SEBI Orders Rs 546 Crore Seizure from Trading Finfluencer

In a landmark enforcement action against stock market influencers, the Securities and Exchange Board of India (SEBI) has directed the impounding of Rs 546.2 crore from Avadhut Sathe Trading Academy and Avadhut Sathe. The two entities collected over Rs 601 crore from approximately 3.4 lakh investors through deceptive practices and misleading claims. SEBI has barred both entities from offering unregistered investment advisory and research analyst services and prohibited them from operating in the market until further orders.

Misleading Claims and Unregistered Services

The regulator’s 125-page order revealed that the entities provided unregistered investment advisory services under the guise of stock market education. They used live market trading data during training sessions to attract investors while claiming extraordinary returns and positioning their trainers as stock market experts. However, SEBI’s analysis demonstrated that all trainers, course participants, and investors actually incurred substantial net losses, contradicting the entities’ promotional claims published on social media platforms.

Continued Violations Despite Warning

SEBI had previously issued a warning to these entities in March 2024, cautioning them against misrepresentation and selective disclosures. Despite this warning, the entities continued publishing misleading videos and advertisements aimed at inducing unsuspecting investors. SEBI received multiple complaints from course participants who suffered significant losses despite being promised extraordinary returns. The regulator noted that these entities disseminated false information through social media, deliberately showcasing only profitable trades while hiding the reality of widespread losses among participants. While SEBI permits educational activities, it emphasized that any such services must strictly comply with securities laws and require proper registration certificates.