26-Oct-2023
2 mins read
In its ongoing efforts to regulate online financial influencers, commonly referred to as ‘finfluencers,’ the SEBI has recently taken a significant step. On October 25, 2023, SEBI barred Mohammad Nasiruddin Ansari, the owner of ‘Baap of Chart,’ from participating in the securities market. Ansari, who purported to provide educational training related to the securities market, was found to be offering stock recommendations through social media, promising guaranteed returns to investors. The regulator has also ordered Ansari to return Rs 17.2 crore, which he allegedly earned through misleading practices.
Who is Mohammad Nasiruddin Ansari?
Mohammad Nasiruddin Ansari is the sole proprietor of ‘Baap of Chart’ (BoC). He marketed himself as a stock market expert on various social media platforms and enticed investors to enrol in his “educational courses.” Ansari made enticing promises of certain returns if investors followed his recommendations for securities market investments.
Ansari’s Modus Operandi
SEBI’s investigation unveiled that Ansari was disseminating stock recommendations (buy/sell) through BoC across multiple social media platforms, including YouTube, X (formerly Twitter), Instagram, WhatsApp, and Telegram. He encouraged investors to sign up for his courses, which were offered through a platform provided by Bunch Microtechnologies Pvt Ltd. Ansari offered 19 courses related to the securities market, with four of them guaranteeing returns. His students interacted with “tutors” in real time through a chat function on the Bunch platform. Ansari also provided buy/sell recommendations in private groups.
Financial Transactions and Involvement of Others
The funds collected from investors were credited to the bank accounts of Ansari, BoC, Golden Syndicate Ventures Pvt Ltd (a company in which Ansari holds a significant stake), and P Rahul Rao (another major shareholder of Golden Syndicate Ventures). SEBI also named four other directors of Golden Syndicate Ventures who were allegedly involved in unregistered investment advisory activities. Money was credited to these individuals’ accounts as well.
Baap of Chart’s Online Presence
Ansari’s YouTube channel boasts more than 4.43 lakh subscribers and over 7 crore views. He also operates a Telegram group/channel, ‘Baap Of Chart Option Hedging,’ with around 53,000 subscribers. His Instagram and X accounts, under the name ‘baap of chart,’ have approximately 59,000 and 78,000 followers, respectively. His WhatsApp channel has more than 13,000 followers.
Financial Gains
According to SEBI’s investigation, Ansari collected Rs 13.78 crore from courses and workshops listed on Bunch’s platform and mobile apps. This entire amount is considered fees received from fraudulent and unregistered investment advisory activities. An additional Rs 3.42 crore was collected through two UPI IDs linked to Ansari and BoC’s accounts in Kotak Mahindra Bank. These UPI IDs were publicised on the website and social media channels. The notices collected Rs 17.2 crore from investors through misleading information and false claims, inducing them to invest in courses and engage in securities trading.
SEBI’s Accusations
In its interim order, SEBI accused Ansari and BoC of intentionally portraying their advisory activities as educational. SEBI noted that their promotional content appeared designed to attract gullible viewers with false promises of extraordinary returns, ultimately luring them to trade in the securities market. SEBI considers this activity fraudulent, suggesting that Ansari and BoC sought to profit by inducing individuals to invest based on their advice.
Key Takeaway for Investors
This case is a stark reminder for investors to exercise caution when seeking financial advice from online sources. It is vital to deal with registered investment advisors certified by SEBI to safeguard one’s investments and interests. SEBI has established stringent conditions for the registration of investment advisors, including requirements for educational qualifications and a code of conduct. Currently, there are 1,313 SEBI-registered investment advisors to choose from when seeking financial guidance.