Mkt regulator Sebi cracks down on 'Options Queen', others for illegal gains

Directs them to disgorge Rs 53.67 cr

The Securities and Exchange Board of India (Sebi) has directed Asmita Patel Global School of Trading and five other entities to disgorge illegal gains amounting to almost Rs 54 crore.

 

This action is in response to allegations that the entities were operating unregistered investment advisory and research analyst businesses.

 

The disgorgement amount may be increased to Rs 105 crore, inclusive of interest, following the completion of the matter, according to the show cause notice-cum-ex-parte interim order. This includes funds collected as fees for various trading courses offered by the firm.

 

Asmita Patel, who styled herself as the “Options Queen,” had a significant online presence with over 526,000 subscribers on YouTube and over 290,000 on Instagram.

 

She also shared trading recommendations through Telegram channels, which were subscribed to by course participants.

 

Sebi has barred Asmita and her husband Jitesh Patel from the securities market until further notice. Jitesh was a director in the firm. Additionally, three proprietary firms and their proprietors have been debarred from the market.

 

Patel, who was also an ‘authorised person’ with a stockbroker, ran several trading courses through her school. The regulatory action was prompted by complaints from 42 participants of these courses.

 

The Sebi order reveals that Asmita earned a net profit of Rs 12.3 lakh during 2019-20 up to January 2024 through trading. This figure starkly contrasts her claim of managing funds worth hundreds of crores through her proprietary system.

 

Sebi has directed the entities to cease and desist from offering unregistered investment advisory and research analyst services.

 

The order states that if the firm had been providing purely educational services, there would have been no cause for action. However, the case appears to involve more than just educational activities.

 

Sebi has also alleged that Asmita induced people to prefer trading instead of taking jobs and suggested exiting mutual fund investments or taking loans for enrolling for the course and for trading. 

 

Participants were allegedly attracted to the courses through false claims about the funds being managed. Sebi has also alleged that assurances of guaranteed returns were made, which do not align with educational activities.

 

The order emphasises that providing stock-specific advice falls outside the scope of educational services and is within the domain of investment advisory and research analyst activities.

 

“Confidence in the capital market can be sustained largely by ensuring investor protection and enhancing investor trust. However, the facts of this case glaringly reveal how investor trust has been compromised and how the system has been abused for personal gains by devising ways to circumvent legal provisions,” said Kamlesh Varshney, whole-time member of Sebi, in the order.  The trading school has filed a suo motu settlement application in the matter. However, Sebi clarified that filing for settlement does not preclude the initiation of proceedings, and there is no legal bar on passing the order.

 

CASE FILE

  Participants were attracted to the courses through false claims 

Mobilised significant online presence with 526,000 subscribers on YouTube, 290,000 on Instagram

  Asmita Patel (pictured) claimed to manage hundreds of crores of funds  Patel and her husband barred from the securities market  Asked to disgorge illegal gains of Rs 54 crore; the amountcould rise to Rs 105 cr