sebi:WTM/AN/ISD/ISD-SEC-1/28040/2023-24

SEBI · SEBI · 2023-03-02 · Ananth Narayan G., Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Interim Order dated March 02, 2023 confirmed with modifications: Noticee nos. 20 to 24 permitted to sell securities to deposit illegal gains in escrow accounts; Noticee no. 20 permitted to withdraw INR 1,00,000 per month for medical expenses; direction in para 37.7 of Interim Order shall not prohibit credit of shares received on account of corporate actions.

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 4(1)
• Reg. 2
• Reg. 3(1)

Holding

The prima facie findings in the Interim Order dated March 02, 2023 that the Noticees engaged in a fraudulent and manipulative 'pump-and-dump' scheme in the scrip of Sharpline Broadcast Limited, in contravention of Sections 12A(a), (b) and (c) of the SEBI Act read with Regulations 3(1), (b), (c), (d) and 4(1) and 4(2)(a), (d), (k) and (r) of the PFUTP Regulations, stand confirmed, with certain modifications to the directions issued.

Full text

Confirmatory Order in the matter of Stock Recommendations using YouTube in the scrip of Sharpline Broadcast Limited Page 2 of 52 Broadcast Limited (hereinafter referred to as “Sharpline”), based on certain complaints, to look into possible violations of provisions of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) and various regulations framed thereunder including SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”.

Confirmatory Order in the matter of Stock Recommendations using YouTube in the scrip of Sharpline Broadcast Limited Page 3 of 52 promoter shareholders who held more than 1% of shareholding in Sharpline offloaded their entire holdings at inflated prices and booked profits. 2.5. The Noticees in this case can be broadly classified as follows - the creators of the YouTube Channels - “Midcap calls” and “Profit Yatra” are classified as a Misleading Message Disseminators (“MMDs”). Some of the Noticees are Net Sellers and profit makers (“NSs”) i.e., persons who held shares of Sharpline at the start of the Examination period, and who traded in and net sold shares during the said period. Other Noticees are Volume Creators (“VCs”) i.e., persons other than those classified as NSs, who both bought and sold shares of Sharpline during the Examination period, hence contributing to a rise in trading volumes and interest in the scrip. Connection between all the Noticees across the MMDs, NSs and VCs has been established based on several facts on record including familial relationships, KYC details, common address & email IDs, call data records and fund transfers. 2.6. Prima facie, across the MMDs, NSs and VCs, the Noticees orchestrated an egregious case of ‘pump-and-dump’ of Sharpline Broadcast Ltd. – i.e., they collectively helped create trading volumes and interest in the scrip, spread patently false and misleading YouTube videos about the scrip, and hence induced unsuspecting small investors

Confirmatory Order in the matter of Stock Recommendations using YouTube in the scrip of Sharpline Broadcast Limited Page 4 of 52 find it only fair that post-decisional order/confirmatory order is passed with respect to the below mentioned noticees. Table no. 1 S. No. Entity Name Role

Source: SecMarx — sebi:WTM/AN/ISD/ISD-SEC-1/28040/2023-24. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.