Markets regulator Sebi on Friday directed Avadhut Sathe Trading Academy Pvt Ltd (ASTAPL) and its Founder Avadhut Sathe to refund ₹546.17 crore collected from participants for providing unregistered investment advisory and research analyst services, along with interest of ₹67.87 crore.
The regulator has also barred the academy and Sathe from accessing the securities market for two years or until compliance with the refund direction, whichever is later.
In its 171-page final order, the regulator imposed a total penalty of ₹11.5 crore on the academy, Sathe and Gouri Avadhut Sathe for violations of securities market regulations.
The academy has been fined ₹6 crore, Sathe has been fined ₹4 crore, while Gouri Avadhut Sathe has been penalised ₹1.5 crore.
The regulator found that the academy and Sathe provided investment advice and research recommendations through paid programmes, sessions and WhatsApp groups without obtaining the required registration.
It also found that misleading promotional representations about returns were used to attract participants and that investment advice was provided without assessing the suitability of recommendations for recipients.
The order said the academy and Sathe had collected around ₹601.38 crore from course participants since inception. However, based on the evidence examined, fees of ₹546.17 crore attributable to the relevant programmes were identified for disgorgement and refund.
Sebi has directed the academy and Sathe to complete the refunds within five months of receiving the order. They have also been asked to publish notices in newspapers within 30 days, explaining the procedure for investors to claim refunds.
The regulator has further directed that their bank accounts remain frozen for debits until the required amounts are deposited into the designated account and Sebi’s Investor Protection and Education Fund, as applicable.
Gouri Avadhut Sathe has been barred from accessing the securities market for six months. Sebi said her liability arose from a failure to exercise oversight.
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