Arshad Warsi, Others Face Regulatory Wrath As SEBI Goes After YouTube Pump-And-Dump Schemes

The Securities and Exchange Board of India (SEBI) has barred several entities from the stock market for manipulating stocks by conspiring with YouTube creators.

What Happened? The country’s market regulator passed two separate orders on Thursday identifying several entities for engaging in a “pump and dump” scheme for listed companies — Sharpline Broadcast and Sadhna Broadcast.

These entities, which include a mix of traders and market analysts, used four YouTube channels to market stocks, according to the regulator.

The entities have been barred from further accessing the markets and advised to deposit the illegal gains booked during the period into an escrow account that has been established for the purpose.

The barred entities also include the names of famous Bollywood actor Arshad Warsi and his wife Maria Goretti Warsi. Sebi noted that Arshad Warsi made a profit of ₹29.43 lakh while his wife made ₹37.56 lakh.

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What did these entities do to get barred? SEBI states that these entities used misleading YouTube videos to create “false content” on select scrips, generating artificial interest. This was followed up with paid marketing campaigns for additional reach.

Once these unsuspecting investors entered the scrip, the said entities offloaded their holding at an inflated price — a process commonly referred to as "pump and dump".

"These channels had lakhs of subscribers and the misleading videos had crores of viewership aided by promotion through paid advertising campaigns. Subsequently, the deceptive YouTube videos ceased to be available for public viewing," the order read.

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