Arshad Warsi, Wife Maria Goretti Barred from Stock Market for 1 Year in Sadhna Broadcast Scam
Mumbai, May 30 – In a major crackdown on stock market malpractice, the Securities and Exchange Board of India (SEBI) has barred Bollywood actor Arshad Warsi, his wife Maria Goretti, and his brother from the securities market for one year. The ban comes after SEBI found them guilty of participating in a stock manipulation scheme involving Sadhna Broadcast Ltd (now renamed Crystal Business System Ltd).
SEBI’s investigation revealed that the Warsis were part of a coordinated "pump and dump" operation where the share price of Sadhna Broadcast was artificially inflated using misleading YouTube videos and paid online campaigns, and then sold off at a profit to unsuspecting retail investors.
Fines, Refund Orders, and WhatsApp Evidence
SEBI has also imposed a fine of ₹5 lakh each on Arshad Warsi, his wife, and his brother. Additionally, they have been ordered to return illegal gains totalling ₹1.05 crore.
According to SEBI’s final order, Arshad Warsi and his family worked closely with Manish Mishra, the mastermind behind the scam. Mishra ran the online campaigns and was found to have used YouTube channels like The Advisor, Midcap Calls, Profit Yatra, Moneywise, and India Bullish to spread false information about Sadhna Broadcast's performance and prospects.
Crucially, WhatsApp chats recovered during the investigation showed Mishra offering ₹25 lakh each to Arshad Warsi, Maria Goretti, and his brother for participating in the scheme.
Warsis Claimed Inexperience, SEBI Disagreed
In their defense, the Warsis claimed they were novice investors and unaware of the nature of the trades being executed. However, SEBI countered this claim by stating that Arshad Warsi was actively trading not just from his own account, but also using his wife’s and brother’s accounts.
His official statement to SEBI was recorded on June 27, 2023, in which he acknowledged the trades but claimed ignorance about the manipulation.
61 People Penalized, 7 Banned for 5 Years
In total, seven individuals have been banned for five years, and another 54—including the Warsis—have been barred for one year. SEBI found that nearly 45% of total trades during the period of the scam came from linked accounts involved in the manipulation.
The probe covered the period from March 8, 2022, to November 30, 2022, after SEBI received a complaint alerting them about false stock tips being circulated via YouTube.
Big Names, Bigger Profits
The scam enabled several individuals and companies to earn crores in illegal profits. SEBI found that:
- Gaurav Gupta earned ₹18.33 crore, the highest in the scheme.
- Sadhna Bio Oils Pvt Ltd made ₹9.41 crore.
- Manish Mishra, the key planner, was fined ₹5 crore.
- Other prominent beneficiaries, including Gaurav Gupta, Rakesh Kumar Gupta, Subhash Agarwal, Piyush Agarwal, and Lokesh Shah, were fined ₹2 crore each.
- Jatin Manubhai Shah was fined ₹1 crore.
An IPS officer who was also found to be involved settled the matter by paying a penalty under SEBI’s settlement mechanism.
Pump and Dump via YouTube: A Cautionary Tale
The case highlights the dangerous nexus between social media influencers and stock manipulation. SEBI’s final report states that misleading videos and false narratives were used to create a “buzz” around Sadhna Broadcast, tricking retail investors into buying the shares at high prices.
These videos were designed to mislead retail traders, claiming Sadhna would see “strong financial growth.” Once the share price was inflated, the accused dumped their holdings at a profit, leaving retail investors with heavy losses.
Final Order Follows 2023 Interim Action
This final action comes over a year after SEBI issued its interim order in March 2023, freezing the assets of those allegedly involved. Today’s order reinforces SEBI’s commitment to curbing fraudulent activity in the market.
The Bigger Picture: Investor Awareness
The Sadhna Broadcast case is a stark reminder of how retail investors must be cautious about investment tips from unverified YouTube channels and social media influencers.
“SEBI’s findings show how easily social media can be weaponized to mislead investors,” said a senior market analyst. “This is a wake-up call for the industry and the public.”
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