Former CNBC Awaaz anchor, family banned by SEBI for Insider Trading

The Securities and Exchange Board of India (SEBI) has stopped former CNBC Awaaz News Anchor Hemant Ghai, his wife Jaya Hemant Gai, and his mother Shyam Mohini Gai from participating in the securities market for five years, immediately, to engage in fraudulent business behavior.

The regulatory body has also ordered to disgor the hemy and Jaya Gai. 6.1 crore with 12% simple interest from 31 March 2020, representing profits received through insider trading; In addition to punishment 50 lakhs each.

Insider Business and Correlation

SEBI launched an investigation into the GHAI family in 2021, in which the CNBC Awaz revealed in relation to a high level between the stock recommendations made by Hemant Gahi and the trades executed in their wife and mother’s accounts. The regulator found that the profits made by Jaya and Shyam Mohini Gai in 81% trades and about 85% profit were directly linked to the recommendations of Hemant GHI.

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Whereas Sebi Initially, interim and confirmation orders were issued to the Ghai family in 2021 and 2022, the regulator passed a re -order order on 22 July 2022. After re -examination, SEBI issued a final order on 19 March.

“The anchors have a privilege situation … however, Hemant Ghai incorrectly used this privilege for his advantage,” the order said the whole -time member Ashbi Bhatia. “When high profile TV anchor was hired by major business channels, assigned to inform and educated investors, the material for personal gains exploited non-public information, they cheat greatly confidence that reduces market transparency.”

The investigation, which extended from 1 January 2018 to 13 January 2021, revealed that Hemant Ghai had operational control over the business accounts of his wife and mother. His mobile number, email ID and bank credentials were associated with these accounts.

SEBI found frequent communication between Hemant GHI and a dealer in MAS Consultancy Service, who carried out the trades, which carried forward his conclusions.

The regulator saw a significant increase in trading activity immediately after its recommendations. This, according to SEBI, indicated that her words directly affected the investor behavior.

The order showed that business activity in Ghai family accounts suddenly shut down after the National Stock Exchange (NSE) and MOFSL, which suggested to try to avoid detection.

Furthermore, after the removal of trading sanctions in 2022, Jaya Gai’s profits declined, indicating that his business success depended on the privileged information.

SEBI imposed a fine on MAS Consultancy Service, which is an authorized person with a penalty for Motilal Oswal Financial Services Limited (MOFSL) The regulator has a fabricated order instruction sheet and fails to fail to maintain the appropriate record of business instructions.

SEBI concluded that the MAS not only provided the facility of fraudulent trades, but also attempted to hide the misconduct by presenting the coined documents. The SEBI order said, “The trades laid by the Hemen Gai were allowed to be covered by their wife and mother, the mass provided a cover, which enabled them to take advantage of non-public information for personal gains,” SEBI order said.

Stock brokerage MOFSL was fined 5 lakhs for laps in supervisory responsibilities.

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SEBI argued that despite receiving alert of potential pump-end activity and internal warning, brokerage did not conduct enough hard work.

“MOFSL received an alert from NSE about the possible pump-end-dump activity in Jaya Gai’s trading account and internal alert about frequent profits,” SEBI said; However, when MOFSL demanded clarification from MAS, it accepted the agent refusal without further investigation.

While the market guards determined that the failures of MOFSL were due to deliberately due to negligence and non-transportation, it conducted the firm in violation of the market access and unauthorized trade related to unauthorized trade and proceeded to impose a punishment.