Sebi fines investment advisor for 'sensational' YouTube captions

Sebi highlighted multiple lapses, including the firm's failure to conduct an annual audit and its practice of charging clients fees in both fixed and assets-under-advice (AUA) modes

Exaggerated YouTube video captions have landed investment adviser Basant Maheshwari in regulatory trouble. The Securities and Exchange Board of India (Sebi) has imposed a penalty of ₹4 lakh on Basant Maheshwari Wealth Advisers for alleged violations of investment adviser norms and non-compliance with the advertisement code.

 

In its order, Sebi highlighted multiple lapses, including the firm’s failure to conduct an annual audit and its practice of charging clients in both fixed and assets-under-advice (AUA) modes. Under existing regulations, advisers are allowed to have one fee structure.

 

The findings stem from inspections conducted by Sebi between October and December 2023.

 

 

Maheshwari’s YouTube videos, featuring captions such as 10 Saal Mein 10 Guna Aur 20 Saal Mein 100 Guna!! Kaise Kare?? (How to make 10x in 10 years and 100x in 20 years), 1 Crore Ko Double Kaise Kare? (How to double ₹1 crore), and Kaise Banaya ₹150 Crore Sirf Trading Kar Ke? (How to make ₹150 crore just by trading), drew the regulator’s attention.

 

Sebi noted that these videos included links to Maheshwari’s smallcase portfolio, effectively classifying them as advertisements aimed at influencing investors.

 

The regulator pointed out that the disclaimers in these videos were inadequate, lacking prominence and consistency across YouTube description boxes.

 

In his defence, Maheshwari argued before Sebi that the videos were intended to educate viewers and protect them from misleading sources. He contended that the regulator’s recently introduced “finfluencer” (financial influencer) norms do not apply to individuals engaged in investor education.

 

Maheshwari had initially filed a settlement application with Sebi but withdrew it later.

 

The order comes at a time when Sebi has heightened its scrutiny of social media content, promotions, particularly from unregistered advisers.

 

Over the past six months, the regulator has removed more than 70,000 misleading social media posts and handles. 

 

Additionally, rising cases of manipulation and fraud prompted Sebi to mandate intermediaries to register with platform providers like Google and Meta for publishing advertisements. The step aims to enhance transparency, verify advertisement authenticity, and curb fraudulent practices in the financial advisory space.