Capital markets regulator Securities and Exchange Board of India (SEBI) has banned Mohammad Nasiruddin Ansari from the securities market, while also directing him to pay ₹17.2 crore worth of unlawful gains in the "garb of providing educational training related to the securities market".
SEBI in its order says it had initiated an examination against Nasir, who runs social media channels on different platforms by the name of 'Baap of Chart', to ascertain if he is engaged in offering investment advisory services without SEBI registration on such platforms, which is the violation of SEBI rules. The probe period spanned from January 01, 2021–July 07, 2023.
"Noticees shall cease and desist from acting as or holding themselves out to be investment advisors, whether using ‘Baap of Chart’ or otherwise. They will cease to solicit or undertake such activity or any other unregistered or fraudulent activity in the securities market, directly or indirectly," says the SEBI order signed by Ananth Narayan G, whole-time member.
Noticee Nos. 1, 2 and 5 (Mohammad Nasiruddin Ansari, Rahul Rao Padamati, and Golden Syndicate Ventures Pvt. Ltd.) are also restrained from buying, selling or dealing in securities either directly or indirectly until further orders. The proceeds in their bank accounts to the extent of "illegal gains" will be impounded, the order says. They have been directed not to divert any funds raised from investors, or dispose of or alienate funds.
SEBI found Nasir promotes himself as a stock market expert on social media and lures investors to enrol for various ‘educational courses’ offered by him. He also induces them to invest in the securities market by promising profits with "near certainty" if the recommendation or advice is followed, the order says.
Nasir has also uploaded his ‘educational courses’ on his website or apps via the application provided by Bunch Microtechnologies Private Ltd, wherein he collects money for enrolment in the said courses and provides access to his ‘classes’ to investors or clients.
Apart from this, Nasir is also found to be providing buy or sell recommendations in private groups. "The amount collected for ‘educational courses’ was credited into the bank accounts of Nasir, BoC, Golden Syndicate Ventures Pvt. Ltd.(in which Nasir is a significant shareholder)and P. Rahul Rao(another significant shareholder of Golden Syndicate Ventures Pvt. Ltd.).
"During the course of examination, it was observed that through the videos or pictures posted on his YouTube Channel or Twitter, Nasir was luring people to enrol for his ‘educational courses’," says SEBI, adding that Nasir also organises physical workshops in various cities for ‘educating’ his clients.
Tightening the noose around the unregulated 'finfluencers' in India, the capital markets regulator in September proposed to restrict the association of registered entities with such financial influencers and has also proposed a unique fee payment platform for registered investment advisers or research analysts.
The SEBI proposal came via a consultation paper, which was released more than a month after Fortune India reported about reluctance on the part of 'finfluencers' to register themselves with regulators, and how this burgeoning tribe of self-proclaimed financial experts is plaguing the internet.
SEBI says ‘finfluencers’ who are not registered with the relevant financial sector regulator may not have the "requisite qualifications or expertise" on the subject. "Worse, not being formally subject to a financial sector regulator’s code of conduct, they may not disclose any potential conflict of interest such as their association with or interest in the products, services or securities that they promote."
Financial influencers, commonly called ‘finfluencers’, are those who provide information and advice on financial topics such as investing in securities, personal finance, banking products, insurance, real estate investment, etc., through social media, and have the ability to influence followers’ financial decisions.
