The Securities and Exchange Board of India (SEBI) has found that a social media platform in the name of 'Baap of Chart' (BoC) being operated by Mohammad Nasiruddin Ansari acted as an investment adviser without any registration.
The markets regulator has found that the noticees recklessly and misleadingly offered assured returns to their clients/investors under the guise of educational courses to induce them to invest in the stock market.
Nasir in his videos repeatedly refers to his experience of making profits because of the strategies he has adopted and encourages his 'students' (customers/ investors) to adhere to his strategies because of the certainty or near certainty of his recommendations/strategies.
SEBI said that the noticees shall cease and desist from acting as or holding themselves out to be investment advisers, whether using ‘Baap of Chart’ or otherwise. They shall cease to solicit or undertake such activity or any other unregistered or fraudulent activity in the securities market, directly or indirectly, in any manner whatsoever.
Some noticees have been restrained from buying, selling or dealing in securities either directly or indirectly, in any manner whatsoever until further orders.
As can be observed, contrary to Nasir’s claims that he had been making profits of 20%-30%, he in fact incurred a net trading loss amounting to Rs2.89 crore for the period 1 January 2021 to 7 July 2023.
Through his offline/online 'classes' as well as his videos and messages on social media, Nasir presents himself as a stock market expert and claims BoC recommendations has 95% accuracy, whereas Nasir himself could not make any overall profit in his personal capacity through trading in securities over a period of 2.5 years, SEBI said.
Nasir, who claims to provide strategies for trading that would lead to 200%-300% profit/assured or near-assured returns, has actually incurred a net loss of Rs2.89 crore through trading in securities and has concealed such facts from the investors in his videos/workshops/groups.
Therefore, the claim of certainty or near-certainty on returns on his trading calls/‘educational videos’ is not supported by his individual record of trading in the securities market. Such mis-selling/misleading/ false statements have the effect of inducing investors to invest in the securities market based on the misleading/ false messages that he issues.
Nasir/BoC has gone to great lengths to lend a cloak of legitimacy to their activity by describing the advisory activity as being educational in nature where strategies are provided to clients in return for fees.
One would be tempted to believe that the noticees merely adopted a unique approach for educating investors about trading in the securities market. But a closer look at the activities of the noticees prima facie reveal that that may not be the case.
The videos and messages posted by Nasir contain recommendations on strategies to adopt for trading in the securities market. They contain specific recommendations on the specific days of a week and specific times of a day during which certain securities must be traded, the SEBI order said.
Some of the messages offer personalised guidance to the customers/clients for live market transactions. Significantly, the messages and videos are also replete with assurances that following the strategies of trading would result in unnaturally high probability of clients’ profits to the point of being near-certainty despite it being well known by market participants that market investments are subject to risks and profits from trading in securities cannot be assured.
The nature of the guarantees don’t end there. Nasir, in his videos, quotes the specific odds of the success of his strategies. For some classes, the fee includes a profit sharing percentage. The theatrics and showmanship in the trailer videos on YouTube issued by Nasir/BoC appear to be aimed at creating illusion of unnatural returns by drawing in gullible and uninformed viewers to join his ‘classes’ thereby inducing them to trade in the securities market, the SEBI order said.
The YouTube channel of Nasir (@Baapofchart) has more than 443,000 subscribers and more than 70mn (million) views. As per the examination report, on analysis of certain videos posted on the said YouTube channel, it was observed that the videos were in the nature of promising quick and consistent returns through trading.
From the aforesaid messages/screenshots posted by Nasir on social media, it was observed during examination that Nasir was luring persons to subscribe to so called ‘educational courses’/ ‘workshops’ offered by him, with the objective of inducing them to deal in securities by claiming that they would make profits by adhering to the advice/ strategy rendered in his 'educational courses'.
It is prima facie concluded that the noticees have collected an amount of Rs 17.20 crore during the period January 2021 to July 2023 by luring clients/investors through misleading/ false information to purchase his courses/workshops, adding them in their closed groups and inducing/ influencing them to deal in securities.
The proceeds in the bank accounts of Noticee Nos. 1, 2 and 5, to the extent of illegal gains mentioned in para 32 above shall be impounded, jointly and severally, SEBI said.
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