Sebi bans 19 entities from securities mkt for fraudulent trading in Superior Finlease shares

Capital markets regulator Sebi has barred 19 entities from the securities market for indulging in fraudulent trading in the shares of (SFL) and impounded unlawful gains worth Rs 3.89 crore. The investigation conducted by Sebi led to the collection of various pieces of evidence corroborating the fraudulent activities of these players and such evidence was primarily found from the sources, such as oath statements, bank account statements, trade details, call data records, audio call recordings and Whatsapp chats.

In this case, shares of SFL were first purchased from the market platform and eventually, with the help of the persons operating Telegram Channels, a false recommendation message to buy shares of SFL was floated on such channels, thereby inducing the subscribers there to buy the shares of SFL; and in the whole process, the shares owned by the perpetrator of the scheme through his front entities were dumped and huge profits were earned, Sebi revealed in its order.

“Any person indulging in spreading misinformation or false and misleading information through the use of social media messaging applications like Telegram, Whatsapp etc., which are being used by millions of people can cause irreparable damage to the integrity of the securities market within a short span of time like a forest fire, thereby eroding the confidence of the investors in the securities market in a matter of no time,” Sebi noted.

The regulator, prima facie, found the accrual of large amounts of unlawful profits to the accounts of 14 entities, whom the rest of the other five entities had facilitated and enabled to earn such unlawful gains in their trading accounts.

It noted that the amount of unlawful gains of Rs 2.13 crore earned during the period of February 01, 2021, to September 13, 2021, by manipulating the share price of SFL and an amount of unlawful gains of Rs 1.75 crore generated by way of dumping the shares of SFL on the recommendation day — September 14, 2021.

Accordingly, Sebi has impounded Rs 3.89 crore, jointly and severally, from these entities.

“All the Noticees (19) are restrained from buying, selling or dealing insecurities, either directly or indirectly, in any manner whatsoever until further orders,” the Securities and Exchange Board of India (Sebi) said in its 93-page order passed on January 25.

They have been asked not to dispose of any assets except with the prior permission of Sebi until the impounded amount is deposited in the escrow account.