SEBI Cracks Down on Ex-CNBC Anchor
• TV Anchor’s Stock Scam Exposed, SEBI Imposes Ban
• SEBI Blocks Ex-CNBC Awaaz Anchor from Markets for 5 Years
Unmesh Gujarathi
Sprouts News Exclusive
In a significant crackdown on fraudulent trading practices, the Securities and Exchange Board of India (SEBI) has barred former CNBC Awaaz anchor Hemant Ghai, his wife Jaya Ghai, and his mother Shyam Mohini Ghai from accessing the securities markets for five years. SEBI has also directed Mr. Ghai and his wife to disgorge Rs 6.16 crore earned from illicit trades. Additionally, a penalty of Rs 1.35 crore has been imposed on four entities, including Mr. Ghai, his wife Jaya, MAS Consultancy Service, and Motilal Oswal Financial Services Ltd.
According to Sprouts News, the SEBI order follows a detailed investigation into suspicious trading activities that exploited non-public stock recommendations aired on CNBC Awaaz.
In September 2022, the Securities Appellate Tribunal (SAT) had stayed SEBI’s January 2021 interim order against Mr. Ghai and his family while the investigation was ongoing.
SEBI’s findings revealed that Mr. Ghai leveraged his position as a television anchor to execute trades through his wife’s and mother’s accounts, aligning them with stock recommendations he made on-air. Ashwani Bhatia, Whole-Time Member (WTM) of SEBI, stated, “The systematic correlation between the timing of the recommendations and the surge in trading activity further confirms their materiality, leaving little room for doubt regarding their effect on the market.”
The probe covered trades executed between January 1, 2018, and January 13, 2021, including BTST (Buy Today, Sell Tomorrow) and intraday trades. SEBI determined that illegal gains from these trades amounted to Rs 6.15 crore, including Rs 2.95 crore identified in the interim order. The impounding order also directed the recovery of an additional Rs 3.19 crore, along with interest, from the accused entities.
Sprouts News has learned that Mr. Ghai was the host of various shows, including Stock 20-20, Munafe Ki Taiyari Pehla Sauda, and Kamai Ka Adda. Stock 20-20, a show aired at 7:20 AM on weekdays, featured stock recommendations for day trading. SEBI’s investigation found that trades in the accounts of Jaya Ghai and Shyam Mohini Ghai were synchronized with Mr. Ghai’s recommendations, allowing them to profit from market movements caused by his advice.
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The trades were facilitated through MAS Consultancy from Mehsana, Gujarat, an authorized person of Motilal Oswal Financial Services.
Beyond the five-year market ban, the SEBI order mandates the impounding of illegal gains and prohibits the Ghais from associating with any listed company or intermediary registered with SEBI during the debarment period.
SEBI emphasized that these practices violated the SEBI Act, 1992, and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. Despite Mr. Ghai’s defense that his recommendations were based on publicly available information and intended to disseminate news rather than influence stock prices, SEBI concluded that the immediate market impact of his recommendations was not coincidental.
As per Sprouts News, Mr. Ghai and his wife have been fined Rs 50 lakh each, while MAS Consultancy Service and Motilal Oswal Financial Services Ltd. must pay Rs 30 lakh and Rs 5 lakh, respectively.
Previously, in September 2022, SAT had lifted SEBI’s interim ban on the Ghais, pending further investigation. However, the tribunal ruled that the alleged unlawful gain of Rs 2.95 crore would remain in an escrow account until SEBI completed its probe.
