Markets trader Avadhut Sathe, director of Avadhut Sathe Trading Academy Private Limited (ASTAPL), will reportedly challenge the Securities and Exchange Board of India (SEBI) order against him and his academy.
The move comes days after SEBI directed Sathe and ASTA to refund ₹546.17 crore collected from participants for providing unregistered investment advisory and research analyst services, along with interest of ₹67.87 crore.
While the SEBI order found that ASTA had provided unregistered investment advisory and research analyst services, the academy maintained that it operated solely as a financial-market training institution.
Why may ASTA challenge SEBI order before SAT over ‘grey areas’ in stock-market education rules?
The academy used live market data only towards the end of its courses to explain students how to apply the concepts they had learnt, and these demonstrations accounted for approximately 3-4% of total programme hours, reported Moneycontrol citing advocate Vijay Sardana, who represented ASTA in its hearing before SEBI.
“ASTA’s position is that it has always operated solely as a training academy. None of its social media handles or channels are monetised. The social media handles were created for continuous learning,” Moneycontrol quoted Sardana.
Avadhut Sathe case highlights grey areas in regulatory framework
Avadhut Sathe’s case highlights gaps in the regulatory framework, Sardana argued during the hearing, pointing out that educational activities have not been clearly defined under SEBI’s guidelines.
According to Moneycontrol report, ASTA may challenge the regulator’s order before the Securities Appellate Tribunal (SAT), seeking greater clarity on the rules governing stock-market education.
SEBI imposes fine on Avadhut Sathe and his academy
SEBI on, October 23, directed Avadhut Sathe Trading Academy Private Limited (ASTAPL) and its founder 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 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.
SEBI order also found that the academy used misleading promotional representations about returns to attract participants and that investment advice was provided without assessing the suitability of recommendations for recipients.
