SEBI bans actor Arshad Warsi, wife and 57 Others for 1-5 years over share manipulation scam

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Markets regulator Sebi has banned Bollywood actor Arshad Warsi, his wife Maria Goretti, and 57 other entities from participating in securities markets for periods ranging from one to five years. This decision comes after an investigation found their involvement in a scheme promoting shares of Sadhna Broadcast through misleading YouTube videos.

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Fines and Market Ban

Arshad Warsi and his wife were fined ₹5 lakh each and barred from trading in the securities market for one year. Sebi also imposed penalties ranging from ₹5 lakh to ₹5 crore on 57 other individuals and companies, including promoters of Sadhna Broadcast, now called Crystal Business System Ltd. Additionally, all 59 entities have been directed to return illegal profits totaling ₹58.01 crore, along with 12% interest per annum, calculated from the end of the investigation period until full payment.

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Details of the Manipulation Scheme

Sebi’s 109-page order revealed that the scheme was carefully planned and executed in two phases. Initially, connected entities conducted coordinated trades among themselves to artificially inflate Sadhna Broadcast’s share price. Due to low liquidity, even small trades significantly impacted the price.

The second phase involved releasing promotional videos on YouTube channels like Moneywise, The Advisor, and Profit Yatra. These videos falsely promoted Sadhna Broadcast as a lucrative investment, misleading retail investors into buying shares. The entire operation was described by Sebi as a “pump-and-dump” scheme, where prices were pushed up through fake trading activity and hype, followed by promoters selling off their shares for profit.

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Key People Involved

Sebi identified several key masterminds behind the operation, with others playing supporting roles by facilitating trades and accounts to help the manipulation. The investigation also highlighted individuals involved in executing the scheme.

This crackdown by Sebi aims to protect investors from fraudulent market practices and maintain fairness in securities trading.