SEBI Orders Avadhut Sathe Trading Academy To Refund ₹546 Crore Over Unregistered Investment Advisory Services

The Securities and Exchange Board of India on Friday directed Avadhut Sathe Trading Academy Private Limited (ASTAPL) and its founder/ financial influencer, Avadhut Dinkar Sathe, to refund ₹546.17 crore collected from participants for allegedly providing unregistered investment advisory and research analyst services under the guise of stock market education.

SEBI's Quasi Judicial Authority N Murugan also imposed a total monetary penalty of ₹11.5 crore on the academy, Sathe and director Gouri Avadhut Sathe for violations relating to unregistered investment advisory and research analyst activities and fraudulent and unfair trade practices.

SEBI initiated proceedings against ASTAPL, Avadhut Dinkar Sathe and Gouri Avadhut Sathe over alleged unregistered investment advisory and research analyst activities and fraudulent practices in the securities market.

The proceedings arose from an interim order-cum-show cause notice dated December 4, 2025. SEBI alleged that ASTAPL and Sathe provided specific stock recommendations, entry and exit targets, stop-loss levels and trading strategies during live market sessions and through WhatsApp groups without the requisite registration.

SEBI further alleged that the academy selectively publicised profitable trades and participant testimonials on social media to portray unusually high returns, despite finding that the participants had incurred net losses. It had issued an administrative warning on March 1, 2024, cautioning the academy against misrepresentation and selective disclosures.

According to SEBI, ASTAPL and Sathe collected approximately ₹601.37 crore in course fees between July 2015 and October 2025, allegedly by inducing participants through misleading representations about trading profits. The regulator appointed an investigating authority on July 24, 2025, to examine their activities, following which, search and seizure operations were conducted.

The noticees denied the allegations, contending that ASTAPL provided structured financial market education and that live trading demonstrations and WhatsApp discussions were intended to develop independent trading skills. They also contended that the fees were charged for a comprehensive educational programme rather than for stock tips or trading recommendations.

With respect to the allegation that the academy provided stop-loss levels and trading strategies, the Authority noted that participants were asked to observe how the instructor formed his market view rather than independently analyse securities. The instructor disclosed that he had purchased the stock that day and cited technical indicators, including a double-bottom pattern, bullish divergence, above-average volume and weekly and monthly trend alignment, to support his conclusion.

The Authority observed that although the programme contained educational elements, the instructor also identified specific securities, forecast price movements, executed live trades, set real-time alerts and provided specific targets and support or resistance levels. He held that describing the programme as educational did not alter the regulatory nature of these activities, which independently fell within the definitions under the Investment Adviser and Research Analyst Regulations.

On the allegation of providing stock recommendations through WhatsApp, the Authority noted that participants could access the private WhatsApp groups only by paying an annual fee under the mentorship programme. The groups allegedly carried stock recommendations, including entry and exit points, stop-loss levels and price movement forecasts. As the Noticees had not disputed the allegation, the Authority held that they provided investment advice for consideration through these groups, thereby attracting the Investment Adviser and Research Analyst Regulations.

“I therefore note that certain communications by AS are in the nature of providing trading recommendations and specific market analysis, including option strikes, break-even levels; expected profit calculations and directional views. AS also shares trades executed by him, positions presently beld and adjustments proposed to those positions. These features support the conclusion that the communications include simultaneous trading guidance delivered through the mentorship exchanges,” it observed

On whether the academy's services were wholly educational, the Authority held that the impugned communications amounted to investment advice or research recommendations and did not qualify for the applicable exemptions. It further held:

"none of the Noticees are registered with SEBI in the capacity of Investment Advisor or Research Analyst or in the capacity of any other intermediaries, Hence, | find that the activities carried out by ASTA, without holding the certificate of répistration as an investment advisor or reséarch analyst are in violation of Section 12(1) of the SEBI Act read with Regulation 3(1)-of the LA and RA Regulations.”

Ultimately, the Authority held Avadhut Sathe responsible for ASTAPL's contraventions under Section 27(1) of the SEBI Act.

“AS played the principal role in devising and implementing the arrangement through which the services were provided. He personally conducted the sessions and communicated recommendations to participants. His role establishes that he was in charge of, and responsible to, ASTAPL for the conduct of the business involving these activities. His personal involvement also establishes his knowledge of their conduct.” he added

The Authority also held Gouri Avadhut Sathe liable for ASTAPL's contraventions under Section 27(1) of the SEBI Act, citing her involvement in the company's day-to-day affairs.

It identified ₹546.17 crore as the amount attributable to the relevant programmes and directed the academy and Avadhut Sathe to refund the amount jointly and severally.

Apart from directing the noticees to cease and desist from offering unregistered investment advisory and research analyst services and prohibited them from using live or historical data that provides future directional movement for a specified security, the regulator imposed a monetary penalty of ₹6 crore on the academy, 4 crore on Avadhut Sathe and ₹1.50 crore on Gouri Sathe.