YouTube Stock Manipulation Case: SAT Grants Interim Relief To Arshad Warsi, Maria Goretti

The SAT granted interim relief to Bollywood actor Arshad Warsi and his wife, Maria Goretti, on Monday in the YouTube stock manipulation case.

The Securities Appellate Tribunal set aside the SEBI directions, including its direction to freeze the accounts of entities involved. The ban on trading is also reduced to a restraint on trading the scrip of Sadhna Broadcast Ltd.

However, Warsi is told to put 50% of the alleged illegal gain into an escrow account within 15 days of the order. According to the Securities and Exchange Board of India, Warsi and Goretti cumulatively made a gain of Rs 76.33 lakh through the manipulative scheme. This has now been brought down to Rs 38.16 lakh.

Warsi, Goretti, and 29 other entities were barred from the securities market on March 2 by an interim order of the regulator following allegations of market manipulation. They were accused of manipulating the stock of Sadhna through YouTube videos.

Warsi challenged the order in the appellate tribunal, citing a lack of evidence and reason in the regulator’s order.

According to Warsi, a mere apprehension was not enough to attach his back accounts when there is no evidence to prove his participation in the manipulative scheme. SEBI said the fact that he did the trade was enough to make him part of the plot.

Finding merit in the argument of Warsi, the SAT held that there was no evidence to show that they induced innocent investors to buy shares of Sadhna.

According to the SAT, they are not involved in the increase in the price of the scrip, nor did they ever take part in its distribution or feature in the alleged videos. They were also not connected with any of the shareholders or key managerial personnel.

The tribunal has also directed SEBI to complete the investigation within six months.