SEBI Bans Sanjiv Bhasin and 11 Others Over Fraudulent Trades: A Wake-Up Call for Market Integrity

Regulatory Shockwave: SEBI Cracks Down on Prominent Traders

In a decisive move reinforcing its commitment to market transparency, the Securities and Exchange Board of India (SEBI) has barred Sanjiv Bhasin and 11 others from accessing the securities market over their alleged involvement in fraudulent trading activities. This marks one of the most high-profile regulatory actions in recent months, targeting well-known market personalities and reinforcing the watchdog’s broader effort to crack down on stock price manipulation and misleading investor advice.

SEBI’s 80+ page interim order, released on June 14, details a complex web of misrepresentation, price rigging, and front-running practices that violated multiple sections of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

"Such activities shake the very foundation of investor trust, especially when orchestrated by individuals who claim credibility in the public eye," the order stated.

Who is Sanjiv Bhasin?

Sanjiv Bhasin, a veteran market analyst known for his television appearances and past associations with brokerage firms, has been a visible figure in India’s retail investor space. His recommendations were widely followed by retail investors via social media and live market commentary.

According to the SEBI report, Bhasin and his associates allegedly colluded to artificially inflate the prices of certain small-cap stocks, often preceding stock tips that were later disseminated through Telegram channels, WhatsApp groups, and even live TV appearances.

How the Fraud Was Allegedly Executed

SEBI’s forensic audit identified the following key patterns:

• Front-Running: Accused individuals purchased shares in select low-liquidity stocks prior to public recommendations.

• Pump and Dump Scheme: After inflating prices via mass communication, shares were offloaded to unsuspecting retail investors at a profit.

• Misleading Communication: The tips often falsely portrayed insider knowledge or privileged access to "exclusive" market insights.

One such Telegram group used for this purpose had over 100,000 followers, and was actively used to circulate "buy calls" shortly after the accused accumulated stock positions.

For further clarity, the SEBI order can be accessed in full at SEBI’s official website.

Market Implications: Trust and Retail Sentiment at Risk

The crackdown comes at a critical time when India's capital markets are witnessing record participation from retail investors, thanks to platforms like Zerodha, Groww, and Upstox. However, this democratization of stock trading also makes newer investors more vulnerable to influencer-led manipulation.

In an earlier circular, SEBI had warned against unregistered investment advisors and pump-and-dump schemes, following multiple similar cases in 2023. This latest action reinforces the regulator's zero-tolerance policy toward violations that threaten retail investor safety and capital market credibility.

According to LiveMint, the crackdown may lead to stricter disclosures for public-facing analysts and a review of how financial content is regulated across social media.

What Happens Next?

While this is an interim order, the individuals named—including Sanjiv Bhasin—have been prohibited from:

• Buying, selling, or dealing in securities directly or indirectly.

• Associating with any listed company or registered market intermediary.

• Offering investment advice until the conclusion of final proceedings.

A final adjudication will determine whether these bans become permanent or lead to financial penalties, including disgorgement of illegal profits.

As per Business Standard, SEBI is expected to also examine the involvement of other brokerages and intermediaries that may have facilitated the trades.

The Broader Trend: SEBI’s Rising Vigilance

This action fits into a broader regulatory trend. In the past 18 months, SEBI has:

• Banned over 200 influencers and unregistered advisors from market operations.

• Imposed ₹30 crore+ in penalties in cases of YouTube pump-and-dump schemes.

• Tightened rules around Algo trading and financial influencers (Finfluencers).

For a comprehensive overview, refer to SEBI’s recent actions summary.

Investor Takeaway: Caution Is the New Strategy

While India's stock market continues to offer promising returns, this incident serves as a stark reminder that not all advice—especially from public personalities—is in your best interest.

Retail investors should:

• Rely on registered investment advisors listed on RIA SEBI Registry.

• Avoid making decisions based on WhatsApp tips, Telegram calls, or unverified channels.

• Use data-backed tools like Screener.in, Moneycontrol, and Investing.com to analyze fundamentals.

Disclosure: This report is based on official SEBI communications and publicly accessible financial data. No part of this article should be considered investment advice.