Securities and Exchange Board of India: In the instant matter, Mohammad Nasiruddin Ansari was alleged to have induced / influenced investors to deal in securities through false/ misleading information and indulged in unregistered investment advisory activities under the garb of providing educational training through sale of courses/ workshop services.
Background:
Mohammad Nasiruddin Ansari (‘Nasir’) used to provide recommendations to buy and sell securities in the securities market. He was the sole proprietor of the firm “Baap of Chart” (‘BoC’).
Nasir promoted himself as a stock market expert on various social media platforms which lured investors/ clients to enroll for various ‘educational courses’ offered by him and induced them to invest in securities market by promising them the prospect of making profits with near certainty if the recommendation/ advice was followed.
Violations of the provisions of:
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Securities and Exchange Board of India (Investment Advisers) Regulations, 2013
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Securities and Exchange Board of India Act, 1992
According to the provisions of the above-mentioned Act and Regulations, no person can act as an investment adviser or hold out as an investment adviser unless he has obtained a certificate of registration from the Board.
In the instant case, Nasir’s activity of engaging in business of providing investment advice for consideration and inducing the clients to subscribe to the courses/ workshops and adding them to closed groups wherein recommendations/ personal guidance by Nasir was given to the clients for consideration amounts to “investment advice” and “investment adviser” which violates the above-mentioned regulations.
Observations:
It was observed that Nasir has uploaded his ‘educational courses’ on website/ apps through the application services provided by Bunch Microtechnologies Private Limited wherein he was collecting money for enrolment in the said courses and providing access to his ‘classes’ to investors/ clients.
Nasir was also found to be providing buy/ sell recommendations in private groups of his investors/ clients.
Further, it was observed that the amount collected for ‘educational courses’ was credited into the bank accounts of Nasir, BoC, Golden Syndicate Ventures Pvt. Ltd. (company in which Nasir is a significant shareholder) and P. Rahul Rao (another significant shareholder of Golden Syndicate Ventures Pvt. Ltd.). Razorpay being his payment aggregator.
The Board observed that through the videos/ pictures posted on his YouTube Channel/ Twitter, Nasir was luring people to enroll for his ‘educational courses’ offered through a website/ application.
Order:
Mohammad Nasiruddin Ansari, Rahul Rao Padamati and Golden Syndicate Ventures Pvt. Ltd. were directed to:
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Temporarily cease and abstained from securities market.
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To deposit the amount of Rs. 17.2 crores in an escrow account within 15 days.
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Not to divert any funds raised from investors until further orders.
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Not to dispose of or alienate any assets.
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To provide a full inventory of all assets held in their names, jointly or severally, whether movable or immovable, or any interest or investment or charge on any of such assets, including details of all bank accounts, demat accounts and mutual fund investments, within 15 days from the date of receipt of this Order.
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The banks of the noticees have been directed not to make any debits from their accounts without the permission of SEBI.
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To immediately withdraw public access to all advertisements, representations, literatures, brochures, materials, publications, documents, communication, etc., in relation to their investment advisory activities/ workshops or any other unregistered activity in the securities market.
