The Securities and Exchange Board of India (SEBI) has barred Sanjiv Bhasin, Director at IIFL Securities, from trading in securities and associating with market intermediaries for engaging in front running — a prohibited market manipulation practice that involves trading ahead of stock recommendations.

SEBI’s interim order follows a detailed investigation based on multiple investor complaints. The probe found that Bhasin, a well-known market commentator, used his media presence and IIFL Telegram Channel to give buy calls after he had already taken positions in the same stocks. Once the stock prices surged following his televised or public recommendations, he exited the trades at a profit.

First action against a research analyst for front running

This marks the first instance where SEBI has penalised a research analyst for front running. While the regulator has previously taken action against traders and mutual fund officials, this is a notable case involving a public market commentator and director of a large brokerage.

According to SEBI’s findings, Bhasin primarily recommended large-cap and mid-cap stocks such as:

• L&T Technology Services

• Parag Milk Foods

• Interglobe Aviation

• Steel Authority of India Ltd

• Godrej RCP

He reportedly made Rs 11.37 crore in illegal profits by trading these stocks just before recommending them.

SEBI’s directions and action against enablers

In addition to Sanjiv Bhasin, SEBI also served notices to Lalit Bhasin and Ashish Kapur, who were labelled as enablers, and to RRB Holdings and other associated entities who acted as profit makers. SEBI found that these individuals and their entities collaborated to benefit from stock movements caused by public recommendations.

SEBI directed:

• A ban on all trading activities for Bhasin and the other noticees

• Disgorgement of Rs 11.37 crore jointly from all parties involved

• Freezing of their bank accounts, with banks instructed not to allow any payments without SEBI’s permission

• A requirement to submit responses within 21 days to the interim order

SEBI’s observations in the interim order

The market regulator described how Bhasin took advantage of his public role:

He used to first buy securities himself, then recommend them on news channels or Telegram. Once prices rose after the recommendation, he sold and booked profits

SEBI said the scheme was systematic and deliberate, exploiting market trust in his role as a guest speaker on financial news platforms and as a representative of a reputed brokerage.

Impact and precedent

Market experts said this move could set a strong precedent for regulating the conduct of research analysts and financial influencers. While front running by fund managers and dealers has been addressed in the past, the misuse of public reach by analysts and influencers was a grey area — until now.

This order is a clear signal that SEBI will scrutinise not just fund houses and brokers but also individual influencers who have the potential to impact investor decisions.

Background and profile

Sanjiv Bhasin was a prominent face representing IIFL Securities, known for his frequent appearances on business news channels and bullish stock calls. His Telegram group had thousands of followers who often acted on his recommendations.

He held a director-level position at IIFL Securities, a leading brokerage with wide retail investor reach. This gave him both access to trading platforms and the ability to influence public perception.

SEBI’s wider crackdown

SEBI has intensified its crackdown on market misconduct, particularly in the realm of:

• Front running

• Insider trading

• Stock manipulation by social media influencers

The regulator recently introduced guidelines requiring transparency in influencer-backed stock recommendations, and this case underscores the importance of such measures.

What happens next

This is an interim order, meaning Bhasin and the others can respond within 21 days. However, until then, they remain barred from:

• Accessing securities markets

• Dealing with depositories

• Using their bank funds without SEBI’s prior permission.

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