Sebi disputes finfluencer Avadhut Sathe’s ‘regulatory vacuum’ claim, reiterates clarity on stock-tip rules

New Delhi: The Securities and Exchange Board of India (Sebi) chair Tuhin Kanta Pandey has dismissed claims of a “regulatory vacuum” made by Avadhut Sathe Trading Academy (ASTA), days after the regulator barred the firm from the securities market.

“There is no regulatory vacuum, there is a lack of understanding because the regulations are clear that you cannot give stock tip advice,” Pandey said at a National Stock Exchange event, as per the Livemint report.

His comments followed Sebi’s interim ex-parte order on Thursday, which restricted Avadhut Sathe and ASTA from dealing in securities for allegedly offering unregistered investment advisory services and generating illegal gains of Rs 546 crore. 

The order marked one of the regulator’s most significant actions against a finfluencer-led operation, noting that ASTA’s activities blurred the distinction between training and actionable investment guidance.

ASTA responded by stating it was “a victim of regulatory vacuum”, arguing that it does not issue stock tips, recommendations or research and that its illustrations are purely for “conceptual clarity”. It added that it would challenge the order and trusted the judicial process.

“We are a victim of a regulatory vacuum and do not fall under the category of research analyst or investment adviser,” an ASTA spokesperson said.

Sebi’s findings pointed to a set-up resembling an advisory business rather than an educational unit. A search operation in August at ASTA’s premises and at the homes of Sathe and his wife uncovered live trading rooms, where participants received specific intraday signals, trading levels, stop losses, resistance points and strategy cues.

Recordings reviewed by the regulator showed students acting on Sathe’s directions in real time.

The regulator also reviewed the post-training outcomes of mentorship participants over six months. Of the 311 trainees, PAN details for 186 were matched, and these individuals collectively lost Rs 1.93 crore. ASTA itself reported a loss of Rs 1.89 crore, while Sathe recorded personal trading losses of Rs 4.31 crore across FY24-25 and FY25-26.

Pandey cautioned against presenting real-time market data as an educational tool. “Live data should not be used at all for educational purposes,” he said. “You must have seen something; recently we saw in some orders of Sebi, that we will have to face the truth, and the truth is that people are very hesitant to speak the truth.”

Pandey pointed to a broader structural challenge in which regulated intermediaries, including registered investment advisers and research analysts, are prevented from showing past performance, while unregistered operators continue to make unverified claims.

“Investors want to know what their past record is, and we can’t let them know their past record because what is its verification? If I can do anything self-claimed, I can show my good advice; I can choose not to show my bad advice,” he said.

He made the comments at the pilot launch of the Past Risk and Return Verification Agency (PaRRVA), a Sebi initiative created to authenticate the risk-return records of advisers, analysts and trading members.

The framework links a Sebi-registered credit rating agency, functioning as PaRRVA, with a recognised stock exchange operating as the PaRRVA Data Centre, jointly validating performance through a standard method. Intermediaries will also be barred from showcasing verified returns for particular strategies or products.

An oversight committee will supervise both PaRRVA and the PDC to ensure adherence to verification rules and protect data. In its initial phase, the system applies to registered advisers, analysts and brokers offering algorithmic trading.

Pandey said the mechanism places India ahead of global markets on the issue of unverifiable performance claims. “With the launch of PaRRVA, India will be setting a new international benchmark for transparency, accountability and investor protection,” he said.

He added that well-regulated entities often struggle to attract clients because they cannot disclose verified track records, while unregulated players promote unchecked claims, and the new system is intended to counter this imbalance.