Sebi Cracks Down on Ex-IIFL Director Sanjiv Bhasin, 11 Others for Pre-Recommendation Stock Manipulation

India’s market regulator, the Securities and Exchange Board of India (SEBI), has imposed trading restrictions on Sanjiv Bhasin, former director of IIFL Securities, along with 11 others.

The action follows allegations that the individuals engaged in coordinated fraudulent trading, placing orders before broadcasting stock recommendations on TV and social media platforms.

SEBI Impounds ₹11.37 Crore in Interim Order

In an ex-parte interim order issued on Tuesday, SEBI ordered the impounding of ₹11.37 crore, which it claimed were unlawful gains accumulated through the scheme.

The interim findings are based on a detailed investigation covering the period from January 2020 to June 2024.

Bhasin was associated with IIFL Securities as a director from April 2017 to November 2022 and continued as a consultant until June 2024.

During this time, he provided stock tips via business news channels and IIFL’s Telegram channel.

SEBI alleged that he placed buy orders through associated trading accounts, such as those of Venus Portfolios, Gemini Portfolios, and HB Stockholdings, prior to making public recommendations.

Profit-Making Through Stock Recommendations

SEBI stated that Bhasin would sell stocks once prices rose following his recommendations, thereby profiting from the resulting surge.

“Once prices of securities increased after his recommendations, Sanjiv Bhasin used to sell the securities, thereby making a profit,” noted SEBI whole-time member Kamlesh Varshney in the 149-page order.

“Accordingly, he manipulated the price of securities and made ill-gotten gains.”

According to the regulator, these trades were executed via RRB Master Securities, managed by Bhasin’s cousin Lalit Bhasin and brother-in-law Ashish Kapur. The order added that Bhasin coordinated closely with RRB dealers ahead of public broadcasts.

Examples of Alleged Front-Running

One instance cited in the order occurred on January 11, 2022, when Bhasin recommended L&T Technology Services stock live on Zee Business.

SEBI found that he had earlier acquired 3,800 shares through futures contracts at ₹5,641.8 and sold them post-broadcast at ₹5,677.79, securing a profit of ₹1.36 lakh.

SEBI’s probe included phone transcripts where Bhasin reportedly gave instructions regarding the quantity and pricing of stocks just minutes before appearing on air.

The regulator said, “He used to recommend majorly ‘buy’ recommendations in certain scrips on TV Channels, which included those scrips in which he had already taken huge buy positions. Thereafter, contrary to his own buy recommendations given to the viewers en masse, he would give instructions to carry out opposite trades (sell).”

On February 7, 2024, Bhasin called Parag Milk Foods a “special stock pick,” with a target of ₹300 in 31 days. However, SEBI found that he had already bought 51,500 shares and sold them the same day at ₹235.45, profiting ₹8.4 lakh.

Communication Evidence and Regulatory Violations

WhatsApp messages revealed Bhasin asking for trade confirmations and instructing that profits be documented.

SEBI pointed out that while IIFL Securities is registered as an investment adviser and research analyst, Bhasin was not personally registered in either category.

Pending final directions, SEBI has restrained all 12 individuals from any form of trading. They have been given 21 days to respond and request a personal hearing.

“Investors would have invested their hard-earned money on his recommendation… only to be deceived by such manipulative advice wherein the advisor himself is squaring off all his positions to make huge gains at the cost of their investments,” the order stated.

IIFL’s Statement and Legal Recourse

In response, IIFL Securities clarified that Bhasin was a contractual consultant and not a member of the board of directors. “His term was to end on June 30, 2024.

However, due to health reasons, Bhasin’s contract has been discontinued prematurely with effect from June 17, 2024,” a spokesperson said.

The company also mentioned it was unaware of the order’s full details.

SEBI’s order can be appealed at the Securities Appellate Tribunal (SAT). Legal experts suggested that Bhasin’s defense may claim his TV appearances were general commentary rather than formal investment advice, or that he lacked direct control over the trades.

However, legal expert Nirali Mehta warned that the weight of evidence could undermine such arguments.

Wider Implications and Future Scrutiny

Mehta emphasized that SEBI’s action reflects increased scrutiny on public-facing market commentators. “The SEBI interim order in the Sanjiv Bhasin matter gives a clear message: media visibility, when misused, can constitute market abuse,” she stated.

She added that even recommendations on platforms like Telegram and WhatsApp fall under SEBI’s purview. “While this curbs manipulative advice, it could also narrow the range and speed of commentary,” she noted. Media platforms may now be required to enforce stricter disclosure rules for featured experts.

SEBI said the findings are preliminary and the investigation is still ongoing. The interim measures will remain in force until further orders.