Baap of Chart selling illegal investment advice under the garb of education: Sebi

Ansari, Rahul Rao Padamati and Golden Syndicate Ventures Pvt. Ltd. have been asked to deposit over Rs 17.20 crore in an escrow account collected from carrying out unregistered and fraudulent illegal advisory service. The three have also been restrained from accessing the securities market until further orders.

The evaluation

In the order, the Sebi Whole-time Member Ananth Narayan stated that an evaluation of Nasir’s activities had to be done to see if he was giving advice and inducing to trade couches as offline and online education.

For this, his offline and online activities were evaluated.

Under offline activities, the order mentioned a workshop that had a video posted of it on YouTube. The video was titled “Rs. 80,000/- Profit in live trading with 500+ students”.

Under online activities, the regulator went through the websites and apps his team manages.

As the payment aggregator, Razorpay was asked to provide information about entities operating the websites under investigation. The aggregator informed SEBI that Bunch Microtechnologies Private Limited (Bunch) was the merchant for the aforementioned links and that Bunch had onboarded “Baap of Chart” as a content creator.

Modus Operandi

Bunch informed SEBI that it provides application services to educators/ tutors/ content creators and that the tutor may opt for the creation of an application and/ or web page to list their courses and that the tutor’s students can purchase such courses from the application. The payments made by the students on the application are facilitated through Razorpay.

, Bunch informed SEBI that in the courses offered on its platform, chat functionality is provided wherein tutors can connect with students and share information/ documents/ content and communicate in real time. For the courses sold on this platform, a private group is created for the clients/ investors who purchased the courses. Bunch informed that these are closed chat groups in which the tutor determines who may or may not participate

Further, Bunch also informed that the tutor has the freedom to create chat groups as it required and may as required delete, add or modify any parameters of the chat (such as title of the chat group, permitted participants, content or topics discussed on the chat, deletion of chats etc.).

From the chat messages posted on such a group, the regulator observed, “he (Nasir) is providing buy/ sell/ hold recommendations in securities to his clients/ investors under the garb of providing courses related to securities market”.

The order added that the description of the courses showed that Nasir was promising assured profits from his courses.

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During the investigation, the regulator also received a complaint against Nasir/BoC that claimed that he was “looting retail traders” by showing assured returns, and the complainant said that he/she had paid Rs 6,000 for such a strategy, which came with a guarantee against a loss—a guarantee of a refund of 3x the fee paid if the client suffered a loss.

Given all this, the order stated, “Nasir is giving recommendations to the clients in private groups and luring investors/ clients to invest in the securities market by assuring returns.”