Sharpline Broadcast case: Sebi modifies order against 15 individuals

Capital market regulator Sebi on Wednesday modified its order passed against 15 individuals in a case of manipulation of share prices of Sharpline Broadcast Ltd through uploading misleading videos on YouTube channels.

In March this year, the regulator barred 24 entities from the securities market for manipulating the share prices of two companies through misleading videos on YouTube channels.

Passing a 77-page confirmatory order with some modifications, Sebi restrained 15 individuals from dealing in the scrip of Sharpline during the pendency of the investigation.

"I, hereby confirm the directions issued vide the Interim Order dated March 02, 2023 read with Confirmatory Order dated July 11, 2023, subject to the following modifications, the noticees are restrained from dealing in the scrip of Sharpline during the pendency of the investigation," Sebi's whole time member Ananth Narayan G said in the order on Wednesday.

The watchdog noted that the liability for the illegal gain made by each individual to this order shall be borne by them individually.

Further, Sebi gave relaxations to Bhim Singh Chaudhary and Bimla Chaudhary.

The latest order pertains to 15 individuals.

In its interim order passed on March 2, Sebi found that during the second half of May 2022, false and misleading YouTube videos about Sharpline Broadcast were uploaded on two YouTube channels Midcap Calls and Profit Yatra.

These videos peddled false and misleading news to recommend that investors buy stocks of New Delhi-based Sharpline for extraordinary profits, Sebi said.

These YouTube channels had lakhs of subscribers and the videos had crores of viewership, aided by promotion through paid advertising campaigns.

Following the release of the videos on YouTube, there was an increase in prices and trading volume of the Sharpline scrip. The volumes appear to have been contributed by a large number of retail investors who might have been influenced by the misleading videos.

Sebi classified these entities into categories like creator of YouTube channels, net sellers and volume creators..

The entities orchestrated an egregious case of "pump-and-dump" of Sharpline Broadcast, wherein 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 to buy the scrip at elevated prices, Sebi added.

On Tuesday, Sebi had modified its order passed against 22 entities in a similar case related to manipulation of share price of Sadhna Broadcast by way of uploading misleading videos on YouTube channels.

In its order, Sebi had restrained all the entities except Kundan Singh Bisht from dealing in the scrip of Sadhna during the pendency of the investigation.