SEBI Slaps Rs 546 Crore Fine on Avadhut Sathe and ASTAPL For Misleading Investors

A Mumbai-based Avadhut Sathe Trading Academy Private Limited (ASTAPL) shared a Youtube video in October 2023 the video was regarding a supposed story of a homemaker, “Lakshmi Sreenivasan”, who went from caring for her family and depending on their income to becoming a crorepati herself.

The video declared that Lakshmi had crossed the benchmark of Rs 1 crore by trading Bank Nifty Options within only 2.5 years between 2020 and March 2023. The advertisement stated “Lakshmis of ASTA (Avadhut Sathe Trading Academy)”.

When the Securities and Exchange Board of India (SEBI), India’s market regulator, reviewed her profit and loss details, they found that the advertisement was a white lie because Lakshmi had made money via options trading; however, her profit never crossed Rs 4.17 lakh.

SEBI further Prohibited Avadhut Sathe from the market, who often used to say “Market is Gold”. SEBI also restricted him and his company from buying, selling or dealing in securities until it issues further notice.

The regulator added that under the guise of operating an educational venture Avadhut and his academy’s trainer consistently provided investment advice and research analysis even after not being registered with SEBI. SEBI also noticed that the company also published misleading and false claims to draw more enrollments in the academy. (One of which was about Lakshmi).

SEBI added in its order that “Preliminary examination in the matter indicated that ASTAPL/Sathe was engaged in providing unregistered investment advisory and research analyst service under the guise of stock market education while using live market trading data during sessions.” SEBI also added that this academy had also taken huge amounts of money from unsuspecting investors.

“In addition, ASTAPL/Sathe was found to be disseminating misleading information and advertisements through social media platforms, aimed at inducing investors by portraying unrealistic returns from stock market activities.”

The SEBI has fined Sathe and his firm Rs 546.16 crore for giving investment advice and research tips without proper registration. This amount represents the money they earned illegally by providing such advice.

SEBI has instructed them to deposit the money into a fixed deposit account, and banks are not allowed to let them withdraw any funds from it. Also, none of their assets or properties can be sold until the penalty is fully paid.

Additionally, SEBI has asked Sathe, his wife Gauri Sathe, who is also a company director, and the firm ASTAPL to explain why they should not be asked to return the fees collected from their clients. However, ASTAPL did not respond to the question.