Description

SEBI settlement order against Mr. Hemant Ghai for communicating material non-public information regarding stock recommendations to be provided on TV shows, leading to unlawful gains through advance trading.

Summary

SEBI issued a settlement order (SO/PSD/2025-26/8430) against Mr. Hemant Ghai (PAN: AHMPG0327K) regarding allegations of communicating material non-public information about stock recommendations to be made on the TV show “Stock 20-20” co-hosted by him on CNBC Awaaz. The investigation covered the period from January 01, 2018 to January 13, 2021, during which Mr. Ghai allegedly shared advance information about his TV recommendations with certain persons who then traded on this information and made unlawful gains. The case was settled for INR 1,45,60,000 (Rupees One Crore Forty-Five Lakh Sixty Thousand only) without the applicant admitting or denying the findings.

Key Points

  • SEBI observed high correlation between recommendations made by Mr. Hemant Ghai on “Stock 20-20” show on CNBC Awaaz and trades of certain other entities
  • Investigation period: January 01, 2018 to January 13, 2021
  • Show Cause Notice (SCN) issued on February 24, 2025 for alleged violations of SEBI Act and PFUTP Regulations
  • Allegations included communication of material non-public information regarding TV recommendations to certain persons who then traded ahead of public disclosure
  • Violations alleged: Section 12A(a), (b), (c), (e) of SEBI Act and Regulation 3(b), (c), (d) and 4(1) of PFUTP Regulations
  • Settlement application filed under SEBI (Settlement Proceedings) Regulations, 2018
  • Internal Committee meeting held on June 24, 2025
  • HPAC meeting held on August 07, 2025 recommended settlement
  • Settlement amount: INR 1,45,60,000
  • Panel of Whole Time Members of SEBI accepted the HPAC recommendations

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions under:

  • SEBI Act sections 11(1), 11(4), 11(4A), 11B(1), 11B(2), 12A(a), (b), (c), (e), and 15HA
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
  • SEBI (Settlement Proceedings) Regulations, 2018
  • SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995

Compliance Requirements

  • Market experts and TV show hosts must not communicate material non-public information about stock recommendations before public disclosure
  • Individuals with access to advance information about market recommendations must not engage in front-running or share such information with others for trading purposes
  • Strict adherence to insider trading and PFUTP regulations required for all market participants, especially those with public platforms
  • TV channels and market experts should ensure proper information barriers and compliance protocols

Important Dates

  • Investigation Period: January 01, 2018 to January 13, 2021
  • Show Cause Notice Issued: February 24, 2025
  • Internal Committee Meeting: June 24, 2025
  • Applicant’s Email Response: July 11, 2025
  • HPAC Meeting: August 07, 2025
  • Settlement Order Date: December 09, 2025

Impact Assessment

Market Impact: This settlement order sends a strong signal to market experts, TV show hosts, and analysts who provide stock recommendations through public platforms. It establishes clear accountability for those who may use their position to front-run recommendations or share advance information with select individuals.

Regulatory Precedent: The case demonstrates SEBI’s vigilance in monitoring correlation between public recommendations and trading patterns, and its willingness to pursue cases even when they involve prominent market personalities and media figures.

Industry Impact: TV channels, market experts, and research analysts will need to strengthen compliance frameworks around the timing and dissemination of stock recommendations. The substantial settlement amount (INR 1.45 crore) serves as a deterrent against similar practices.

Investor Protection: The order protects retail investors who rely on TV show recommendations by ensuring that market experts cannot give unfair advantages to select individuals through advance information sharing.

Impact Justification

High importance due to settlement of serious allegations involving front-running of TV show stock recommendations and communication of material non-public information. Medium impact as it involves one individual and sets precedent for TV market experts, with settlement amount of INR 1.45 crore.