Sanjiv Bhasin moves SAT against Sebi order in front-running case

Mumbai: Sanjiv Bhasin, former director of IIFL Securities, has approached the Securities Appellate Tribunal (SAT), challenging an order by the Securities and Exchange Board of India (Sebi) that accused him of market manipulation.

In its 17 June order, Sebi alleged that Bhasin was involved in front-running and stock manipulation. The market regulator barred Bhasin and 11 others from securities trading for allegedly engaging in coordinated fraudulent trading by placing orders ahead of offering stock recommendations on television and social media.

The SAT is scheduled to hear the matter on Thursday. Bhasin is being represented by law firm Vishesha Law, according to a court filing.

Front-running refers to trading in a stock or any other financial asset by a broker who has insider knowledge of a future transaction that is likely to impact its price.

“Sebi's order has caused significant hardship, resulting in freezing of all bank accounts and securities, thereby severely disrupting my finances,” said a 28-page petition, a copy of which was seen by Mint.

In the petition, Bhasin denied all allegations and sought a stay on the “effect and operation” of the order.

Essentially, a stay of the “effect and operation of an order” means that a court has temporarily suspended the enforcement of a legal order, preventing it from taking effect or being executed while the matter is under review or until a further order is made.

Calling the order “perverse and arbitrary,” Bhasin alleged that Sebi's directions were “harsh, exorbitant and unreasonable” and therefore “liable to be quashed and set aside.”

In his plea, Bhasin said he did not receive any “direct monetary benefit” from the transactions in question and that there had been no inflow of funds into his account.

“It is submitted that (Sebi's) directions are excessive, disproportionate and based on erroneous computation of alleged unlawful gains,” the petition stated. “The appellant (Bhasin) submits that the calculation of gains includes profits from stocks that were neither the subject of any recommendations nor traded with intent alleged in the order,” it said.

Sebi had found that certain individuals and entities, including Bhasin, were engaged in making stock recommendations to the public through various social media platforms. It said that prior or simultaneous trades were executed to generate unlawful gains. As a result, Bhasin was restrained from accessing the securities market.

The regulator, in its order, held that Bhasin would first buy the securities himself and later recommend the same securities to the public on news channels including Zee Business, ET Now, and IIFL’s Telegram channel.

Once the prices of the securities rose following the recommendations, Bhasin would sell the securities, thus making a profit. Sebi pointed out that such activity amounted to “fraudulent or manipulative scheme designed to mislead investors or gain unfair market advantage.”

According to Bhasin, the unlawful gains should be assessed and attributed separately based on different roles and responsibilities.

“In the absence of findings establishing joint conduct or unified intent, the clubbing of gains violates the principles of fairness and personal liability,” the petition said.

Sebi’s move signals a wider crackdown on market manipulation tied to media and on financial advice influenced by conflicts of interest.

Sebi had directed Bhasin and some other entities to impound the alleged gain of ₹11.7 crore jointly and severally. This was “unstainable,” Bhasin stated.

After receiving multiple complaints from market participants, Sebi had carried out a preliminary analysis to probe the trading activities of the entities involved.

Separately, following the same Sebi order, Lalit Bhasin, a cousin of Sanjiv Bhasin, also moved the SAT seeking relief. The SAT has reserved its order in the matter.

From April 2017 to November 2022, Bhasin served as a director at IIFL. He later re-joined the firm as a consultant from December 2022 to June 2024, during which he provided stock trading views that were broadcast to IIFL clients.

In January 2022, Bhasin endorsed L&T Technology Services on Zee Business after acquiring 3,800 shares through futures contracts. He sold them shortly after the broadcast, earning a profit of ₹1.36 lakh. Likewise, on 7 February, 2024, he named Parag Milk Foods as a “special pick” while already holding 51,500 shares, which he sold later that day, earning a profit of ₹8.4 lakh.

Meanwhile, Bhasin also shares astrology-related tips through a platform known as Astrowiz.

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