The market regulatory authority, SEBI (Securities and Exchange Board of India), has made a substantial stride by initiating actions against Mohammad Naseeruddin Ansari, a well-known financial influencer recognized for his YouTube channel ‘Baap of Charts.’ The recent actions by SEBI have drawn considerable interest, stemming from the accusations against Ansari and their wider ramifications for the financial influencer landscape in India.
SEBI has accused Md Nasir of offering trading recommendations under the guise of educational courses, for which charges were imposed.
Who is Mohammad Nasiruddin Ansari?
Mohammad Nasiruddin Ansari is the sole proprietor of ‘Baap of Chart’ (BoC). ” Ansari offered enticing assurances of guaranteed returns to investors who followed his guidance on stock market investments.
Allegations Against Nasiruddin Ansari:
SEBI’s actions against Ansari are primarily based on allegations of deceptive practices, unethical financial guidance, and the misrepresentation of trading performance.
- Providing Trading Recommendations Under False Pretenses: One of the central allegations against Ansari is that he offered trading recommendations to his followers, presenting them as part of educational courses for which fees were charged. While offering paid courses and advice is common among financial influencers, the core issue is Ansari’s alleged use of misleading or false information to attract customers and investors.
- Misrepresentation of Trading Performance: Another significant allegation revolves around the misrepresentation of Ansari’s trading performance. According to SEBI’s investigation, Ansari claimed to have achieved remarkable results, including profits ranging from 20% to 30% and an accuracy rate of 95%. The investigation’s actual findings showed that Ansari had suffered a net trading loss of Rs 2.89 crore from January 2021 to July 2023. This starkly contradicted his proclaimed achievements and raised concerns about the accuracy and transparency of his claims.
The Case Against Baap of Chart:
SEBI’s investigation revealed that Ansari was delivering stock market courses through websites and apps utilizing services provided by Bunch Microtechnologies Private Limited. Bunch informed SEBI that the courses offered on its platform included chat functionality, enabling tutors to interact with students in real time. SEBI’s examination of chat messages within ‘Baap of Chart’ groups exposed Ansari’s issuance of buy/sell/hold advice disguised as educational courses.
Furthermore, SEBI observed that in the course descriptions, Ansari asserted that the strategies taught would guarantee profits. During the investigation, SEBI received a complaint against Ansari, alleging that he charged the complainant Rs. 6000 for a strategy. The complainant provided screenshots from Ansari’s WhatsApp group, corroborating SEBI’s findings that Ansari enticed individuals to invest by promising profits.
While Baap of Chart’s website did include a disclaimer, SEBI found the assertions within the disclaimer to be unclear. While the website disclaimed educational content, Baap of Chart targeted individuals seeking consistent “profits,” raising concerns about its promotion. SEBI underlines that disclaimers do not exempt individuals from complying with laws against unregistered investment advice and securities market manipulation.
‘Baap of Charts’ and Its Influence:
‘Baap of Charts’ is a prominent YouTube channel known for its substantial following. With over 443,000 subscribers, ‘Bap of Charts’ stands as a significant platform for financial advice and recommendations. Additionally, Ansari had approximately 83,000 followers on X (formerly Twitter), further extending his outreach.
The core content featured on ‘Baap of Charts’ primarily revolves around trading recommendations and educational courses.
Recognized for providing stock market insights supported by technical and fundamental analysis, financial influencers like Ansari.
Are there any other person been named in the scam?
SEBI’s investigation revealed that the funds collected from investors were deposited into the bank accounts of Ansari, BoC, and Golden Syndicate Ventures Pvt Ltd. Ansari holds a substantial stake in the company. The SEBI order mentions P Rahul Rao, who is another significant shareholder of Golden Syndicate Ventures.
SEBI has also named four other directors of Golden Syndicate Ventures, specifically Asif Iqbal Wani, Tabraiz Abdullah, Mansha Abdullah, and Vamshi Jadhav. These four individuals also received money in their accounts.
Key Takeaway for Investors
This case serves as a clear reminder for investors to exercise prudence when seeking financial guidance from online platforms. SEBI has stringent criteria for advisor registration, including education and conduct standards. SEBI has established stringent registration criteria for investment advisors, including educational qualifications and a strict code of conduct. Presently, investors have a choice of 1,313 SEBI-registered investment advisors when seeking reliable financial advice.
SEBI’s ₹17 crore penalty against the “Baap of Charts” highlights the importance of ethical and transparent practices in the financial influencer industry. It serves as a reminder of the need for vigilance and regulatory compliance in the ever-evolving landscape of online financial advice.