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The Securities and Exchange Board of India (Sebi) carried out a two-day search operation on finfluencer Avadhut Sathe’s stock market trading academy in Karjat, near Mumbai, on August 20-21. The action against the investment influencer came over concerns that his academy was misleading investors by providing stock tips in the guise of education – a claim which Sathe has refuted.
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The crackdown
Sathe, who describes himself as a finance trader, trainer and mentor, has been under the regulator’s scrutiny for months. His institute, Avadhut Sathe Trading Academy (ASTA), has a huge following on various social media platforms, including Youtube (9.37 lakh) and Facebook (4.78 lakh). As per ASTA’s website, Sathe, who has been trading and investing since 1991, started conducting seminars in stock market trading in February 2008.
The search operation on Sathe’s academy was carried out by a team headed by Sebi’s deputy general, during the week when Mumbai was reeling under heavy rains bringing the financial capital to a standstill.
In its search operation, Sebi seized trading records from the academy to ascertain the extent of regulatory violation.
A mail sent to Sathe seeking comments did not elicit any response. However, in a short video clip issued on August 22, Avadhut Sathe, confirmed that SEBI officials visited his Gurukul residential facility in Karjat to ‘verify whether we provide any advisory services’.
“You all know that we do not provide any advisory services…We are fully cooperating with authorities,” Sathe said in the video clip while addressing his students.
SEBI raises red flag
At a recent event, the regulator’s whole-time member, Kamlesh Varshney, without mentioning any name, had confirmed that a search operation by SEBI officials was carried out on a ”big” player from the finfluencer industry.
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“If they (finfluencers) are doing education, we have no problem. But in the name of education, if you are misguiding, giving guaranteed return performance, suggesting to sell or buy a particular stock, using live data to trade in the equity market… you cannot do this without SEBI’s registration or without following any rules and regulations,” Varshney had said.
The action on Sathe’s academy was aimed at instilling fear among unregulated players, signaling that the law enforcement agency is there and that the regulator is watching everyone, the whole-time member said.
“…That is the purpose of enforcement and it is best achieved by focusing on big people and showing that Sebi is watching everyone,” Varshney said.
Sebi has been taking regulatory action on unregistered financial influencers, or finfluencers that have mushroomed in recent times and provide unsolicited stock advisory on various social media platforms.
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In an interview to The Indian Express, in May this year, Sebi Chairman had said that the regulator has been taking stringent action on unregistered entities in the stock market. On a monthly basis, the regulator is taking down close to 5,000 unregistered finfluencers.
“We have been able to take down about 70,000 finfluencers coming with all kinds of YouTube videos and other social media things, with the help of Google and Meta,” Pandey had said.
© The Indian Express Pvt Ltd
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