SEBI’S Action on Finfluencer: The Securities and Exchange Board of India (SEBI) has taken strong action against seven entities linked to Baap of Chart (BOC), a popular social media trading channel. These individuals, led by BOC’s founder Mohammad Nasiruddin Ansari, have been accused of defrauding investors of 17.2 crore through unauthorized investment advisory services. SEBI has imposed a 32 lakh penalty and ordered them to refund the full amount to the affected investors.
Fines Imposed and Refunds Ordered
The penalties include a 20 lakh fine on Ansari, who was the face of the BOC platform. Other individuals involved, such as Rahul Rao Padamati, Tabraiz Abdullah, and others, have also been fined. SEBI has ordered these entities to refund the money within three months. They must open an escrow account at a scheduled bank to ensure the process is transparent, with payments audited.
Ban on Market Access and Frozen Accounts
SEBI has banned Ansari and his associates from accessing the securities market for six months to one year. Their bank accounts have been frozen to secure funds for investor repayments. Additionally, they must publish public notices in national and regional newspapers within 15 days, informing investors about the refund process.
Investigation Uncovers Misleading Practices
The investigation began after a complaint highlighted BOC’s misleading practices. Ansari, who built a large following on YouTube (4.4 lakh subscribers) and other platforms, promoted paid trading courses under the guise of educational content. He made claims of high returns, such as 200-300% profits on Bank Nifty trades, but SEBI found that Ansari had actually incurred significant trading losses of 2.89 crore between 2021 and 2023.
Shift in Strategy and Declining Popularity
In response to SEBI’s interim order in October 2023, Ansari shifted to sharing motivational quotes, and his popularity dropped. His YouTube subscriber count fell from 4.4 lakh to 3.3 lakh, and his recent videos received fewer views.
SEBI’s Crackdown on Unauthorized Finfluencers
SEBI’s final order emphasizes that Ansari and his associates violated investment advisory regulations and market integrity norms. This case is part of a larger crackdown on unauthorized financial influencers who mislead retail investors on social media.
Wider Crackdown on Investment Advisory Services
Since August 2023, SEBI has taken action against more than 12 entities for offering unregulated investment advisory services. The regulator’s latest action highlights its tough stance on such financial influencers posing as market experts.
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