While restraining seven entities, including Mohd Nasiruddin Ansari, who ran unauthorised investment advisory services in the name of 'Baap of Chart', for up to one year, market regulator Securities and Exchange Board of India (SEBI) directed them to refund within three months Rs17.2 crore collected from investors. SEBI also slapped a penalty of Rs32 lakh on Mr Ansari, Rahul Rao Padamati, Tabraiz Abdullah, Asif Iqbal Wani, Golden Syndicate Ventures Pvt Ltd (GSVPL), Mansha Abdullah and Jadav Vamshi (noticees).
In an order, Amarjeet Singh, whole-time member (WTM) of SEBI says, "I note that the noticees collected Rs17.20 crore as fees in respect of unregistered investment advisory activity and have violated the provisions of SEBI Act and SEBI (Investment Advisers) (IA) Regulations. Further, Mr Ansari, Mr Rao Padamati and GSVPL have failed to comply with the directions in the Interim Order on opening an escrow account and depositing the illegal proceeds therein. These being the proceeds of an illegal activity, are liable to be refunded to the respective clients of the noticees."
While Mr Ansari has been banned from markets for one year, others are prohibited from buying, selling or otherwise dealing in securities for six months.
SEBI also slapped a penalty of Rs15 lakh on Mr Ansari and Rs5 lakh on Mr Rao Padamati. All other noticess will pay Rs2 lakh each as penalty, the market regulator says.
During the examination, SEBI observed that Mr Ansari was promoting himself as a stock market expert on various social media platforms (YouTube, Twitter), in the name of 'Baap of Chart' (BoC), luring investors and clients to enroll for various 'educational courses' offered by him and inducing them to invest in the securities market by promising them the prospect of making profits with near certainty if the recommendation and advice is followed.
SEBI also received a complaint against Mr Ansari and BoC stating that he is looting retail traders, by showing assured returns. The complainant also provided screenshots of WhatsApp groups operated by Mr Ansari and BoC where buy recommendations were given in Bank Nifty options.
An analysis of certain videos posted on the YouTube channel of Mr Ansari (@Baapofchart, with 443,000 subscribers and more than 70mn—million—views) showed that the videos were in the nature of promising quick and consistent returns through trading. Telegram, Instagram and Twitter were also used to post links to videos of Mr Ansari, and subscription plans and screenshots of educational courses.
"In view of the specific trading recommendations provided in videos and private groups and chats, the activities being undertaken in the name of 'Baap of Chart' cannot be construed as being educational in nature. Thus, the argument that the intent was to educate investors, and recommendations on specific trades were not shared, is not tenable," SEBI says.
Last year in October, SEBI directed these seven to cease and desist from acting as or holding themselves out to be investment advisers, whether using 'Baap of Chart' or otherwise.
As can be observed, contrary to Mr Ansari's claims that he had been making profits of 20%-30%, he, in fact, incurred a net trading loss amounting to Rs2.89 crore for the period 1 January 2021 to 7 July 2023.
"Through his offline or online 'classes' as well as his videos and messages on social media, Mr Ansari presents himself as a stock market expert and claims BoC recommendations have 95% accuracy, whereas he himself could not make any overall profit in his personal capacity through trading in securities over a period of 2.5 years," SEBI says adding, "...the claims of certainty or near-certainty on returns on his trading calls or 'educational videos' were not supported by his individual record of trading in the securities market."
