WHAT IS PUMP AND DUMP SCHEME ?

 

  • Fraudulent strategy, commonly used in the stock market to artificially inflate the value of a particular stock or security.
  • Once the stock price rises to a desirable level, the involved parties sell off their shares at a large profit.

 

  • SEBI uses its Data Warehousing and Business Intelligence Systems to identify such scams. It provides “pattern recognition algorithms” to monitor trading. It then throws up data on who might be violating securities laws.
  • SEBI then investigates the stock and seeks clarifications from the company. If it receives an unsatisfactory response, the regulatory body cracks down on the Misleading Message Disseminator (MMD).

 

  • Manipulation of shares by certain entities in the stock of Sadhana Broadcast Limited and Sharpline Broadcast Limited
  • False and misleading videos about the companies were uploaded on two YouTube channels, namely, The Advisor, Midcap Calls, Profit Yatra and Moneywise. Both these YouTube channels had lakhs of subscribers and the misleading videos had crores of viewership aided by promotion through paid advertising campaigns.
  • Actor Arshad Warsi, his wife Maria Goretti and 29 other individuals involved in YouTube pump-and-dump scheme.
  • Violations of provisions of the SEBI Act and various regulations framed thereunder, including SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 by certain entities for the period April 27, 2022 to September 30, 2022.
  • Banned all of them from dealing in securities following its investigation.
  • Arshad Warsi has made a profit of Rs 29.43 lakh and his wife has earned a profit of Rs 37.56 lakh.
  • SEBI orders illicit gains of Rs 41.85 crore, by all 31 persons to be deposited in an escrow account with a scheduled commercial bank within 15 days.

 

CLICK HERE TO READ THE ORDER

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