On Tuesday, market regulator Sebi fined a total of Rs 2.6 crore to seven other firms and banned Pradeep Pandya, who was hosting stock market shows on a television channel, from the securities market for five years for engaging in fraudulent trading operations. In addition to Pandya, the following companies have been prohibited by Sebi: Mahan Investment, Toshee Trade, Alpesh Furiya, Manish Furiya, Alpa Furiya, Alpesh Vasanji Furiya HUF, and Manish V Furiya HUF.
Sebi: Pandya Ka Funda
Up until August 2021, Pandya co-hosted and hosted a number of shows on CNBC Awaaz. In the meantime, Alpesh Furiya made guest appearances on the network and provided stock recommendations on his Twitter account.
Between November 2019 and January 2021, there was a strong link between the intraday trades and buy-sell-morrow trades done by Alpesh Furiya and affiliated businesses and the stock recommendations made by Pradeep Pandya on the show ‘Pandya Ka Funda’.
“Pradeep Pandya, while serving as an anchor for CNBC Awaaz, shared confidential information regarding upcoming stock recommendations with Alpesh Furiya and vice versa,” Sebi stated in its final 55-page ruling.
Alpesh Furiya Uses Confidential Information?
It further stated that Alpesh Furiya used this confidential knowledge to his advantage by using his personal and affiliated companies’ accounts to make trades and position himself for profit before the recommendations were made public. In exchange for a pay raise, the regulator also revealed that Furiya gave Opu Funikant Nag these suggestions.
According to Sebi, this behavior not only shows a blatant intention to take advantage of insider knowledge, but it also indicates a methodical way to take advantage of information asymmetry for one’s own benefit.
The National Stock Exchange sent a report in December 2020 that examined Alpesh Furiya and associated companies’ trading activity. Sebi then conducted additional research on the subject between November 2020 and January 2021.
The Panday Vs Furiya Scenario
After reviewing Pandya and Alpesh Furiya’s call data records, the regulator concluded that Pandya was in a unique position to have information about the suggestions ahead of time.
Pandya sent the information to Alpesh Furiya and other relevant parties, who then traded in a recurring and reliable manner in accordance with the suggestions that Pandya made on his program. The entities broke the rules of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) by engaging in such deals.
Consequently, Pandya, Alpesh Furiya, and the other six entities have been barred by Sebi from “accessing the securities market and further prohibited from buying, selling, or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner whatsoever, for a period of five years.”.
Sebi Takes Action
Additionally, the regulator fined Pandya and Alpesh Furiya Rs 1 crore apiece and the other six businesses Rs 10 lakh apiece. Furthermore, Alpesh Furiya, its associated accounts, and Opu Funikant Nag have been ordered by Sebi to surrender any illegal profits obtained through fraudulent transactions.
Of the Rs 10.73 crore in illicit gains made by Alpesh Furiya and its associated accounts, Rs 8.4 crore have already been seized by Sebi, and the remaining Rs 2.34 crore must be disgorged. Additionally, Opu Funikant Nag has been ordered by the regulator to disgorge Rs. 10.20 lakh in illicit gain.
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