**Sebi Accuses Former IIFL Director of Market Manipulation**
The Securities and Exchange Board of India (Sebi) has accused Sanjiv Bhasin, the former director of IIFL Securities, of being the central figure in a significant front-running and market manipulation case. During a hearing at the Securities Appellate Tribunal (SAT) on Friday, senior counsel for Sebi, Shiraz Rustomjee, described the case as “fairly gross,” asserting that Bhasin is likely the mastermind behind the alleged activities.
Following the hearing, the tribunal ordered Bhasin to deposit ₹1 crore in favor of Sebi, stating that this action would serve the interests of justice. The SAT bench emphasized that the deposit should be made in a fixed account with a lien in favor of Sebi.
This development comes in response to a petition filed by Bhasin challenging Sebi’s order from June 17, which accused him of engaging in front-running and stock manipulation. Front-running involves a broker trading stocks based on insider knowledge of impending transactions that could influence prices.
Sebi’s order indicated that Bhasin initially purchased certain securities before recommending them to the public through various media channels, including Zee Business and ET Now, in violation of Sebi’s Research Analyst Regulations. The regulator has also frozen Bhasin’s bank accounts and securities, demanding that he, along with others, collectively return alleged gains of ₹11.7 crore. Bhasin has contested this amount, claiming it is “unsustainable” and has led to significant financial distress. He, along with his cousin Lalit Bhasin and other entities, has been barred from accessing capital markets.
Vikram Nankani, representing Bhasin, refuted the allegations, arguing that the calculations made by Sebi were unfounded and based on speculation. He stated that the claimed amount of ₹11.37 crore lacks any substantial basis.
In his 28-page plea, Bhasin contended that he did not receive any direct financial benefit from the transactions in question and that no funds were deposited into his account. He characterized Sebi’s order as “excessive, disproportionate, and based on erroneous computation,” asserting that some profits included in Sebi’s calculations were from stocks that he neither recommended nor traded with the alleged intent.
This case is part of Sebi’s broader initiative to combat media-linked market manipulation and financial advice driven by undisclosed conflicts of interest.
**FAQ**
**What is front-running in stock trading?**
Front-running is a practice where a broker executes orders on a security for their own account while having knowledge of pending orders from their clients, which can affect the security’s price.