Trawling twitter feeds leads to treasure trove of information of illegal buy and sell recommendations
First, we have to compliment the sleuths of SEBI for their perseverance and tenacity in trawling through trillions of twitter feeds to get to their culprits.
At the same time, we have to lament the lack of wisdom of Anirudh Sethi for issuing highly provocative buy and sell recommendations on twitter.
“YES,YES,YES…Only DIGJAM, Last 2 minutes buy in truck load if u get!!!”
“RAPE on card in YES BANK…Will not coss 820-822… We see Bloodbath upto 750… patience will make u millionare!!”
“ONLY BATA BATA BATA….. Jump of 50-60-70 or more on card. Don’t ask anything….Unexpected blast on card”
“BOSCH… Sharp panic upto 2500-25350 & then??? Sell if u can…watch bloodbath!!! Now at 25950…we are selling… unexpected fall”.
Naturally, such tweets are like waving a red flag before an enraged Bull.
What makes it worse is that when the SEBI sleuths had hauled him up once before for contravention of the law, Anirudh Sethi issued a solemn declaration that he would henceforth abide by the law and not commit any atrocities.
“I will publish the article containing analysis within the framework of the existing rules and regulations as prescribed and/or promulgated by the Market Regulator, SEBI in so far as they are pertaining to the Capital market,” is one of the solemn undertakings offered by Anirudh Sethi.
Fatal attraction to skirting with danger
Sethi committed the tactical blunder of imagining that after his promise not to indulge in violations of the law, the SEBI sleuths would look away and not bother him.
However, he grossly miscalculated the professionalism of the sleuths.
They are battle-hardened. They kept constant surveillance on twitter and monitored all traffic through and from Sethi’s twitter account.
“FATAL ATTRACTION Subscription is Back-Again-Last 11 Days – Or Join in Diwali Whoever wins World-Cup, our Subscribers will ever be winners ..” Sethi tweeted, hoping to lure gullible investors into his subscription service, not realizing that alarm bells were clanging in SEBI’s HQ.
This was the moment that the sleuths pounced on him and took him down.
In his defense, Sethi claimed that the twitter account was a “parody” and that he was not responsible for what was stated there.
However, the officials were not impressed and saw through the ploy.
“The submission of the Noticee that the said twitter handle did not belong to him and was a parody account is devoid of any merit. In view of the discussions above, the burden of proof to establish that the twitter handle ”anirudhsethi71” pertains to the Noticee stands fulfilled,” K Saravanam, the General Manager and Adjudicating Officer of SEBI, observed in a grim tone.
Ultimately, after much legalese, SEBI has held that Sethi’s activities “seriously compromise the Regulatory framework and are detrimental to the interest of the investors in the securities market”.
It has also been held that the defiant attitude to the earlier directions issued by SEBI has “put investors to large risk”.
“Such defiance displayed by the Noticee towards regulatory directions cannot be viewed lightly. The manipulative techniques using social media is a serious cause of concern in the interest of the markets and its investors”, it is observed.
At the end, a whopping fine of Rs. 25 lakhs has been imposed on Sethi “to meet the ends of justice”.
Insider traders nabbed after Facebook posts revealed nefarious activities
It is worth recalling that in the infamous case of Palred Technologies, SEBI’s sleuths detected alleged insider trading after scanning the posts made by Ameen Khwaja, the CFO of the Company.
“Pirani Amyn Abdul Aziz is also found to be connected to Ameen Khwaja through mutual friends on Facebook. He was employed with Deloitte Tax Services India Pvt Ltd (a group company of Deloitte Touche Tohmatsu India Pvt Ltd, which had conducted the due diligence of PTL during the slump sale,” SEBI observed, establishing a clear link between the officials of the Company and the persons who had traded the stock based on insider information.
Veiled warning by SEBI to all stock market experts on twitter, facebook and whatsapp
SEBI noted that Sethi “maintains an active social media presence through twitter handle with large number of followers. It is observed that language used by the Noticee in his tweets weighs heavily towards creating panic / sensation among investors encouraging them to act fast lest they lose”.
It is also observed that “the manipulative techniques using social media is a serious cause of concern in the interest of the markets and its investors”.
Prima facie, this is a warning to all stock market experts who issue unbridled buy and sell advice on twitter, facebook and whatsapp.
If the advice is regarded by SEBI as being a “manipulative technique”, one could be in serious trouble.
It is better to err on the side of caution and ensure that one doesn’t fall foul of the law!