SAT Upholds SEBI Findings On Manipulation Of Stock Tips Aired Through CNBC Show 'Pandya Ka Funda'

The Securities Appellate Tribunal (SAT) has recently upheld the findings of the Securities and Exchange Board of India in a case involving the alleged manipulation of stock recommendations disseminated through the CNBC television show “Pandya Ka Funda”.

The matter was heard by a coram comprising Presiding Officer Justice P.S. Dinesh Kumar and Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar.

The appeal arose from a SEBI order passed against Alpesh Vasanji Furiya and his connected entities. Under the impugned order, SEBI had imposed monetary penalties, restrained them from accessing the securities market for five years, and directed disgorgement of alleged unlawful gains.

SEBI alleged that Furiya, a regular trader, was in frequent contact with Pradeep Pandya, the anchor who hosted the stock recommendation show “Pandya Ka Funda” on the CNBC channel.

According to the regulator, call data records showed repeated communication between the two during the broadcast period. SEBI further alleged that Furiya and his entities executed trades synchronised with the on-air stock recommendations, resulting in unlawful gains.

After passing interim and confirmatory orders and issuing a show cause notice, SEBI concluded that the trading activity was linked to the recommendations disseminated on the television program. It then passed the final order imposing sanctions.

Furiya and his entities challenged these findings, saying their trades were driven by Furiya's own technical analysis and reading of market news. According to them, movements in price and trading volume triggered the trades, and not any communication with a television anchor.

Rejecting this defense, the tribunal noted the frequency of contact between Furiya and Pandya during the broadcast period and the timing of the trades. The bench observed that “their trades are evidenced by the electronic records of the stock exchange ”.

On this basis, the tribunal concluded that the stock recommendations disseminated through the CNBC channel were manipulated by Furiya through synchronised trading.

“In view of above discussion, hereinabove, in our considered opinion, Furiya has manipulated recommendations on CNBC channel; he and his entities have are entered into synchronised trades. Hence, we answer the point for consideration in the affirmative,” the tribunal held.

Accordingly, the tribunal allowed the appeal in part. While it upheld the findings of violation, it confirmed disgorgement of Rs 7.56 crore and remitted the balance disgorgement amount of Rs 3.16 crore to SEBI for re-computation.

All other directions passed by SEBI, including the five-year market access ban and the penalties imposed on Furiya and his entities, were affirmed. The tribunal also imposed costs of Rs 25 lakh on Furiya payabel to SEBI's investor protection fund.

For Appellants: Advocates Ashim Sood, Kunal Katariya, Khushil Shah and Prateek Kundu

For Respondent: Senior Advocate Shiraz Rustomjee, Advocates Manish Chhangani, Prateek Pai, Sumit Yadav, Abhay Chauhan and Atul Agrawal