In a fresh crackdown on finfluencers, SEBI has issued final order against seven entities, including Baap of Chart (BOC), a once-popular social media page in the trading community. The regulator has convicted seven entities, associated with the channel, of perpetrating a ₹17.2 crore fraud. It imposed a total penalty of ₹32 lakh on the noticees in its Monday evening order, while the BOC founder MN Ansari fined ₹20 lakh.

Additionally, SEBI has directed the seven entities, including Ansari, Rahul Rao Padamati, Tabraiz Abdullah, a CA who helped Ansari in his early years of building BOC, Asif Iqbal Wani, Mansha Abdullah, Vamshi Jadav, and their firm, Golden Syndicate Ventures (GSVPL), to refund the entire amount within three months.

SEBI has ordered that an escrow account at a scheduled bank must be opened to facilitate refunds and ensure audit trails for all payments. Within 15 days, leading national and regional newspapers must publish public notices in Hindi, English, and a vernacular language outlining the refund process.

The individuals have also been barred from accessing the securities market for six months to a year. SEBI has frozen their bank accounts to secure funds for investor repayments.

The regulator held Mohammad Nasiruddin Ansari, who called himself and started the Baap of Chart across social media platforms, and his six associates guilty of collecting ₹17.2 crore through unauthorised investment advisory activities in the guise of dispensing educational services to its students and investors.

SEBI found their activities in violation of its Investment Adviser (IA) regulations and Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms, turning the spotlight on SEBI’s bitter take on financial influencers posing as trading experts on social media platforms.

The action stems from SEBI’s interim order in October 2023, which flagged the group’s unauthorised activities as ‘misleading and detrimental to market integrity’.

The regulator began its investigation into Baap of Chart (BoC) after receiving a complaint alleging that Ansari, the face of the BOC channel and its pages across social media platforms, was misleading retail investors with promises of assured returns on the stock market, despite incurring losses personally.

Ansari amassed a large following, including 4.4 lakh subscribers on YouTube with over 7 crore views. Through platforms like YouTube, Instagram, WhatsApp, and X (formerly Twitter), Ansari promoted paid courses under the pretence of educational content but provided specific buy/sell recommendations.

The courses promised unrealistic returns, including some of his claims of 200-300% profits on trading Bank Nifty. The investigation instead found out that Ansari himself had incurred net trading losses of ₹2.89 crore between January 2021 and July 2023.

Immediately after the interim October order, once known for posting trading updates and bold claims of growing his funds to ₹1,000 crore, Ansari shifted to sharing motivational quotes. Further, since October, his YouTube subscriber base has dropped significantly to 3.3 lakh, with recent videos garnering fewer than 1,000 views.

In its final order, SEBI noted that Ansari failed to comply with the market regulator’s interim order and highlighted how BoC attempted to ‘whitewash its illegality’.

Since August, SEBI has issued orders, including demand and recovery proceedings orders, against over 12 entities for violations of unregulated investment advisory services.