SEBI bans former TV anchor, others from market for 5 years; slaps ₹2.6 cr fine

Market regulator Securities and Exchange Board of India (SEBI) has banned former CNBC Awaaz TV anchor Pradeep Pandya and seven other entities from securities market for five years. The market watchdog also imposed a collective fine of ₹2.6 crore on the entities for indulging in fraudulent trading activities.

Apart from Pandya, others banned by SEBI are Alpesh Furiya, Manish Furiya, Alpa Furiya, Alpesh Vasanji Furiya HUF, Manish V Furiya HUF, Mahan Investment and Toshee Trade. Pandya and Furiya have been slapped with a penalty of ₹1 crore each.

Pandya was a news anchor appearing on the Hindi business news channel CNBC Awaaz. A high correlation was noted between the stock recommendations given by him on the show ‘Pandya Ka Funda and the Buy-Today-Sell-Tomorrow trades and intra-day trades executed by Alpesh Furiya and connected entities during the period from November 2019 to January 2021, says SEBI.

Pandya, while serving as an anchor for CNBC Awaaz, shared confidential information regarding upcoming stock recommendations with Alpesh Furiya and vice-versa, the regulator says in its final 55-page order.

Furiya, capitalising on this privileged information, executed trades through his own accounts and those of related entities, positioning himself to profit before the recommendations were publicly aired, it adds.

The market watchdog notes that Furiya passed on these tips to Opu Funikant Nag in exchange for a salary increase. This behaviour not only demonstrates a clear intent to leverage insider information but also reveals a systematic approach to exploiting information asymmetry for personal gain, SEBI says.

Pandya and Furiya shall cease and desist from undertaking any activity related to giving investment advice, sell or buy recommendations, publishing of research reports, etc. related to the securities market, through any media, physical or digital, till further directions, says SEBI.

SEBI noted that about 80% of the profit generated by Furiya was accounted for by trades done in synchronisation with recommendations made by Pandya. It further noted that Furiya had earned a profit of ₹6.74 crore out of which ₹5.35 crore, representing 79.3% of his total profit during this period, was result of such apparently synchronised trades.

“Financial journalists, which include anchors appearing on business news channels, play a pivotal role in the financial markets by acting as trusted disseminators of market information to public. Their insights, analyses, and recommendations are often taken at face value by a broad audience of investors who rely on this information to make investment decisions. Many instances have been pointed out in this Order where a surge in price and volume that was witnessed the scrips immediately after the recommendations were aired on CNBC Awaaz,” says SEBI.

“When TV anchors engage in sharing material non-public information, as noted in this case, it not only breaches ethical standards but also distorts market dynamics. Such acts of selective information dissemination give unfair advantages to a few, undermining the principle of equal access to information. This erosion of trust can lead to a significant loss of confidence among investors, who may feel that the markets are rigged against them,” SEBI says.