In a significant regulatory action, the Securities and Exchange Board of India (SEBI) has impounded ₹53.67 crore from Asmita Patel Global School of Trading Private Limited (APGST) and its proprietor, Asmita Patel. This move comes amid allegations of operating unregistered investment advisory services under the guise of investor education. SEBI's interim order also indicates the possibility of pursuing an additional ₹104.6 crore, representing fees collected from clients.
APGST, established in 2019, offers courses and webinars on trading strategies, prominently featuring the "Banknifty Options Masterclass." While marketed as educational content, SEBI's investigation revealed that the services extended beyond mere education, veering into investment advice without the necessary regulatory approvals.
This action underscores SEBI's intensified scrutiny of financial influencers, commonly known as "finfluencers," who provide stock recommendations and investment advice on social media platforms without proper registration. In recent times, SEBI has implemented measures to delineate genuine investor education from unregistered advisory services. For instance, the regulator has restricted finfluencers from using real-time stock market data in their content and prohibited unregistered individuals from making return claims.
The crackdown on unregistered advisory activities has led to a notable decline in brand deals for finfluencers, with reports indicating a 40-60% drop in collaborations with financial brands. This decline is attributed to increased regulatory oversight and the potential reputational risks for brands associated with unregistered advisors.
A prominent example of SEBI's enforcement actions includes the case of YouTuber Ravindra Balu Bharti and his company, Ravindra Bharti Education Institute. They were barred from the securities market until April 2025 and fined ₹9.5 crore for operating an unregistered investment advisory business. SEBI's investigation revealed that Bharti lured inexperienced investors by offering unregistered investment advice and stock recommendations.
SEBI's recent actions highlight its commitment to safeguarding investors from unregistered advisory services and ensuring that financial influencers operate within the regulatory framework. Investors are advised to exercise caution and verify the credentials of individuals or entities offering investment advice.
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