SEBI bans Actor Arshad Warsi and 58 Others for 5 Years

• 30 May 2025
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Market regulator SEBI has banned Munna Bhai MBBS star Arshad Warsi along with his wife Maria Goretti and 57 other individuals from participating in the securities market for 1-5 years. This action relates to a case involving misleading videos published on YouTube channels that encouraged viewers to make an investment in Sadhna Broadcast's shares.

SEBI has imposed a penalty of ₹5 lakh each on Arshad Warsi and Maria Goretti. The regulator has also prohibited the couple from accessing the securities market for one year, as per its order issued on Thursday.

Additionally, SEBI has slapped fines ranging from ₹5 lakh to ₹5 crore on 57 other entities, including promoters of Sadhna Broadcast (now Crystal Business System Ltd). Alongside the ban, SEBI has ordered all 59 parties to return illicit gains amounting to ₹58.01 crore, along with 12% annual interest, calculated from the end of the investigation period until full repayment.

SEBI noted that Arshad Warsi earned ₹41.70 lakh, while Maria Goretti gained ₹50.35 lakh. In its final ruling, SEBI identified Gaurav Gupta, Rakesh Kumar Gupta, and Manish Mishra as the masterminds behind the entire operation. Subhash Aggarwal, who was also a director at the registrar and transfer agent of Sadhna Broadcast Ltd (SBL), acted as the intermediary between Manish Mishra and the company's promoters, the order noted.

These individuals played key roles in devising and carrying out the manipulative strategy, according to SEBI. It further observed that Peeyush Agarwal and Lokesh Shah enabled the use of accounts they controlled to support the manipulative actions of Manish Mishra and SBL’s promoters.

Agarwal, a dealer at Choice, and Shah, the owner of the Delhi franchise of the brokerage firm, were instrumental in orchestrating large-scale manipulation of the stock. Similarly, Jatin Shah was central to executing the plan, while various other entities either supported the scheme or sought to profit from it, the order stated.

According to the detailed 109-page order, SEBI said that the implicated entities acted as information conduits or assisted in executing manipulative trades, though they did not trade in the stock from their own accounts.

SEBI explained that the manipulative operation was carried out in two coordinated phases. In the first phase, entities linked to the promoters traded among themselves to gradually inflate the stock price and generate a misleading sense of market demand.

Despite being low in volume, these trades significantly impacted the price due to poor liquidity and allowed the manipulators to push the price upward with only minimal trading activity. In the second phase, misleading and promotional videos were posted on YouTube channels like Moneywise, The Advisor, and Profit Yatra—all run by Manish Mishra—according to the order.

These videos falsely promoted SBL as a lucrative investment and were timed to coincide with the manipulated market activity, SEBI added. "The overall conduct of the noticees has revealed a classic pump-and-dump scheme. The price was systematically pushed upward through collusive trading, followed by aggressive promotional activity to draw in retail investors, and finally, a coordinated sell-off by the promoters," said SEBI’s whole-time member Ashwani Bhatia in the order.

The 59 parties were found to have violated the Prohibition of Fraudulent and Unfair Trade Practices regulations. However, SEBI clarified that it would not impose a monetary fine on Varun Media Pvt Ltd - one of the promoter entities, due to ongoing insolvency proceedings. Nevertheless, the order for disgorgement remains in effect, and proceedings against the firm will be concluded in a separate ruling.

This enforcement action followed complaints received by the Securities and Exchange Board of India (SEBI) between July and September 2022, which alleged stock price manipulation and offloading of shares in television channel SBL.

The complaints pointed to deceiving YouTube videos providing false information regarding the company intended to mislead innocent investors. As a result, SEBI launched a detailed investigation into the SBL stock's alleged manipulation between 8 March 2022 and 30 November 2022. An interim order had previously been issued on 2 March 2023 against 31 individuals including SBL's promoters.

Source: Live Mint