New Delhi: The Securities and Exchange Board of India (SEBI) has ordered Avadhut Sathe Trading Academy Private Limited and its founder, Avadhut Sathe, to refund ₹546.17 crore collected through investment advisory and research activities carried out without the required registration.
The regulator has also barred Avadhut Sathe from the securities market for two years or until the refund order is complied with, whichever is later. Gouri Avadhut Sathe, a director of the academy, has been barred for six months.
The academy and its founder must deposit the refund amount in a separate bank account within five months of receiving the order. They have also been asked to publish notices in English, Hindi and a widely circulated local-language newspaper within 30 days. The notices must explain how investors can seek their money back.
₹11.5 Crore Penalty Also Imposed
The refund is not the only financial action taken by SEBI. It has imposed a total penalty of ₹11.5 crore on the academy and the two individuals.
ASTPL has been fined ₹6 crore, while Avadhut Sathe faces a penalty of ₹4 crore. Gouri Sathe has been fined ₹1.5 crore. The penalties must be paid within 45 days of receiving the order.
SEBI has specified that refunds must be made through electronic transfers or other banking channels that leave a clear record of each payment. This is intended to help identify the investors receiving their money.
If funds remain after the refund process, they will be handed over to SEBI and kept in escrow for one year so that further claims from clients and complainants can be considered. Any amount still left will go to the Investor Protection and Education Fund.
The order also directs that debit transactions from the bank accounts of those named in it remain frozen until the required deposits are made.
What Led to the Action?
SEBI began its investigation after raising concerns that the academy’s activities went beyond stock-market education. According to the regulator, the academy and its founder allegedly gave stock-specific recommendations and trading calls without the registrations required for such services.
These included suggested entry and exit points, stop-loss levels and forecasts on price movements.
SEBI also questioned the academy’s promotional material, which allegedly highlighted profitable trades and advertised high returns. The regulator noted that such promotions continued even after an administrative warning in March 2024.
The order focuses on the distinction between teaching people about the stock market and providing regulated investment advice. SEBI’s action follows its findings that the activities under investigation crossed that line.