SEBI Cracks Down on Anchor Trading: Declares CNBC Anchor’s Conduct as Abuse of Market Privilege

Introduction

In a striking decision in Hemant Ghai, In re,[i] which resonates across both the securities market and media ethics, the Securities and Exchange Board of India (SEBI) has delivered a comprehensive ruling against former CNBC Awaaz anchor Hemant Ghai, his family members, and related intermediaries. The Order reveals the disturbing misuse of media privilege, where trading accounts linked to the anchor’s family were used to front-run stock recommendations made on national television. The ruling underlines SEBI’s vigilance in preserving market integrity and ensuring that investors’ trust is not exploited by those in privileged positions.

The order further highlights a foundational tenet of securities regulation: when material non-public information is exploited for personal gain, whether sourced from corporate insiders or the media, it shakes the very confidence on which capital markets are built.

Brief Facts

• Hemant Ghai (‘Noticee No. 1’) was a news anchor at CNBC Awaaz, a popular Hindi business news channel. A strong correlation was observed between Noticee No. 1’s on-air stock recommendations and the trades executed in the accounts of his wife (‘Noticee No. 2’) and mother (‘Noticee No. 3’).

• An ad-interim ex-parte Order was passed in 2021, whereby Rs. 2.95 crore was impounded as illegal gains from Buy Today Sell Tomorrow (‘BTST’) trades and further directions were passed, restricting the Noticees market access. SEBI's investigation was later expanded to cover both BTST and intraday trades made from 01.01.2018 to 13.01.2021.

• A show cause notice (SCN) was issued after reinvestigation, alleging misuse of material non-public information and fraudulent trade practices. Additional entities, MAS Consultancy (‘Noticee No. 4’), the authorised person and Motilal Oswal Financial Services Ltd. (‘Noticee No. 5’),  the stockbroker for Noticee No. 1, 2 and 3, were added as additional Noticees.

• Evidence showed a consistent price and volume surge post-recommendations made by Noticee No. 1, revealing the material impact of his televised tips. Investigations confirmed that Noticee No. 1 had operational control over Noticee No. 2 and Noticee No. 3’s trading and bank accounts. Call data records (CDR) and email evidence confirmed frequent communications between Noticee No. 1 and Noticee No. 4’s dealers during trading hours.

• Despite being an anchor, Noticee No. 1 received profits from the trades and submitted fabricated trade instruction documents to SEBI. Trading activity in his wife’s account dropped sharply after restrictions were imposed, suggesting trades were driven by access to privileged information.

Decision of SEBI

• After examining the facts of the case, SEBI, in exercise of the powers conferred upon it under s. 19 read with ss. 11(1), 11(4), 11(4A) and 11B read with s. 15-I of the SEBI Act, 1992 (‘SEBI Act’) and r. 5 of the Adjudication Rules, 1995 passed the following directions:

  • Noticee No. 1 to 3 were barred from accessing the securities market for 5 years.

  • Noticee No. 1 and 2 were directed to jointly disgorge unlawful gains of Rs. 6.15 crore including interest to the Investor Protection and Education Fund (IEPF).

  • Noticee No. 4 and 5 were fined for regulatory lapses.

  • Noticee No. 4 was held guilty of aiding and abetting fraudulent trades, and Noticee No. 5 was held liable for supervisory negligence.

  • Accordingly, Noticees 1, 2 and 4 were made liable to pay a monetary penalty under s. 15HA of the SEBI Act, and a penalty under s. 15HB of the SEBI Act was also imposed on Noticee Nos. 4 and 5.

• SEBI found that Noticee No. 1 undertook trading based on material non-public information, his own upcoming recommendations, thus violating SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘PFUTP Regulations, 2003’).

• It was also observed that the analysis showed consistent price and volume surges following Noticee No. 1’s stock picks on shows like ‘Stock 20-20’ and ‘Kal Ka Khiladi Aaj’.

• It found that anchors at CNBC, including the Noticee No. 1, had autonomy in selecting stocks. Further, evidence showed selections were made before market close on T-1 day. It was also found that recommendations by co-anchors were also available to Noticee No. 1 prior to airing, which was confirmed via emails, segment formats, and witness statements.

• On the role of Noticee No. 4, it was found that it failed to maintain mandatory pre-trade documentation, submitted fabricated Order Instruction Sheets, and allowed unauthorised trading. Noticee No. 4 was found complicit in aiding Noticee No. 1 by permitting trades and falsifying records, violating multiple SEBI circulars.

• On the role of Noticee No. 5, SEBI observed that it failed in its supervisory role, ignoring alerts and continuing association with Noticee No. 4 despite red flags. Noticee No. 5 was also found negligent in monitoring Noticee No. 4’s activities but not complicit in fraud.

• Based on IMSI, OTP, App ID data, and linked communications, SEBI concluded that Noticee No. 1 had effective control over Noticee No. 2 and Noticee No. 3’s accounts.

• SEBI cited the ‘misappropriation theory’ recognised by the Hon’ble Supreme Court in Kanaiyalal v. State of MP[ii] to hold Noticee No. 1 liable for fraud under reg. 3(a), (b), (d) and 4(1) of the PFUTP Regulations.

Our Analysis

SEBI’s ruling offers a landmark exposition of how media influence, when coupled with trading access, can be misused to defraud public investors. The detailed forensic and circumstantial evidence compiled by SEBI, ranging from broadcast patterns to call records and device-level access logs, demonstrates the regulator’s evolving sophistication in tracking market abuse. By identifying that material non-public information can originate not only from corporate insiders but also media anchors, SEBI has expanded the scope of PFUTP enforcement and sent a clear message that regulatory scrutiny applies equally to all market influencers.

The ruling also sheds light on the complicity and lapses within the intermediary framework. Noticee No. 4’s failure to maintain records, its submission of fabricated documents, and Noticee No. 5’s willful blindness to clear red flags expose systemic weaknesses in compliance culture among brokers and their authorized persons. SEBI’s recognition that the privileges of market access come with proportional accountability is crucial to sustain a fair trading ecosystem. This case reflects the regulator’s resolve to crack down on misuse of broadcast influence, a trend likely to see increased monitoring in the age of social media and influencer investing.

End Notes

[i] [2025] 172 taxmann.com 600 (SEBI).

[ii] (2021) 5 SCC 462.

Authored by Prashant Singh, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.