Sebi bans 15 persons from securities markets for three years; gives a fine of Rs 3.6 cr

New Delhi, Sebi on Thursday barred 15 persons from the securities markets for three years and imposed a total fine of Rs 3.6 crore for manipulating shares of Unison Metals through misleading stock recommendations circulated on telegram channels. Moreover, the regulator directed ten persons to spend illegal profits of over Rs 3.87 crore, to be credited to Sebi’s Investor Protection and Education Fund within 45 days.

Sebi also imposed a fine of Rs 10 lakh to Rs 1 crore on 15 persons for flouting various regulatory norms.In its 98-page order, Sebi found that Yayaati Hasmukhray Nada, Nirali Nada, Jasavantbhai Patel, Jignesh Pravinbhai Pethani, Nahush Ashvinbhai Shukla, Prajesh A Shukla, Reetaben Ashvinkumar Shukla and Hardik J Patel are closely linked.

“The Notification No. 1 (Yayaati) made investment decisions on behalf of Notification Nos. 2, 6, 7 and 9 (Nirali, Nahush, Prajesh and Reetaben) and also advised Notification No. 4 (Jignesh) on his transactions. Notification No. 1, therefore, played a crucial role in the manipulative scheme.

“Furthermore, the scheme could not have happened without Notification Nos. 12 and 13 (Jalaj Agrawal and Arvind Shukla), who played a crucial role in disseminating the recommendations in UML’s scrip, thereby attracting investors into the scrip,” Sebi’s regular member Amarjeet Singh said in the order.

Jalaj was instrumental in determining the price at which the recommendations should be placed in the scrip by Arvind Shukla. Shailesh S Patel was the link between the enablers and Notice No 12. He also sold the shares of UML held by his son Malay Patel, according to the order. According to Sebi, the net sellers, profit makers and beneficiaries took unfair advantage of the artificially created price and volume spurt and executed their orders at a higher price and earned illegal profits worth over Rs 3.87 crore.

Sebi also found that Tirth Mehta, Uttamchand Chandanmal Mehta (the promoters of UML) and Sharad Ramkrishana Gattani bridged the gap between the net sellers, profit makers, beneficiaries and operators, providing vital information in the form of Benpos and shareholding data.

The regulator also noted that Jalaj and Arvind are serial offenders and had carried out ‘pump and dump’ operations by adopting a similar modus operandi of misusing social media to spread stock recommendations.

The case stemmed from complaints received by Sebi in December 2021 about suspicious stock tips urging investors to buy Unison Metals Ltd (UML) shares. PTI