The Securities and Exchange Board of India (SEBI) has recently issued an Interim Order against Sharpline Broadcast Limited, for allegedly using YouTube videos peddling false and misleading news to recommend that investors should buy the Sharpline stock for extraordinary profits.
SEBI received complaints alleging price manipulation and offloading of shares by certain entities in the Sharpline Broadcast Limited. The complaints stated that YouTube videos containing false information, supported by paid marketing campaigns worth crores of rupees, were being uploaded to attract investors. These unsuspecting investors would then enter the scrip, and the entities in question would offload their holdings at inflated prices.
During the primary Investigation, it was unearthed by SEBI that, during the second half of May 2022, false and misleading videos about the company were uploaded on two YouTube channels namely, “Midcap calls” and “Profit Yatra”.
These YouTube videos peddled false and misleading news to recommend that investors should buy the Sharpline stock for extraordinary profits. These YouTube Channels had lakhs of subscribers and the misleading videos had crores of viewership aided by promotion through paid advertising campaigns. Subsequently, the misleading YouTube videos ceased to be available for public viewing.
Subsequent to the release of the misleading YouTube videos, there was an increase in the price and trading volume of the Sharpline scrip. The volumes appear to have been contributed by a large number of retail investors likely influenced by the misleading YouTube videos. During this period, certain non promoter shareholders who held more than 1% of shareholding in Sharpline
offloaded their entire holdings at inflated prices and booked profits, the preliminary investigation further revealed.
It was also noted that as of now, the videos recommending buying the scrip of Sharpline are not available for public viewing.
However, one of the videos, uploaded on May 27, 2022 that were downloaded earlier in this set of videos is made available by SEBI in the following QR Code:
The investigation, even though preliminary, sheds light on how interconnected the concerted actions of the parties alleged to be involved are.
In view of the above, pending investigation, in order to protect the interests of investors and the integrity of the securities market, in exercise of the powers conferred upon it under Sections 11(1), 11(4) and 11B (1) read with Section 19 of the SEBI Act issued an interim ex-parte order, imposing restrictions and informing the steps that the accused are required to comply, in the proceedings.
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