The Securities and Exchange Board of India (Sebi) on December 4 passed an interim order against finfluencer Avadhut Dinkar Sathe and his firm, Avadhut Sathe Trading Academy, for allegedly running unregistered investment advisory and research analyst services under the guise of stock market education. The regulator has barred Sathe and his academy from participating in securities market until further notice and has directed that Rs 546.16 crore in alleged unlawful gains be impounded from him and his academy.
If Sathe has any open derivative positions, he is permitted to square them off within three months, the regulator said.
The regulator ordered Sathe and his academy to open fixed-deposit accounts within 15 days with a lien marked in favour of Sebi, and directed banks to not to allow any debits from their accounts except for transferring funds to these fixed deposits.
Sebi said the order was necessary to protect investors from ongoing violations. “I am of the view that this is a fit case to exercise powers of passing interim order so as to protect the interest of investors as well as to protect the unlawful/ill-gotten gains, which may be siphoned off beyond regulatory reach,” Kamlesh Chandra Varshney, whole-time member at Sebi wrote in the order.
Sebi Directs Sathe To Stop Advisory Activity, Advertising And Fee Collection
Sebi instructed the finfluencer and his academy to immediately halt all unregistered advisory and research analyst activities, and also barred him from advertising the performance of his and course participants’ profits.
Further, the order directed not to collect any money or fee from the existing course participants on account of investment advisory and research analyst services.
Sathe and his academy have also been directed to “immediately withdraw and remove all websites, advertisements, representations, literatures, videos, brochures, materials… in relation to the unregistered investment advisory and research analyst services activity.”
How Sathe Hid Stock Tips Behind ‘Education’
Sebi found that Sathe’s live sessions, which he marketed as trading education, routinely featured stock-specific buy and sell calls rather than general instruction.
According to the regulator, several of his paid programmes included “precise stop-loss levels,” “breakouts in scrip, resistance levels, target levels,” and even long-term investment ideas in specific stocks, all delivered during live market hours.
The regulator observed that while Sathe repeatedly claimed he was only teaching, “his courses are actually giving advice on future price of specific securities.” Sebi also flagged instances where he spoke about himself and participants “collectively taking position/target,” which the regulator says indicated coordinated trading behaviour.
In other parts of the sessions, Sathe was “clearly giving stock specific advice to course participants/investors,” Sebi said, adding that he even asked participants to enter trades “at a particular level.”
Sebi observed that despite Sathe’s routine disclaimers that he was not offering stock tips, “the essence of the communication is to convince/induce the course participants/investors to invest in the said scrip as he is predicting future movement based on price volume data.”
Despite not being registered as an investment adviser or research analyst, Sathe and his academy had collected Rs 601.38 crore from more than 3.37 lakh investors, Sebi found.
From this, evidence relating to eight specific programs showed that “the amount attributable to these course is Rs 5,46,16,65,367/-.”
Sebi said that continuing such activities posed risks to investors. “If interim directions cum show cause notice are not issued, many unsuspecting investors may fall prey to the activities of ASTAPL/AS (Avadhut Sathe Trading Academy and Avadhut Sathe) under the assumption that they are providing registered and regulated investment advisory/research analyst services.”
Despite Sebi’s Prior Warnings, Sathe Continued His Activities
Earlier in August this year, Sebi conducted search and seizure operations at Sathe’s academy. Before that, on March 1, 2024, the regulator had issued a warning after finding that the academy was publishing selective profitable trades of participants while its trainers and most participants were actually incurring losses.
Despite the warning, Sebi said Sathe continued to publish misleading claims of extraordinary returns.
