain Noticee to make unfair profits or whose recommendations led to such unfair profits. This amount is arrived at based on Table no 30 where details of unlawful gains made by Profit Makers is computed separately for each of them. 174. The amount of wrongful gain for which the Noticees are jointly and severally liable, is accordingly arrived at the below table no 33. It is clarified that the Noticee mentioned at column no. 1 is jointly and severally liable for the amount of wrongful gains, mentioned at column no. 2, along with Noticees mentioned at column 3. Joint and several liabilities of Noticees mentioned at column no. 3 is restricted to the extent of the amount mentioned against their respective names in Table 30. In addition, Nirmal Kumar Soni is also held as joint and several liable for the amount along with SAAR Commodities, Manan Sharecom Private Limited and Kanhaya Trading Limited for the amount mentioned against their respective nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urities, either directly or indirectly, in any manner whatsoever until further orders. b) If the above Noticees have any open position in any exchange traded derivative contracts, as on the date of the order, they can close out /square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. Noticees are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order. c) The said Noticee Nos. 11 to 15 shall preserve the records of their various social media accounts maintained by them, directly or indirectly, till further directions. d) An amount of INR 7,41,29,648/-, being the total unlawful gain earned from the alleged fraudulent and unfair activities is impounded, jointly and severally from Noticee as mentioned in the table 33 above. e) Noticees mentioned in the table no 33 above (1 to 5 and 11 to 15) are directed to credit/deposit jointly/ severally the aforesaid amount of unlawful gains to an interest bearing Escrow Account created specifically for the purpose in a Nationalized Bank and deposit within 15 days fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: a) Direction to disgorge an amount equivalent to the alleged unlawful profits made on account of the scheme as described above, along with interest. b) Directing them to refrain from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period. c) Directing the registered RAs to refrain from undertaking any activity relating to research advisory. 177. Noticees Nos. 1 to 5 and 11 to 15 are further called upon to show cause as to why appropriate penalty under Section 11B(2) and 11(4A) read with Section 15HA of SEBI Act, 1992 should not be imposed on them for the alleged violations of SEBI Act, 1992 and PFUTP Regulations, as the case may be. 178. The Noticee No. 15 is further called upon to show cause as to why appropriate penalty under Section 11B (2) and 11(4A) read with Section 15HB of the SEBI Act, 1992 read with SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 2005 should not be imposed on her for the aforementioned alleged violations of the SEBI (Research Analyst) Regulations, 2014. 179. Noticees Nos. 6 to 10 are called upon to show cause as to why appropriate suitable directions, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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