Bollywood actor Arshad Warsi and his wife banned from Indian stock market

Warsi made Rs 2.9 million, while his wife Maria Goretti made 3.7 million rupees through price manipulation, regulator says

Bollywood actor Arshad Warsi and his YouTube influencer wife are among dozens who have been banned from participating in India's share market for alleged price manipulation, according to the BBC.

The market regulator, Securities and Exchange Board of India, said four YouTube channels were used to artificially inflate the values of certain shares.

SEBI said suspects inflated the values of Sadhna Broadcast and Sharpline Broadcast by using "pump and dump" schemes, according to Indian newspaper The Quint.

Actor Arshad Warsi, implicated in the case with his wife Maria Goretti, denied the allegations.

SEBI found that YouTube channels, The Advisor and Moneywise, owned by influencer Manish Mishra, used celebrities to recommend stocks of two companies to retail investors. Similar videos were uploaded on the channels Midcap Calls and Profit Yatra, according to the BBC.

Investigations revealed that videos on these channels, which had hundreds of thousands of subscribers, were aided by paid marketing campaigns and were viewed by millions.

Entities involved in the price manipulation made profits by selling their own shares while the prices were high, the BBC reported.

SEBI said it has impounded illegal gains worth nearly Rs 540 million made by people and entities involved in the scam.

According to SEBI, Warsi made a profit of Rs 2.9 million and his wife Maria Goretti earned a profit of Rs 3.7 million, the BBC said.

"PUMP AND DUMP SCAM"

A pump and dump is a three-step scam in which a person or entity uses fake information and manipulative claims to persuade investors to increase the price of shares and then sell the previously bought holdings in bulk, which leads to a steep price decline.

First, a person or entity buys a significant holding in a stock.

Secondly, they make exaggerated claims about the firm, encouraging people to "pump" their money into it and purchase more.

Finally, as the stock price goes up, they "dump", or sell the holdings and pocket the gains. However, as the significant stock volume is dumped, its price falls, and other investors lose money.

Fake information is usually propagated via social media platforms or emails. Unsuspecting small investors are schemed into investing in small and mid-cap stocks using banners and social media messages.

Denying the allegations against him and his wife, Actor Arshad Warsi said on Twitter, “Please do not believe everything you read in the news. Maria and my knowledge about stocks is zero, took advice and invested in Sharda, and like many other, lost all our hard earned money.”