Securities and Exchange Board of India (SEBI), the market regulator on Wednesday barred CNBC Awaaz Editor Hemant Ghai, his mother and his wife for indulging in fraudulent trading practices. Ghai is the host of the show Stock 20-20 on CNBC Awaaz.
In its Interim Order, SEBI says that upon analysis of trading pattern of Hemant Ghai’s mother and wife for period between January 1, 2019 to May 31, 2020, high correlation was found in the trading of stocks that were recommended on Ghai’s show Stock 20-20.
How Hemant Ghai indulged in fraudulent trading
SEBI’s initial examination found that Ghai was hosting/co-hosting various shows like Stock 20-20 (at 7:20 AM, Monday through Friday), Munafe Ki Taiyari Pehla Sauda and Kamai Ka Adda. Stock 20-20 would recommend stocks to be bought/sold that day.
SEBI observed that Ghai’s wife and mother undertook a large number of Buy-Today-Sell-Tomorrow (“BTST”) trades during this period in synchronisation with the recommendations made on his show. Shares were bought on the previous day to the recommendations being made on the stock 20-20 show and sold immediately on the recommendation day.
These trades were done through Authorised Person of Motilal Oswal Financial Services Ltd., namely MAS Consultancy, Mehsana, Gujarat. These were prima facie in violation of provisions of SEBI Act and PFUTP Regulations. As per SEBI, Ghai’s family earned proceeds amounting to Rs. 2.95 crore just through the limited number of trades examined during these 17 months.
Ghai has been directed to cease and desist from undertaking any activity related to giving investment advice, publishing of research reports related to the securities market, till further directions. Further, SEBI has also directed to impound the proceeds generated through such fraudulent trade.
CNBC TV-18 is also advised the viewers of relevant shows about the SEBI order.