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SEBI has banned former CNBC Awaaz anchor Pradeep Pandya from the stock market for 5 years.
Securities and Exchange Board of India i.e. SEBI has imposed a fine of Rs 1 crore each on former CNBC Awaaz anchor Pradeep Pandya and technical analyst Alpesh Vasanji Furia. Apart from this, he has also been banned from the security market for five years.
SEBI has also imposed a fine of Rs 10 lakh each on six others and has also banned them from the securities market for 5 years. These six are – Alpesh Furia (HUF), Alpa Furia, Manish Furia, Manish Furia (HUF), Mahan Investment and Toshi Trade.
Pradeep Pandya used to give buying advice in stocks on CNBC Awaaz.
Why fine imposed: Fine imposed for fraud in trading
This fine has been imposed on him for committing fraud in trading. SEBI said that Pradeep Pandya used to share his information with Alpesh Furia before giving stock advice on CNBC. In such a situation, Alpesh Group companies used to buy the stock even before the advice.
How the fraud was detected: analyzed the movement of the stock
Ashwani Bhatia, whole-time member, SEBI, says, ‘The order cites several examples where a surge in share price and volume was seen immediately after the stock recommendation was broadcast on CNBC Awaaz.
To investigate, SEBI analyzed the movement just before and 15 minutes after Pradeep Pandya’s stock recommendation. SEBI found that after stock recommendation on TV, there was a sharp jump in the volume of that stock and the price also increased…
- On June 11, 2020, in Pandya’s Funda show at 9:35 am, he advised to buy Fairchem. Within 15 minutes the trading volume of this stock increased by 642.81%. The share price also increased by 2.18%.
- On June 10, 2020, Pradeep Pandya advised to buy Jindal Poly in his show at 2:29 pm. Within 15 minutes the trading volume of this stock increased by 922.15%. The share price also increased by 3.40%.
- On June 9, 2020, Pradeep Pandya advised to buy Godfrey Phillips India in his show at 2:16 pm. Within 15 minutes the trading volume of this stock increased by 733.32%. The share price also increased by 0.45%.
SEBI has shared this screenshot of the channel in the PDF of its order.
How much profit was earned and how: Rs 5.35 crore profit was earned from synchronized trade.
Alpesh Furia earned a profit of Rs 6.74 crore from trading. Out of this, 79.3% i.e., profit of Rs 5.35 crore was earned from synchronized trade. That is, earned together with Pradeep.
Alpesh was already aware of the stock advice that Pradeep Pandya used to give on TV. Therefore, Alpesh used to buy stocks in advance and earn profits from the rise in shares after the advice.
What is the rule: You cannot profit from information that is not available to the public.
SEBI said that when TV anchors indulge in sharing such information which is not available to the public, it not only violates ethical standards but also distorts market dynamics. Such acts give unfair advantage to some people.
SEBI said that this weakens the principle of equal access to information. There could be a huge loss of confidence among investors. Investors may feel that the market is being rigged. These trades were made between November 1, 2019 and January 13, 2021.
Pandya was the anchor till 2021, Furia was the external expert.
Pandya was the host and co-host of various shows on CNBC Awaaz until August 2021. Furia used to appear on television channels as a guest and external expert. He also used to make stock recommendations through his X handle.
