Market regulator Securities and Exchange Board of India (SEBI) has barred YouTuber Ravindra Balu Bharti and his company Ravindra Bharti Education Institute Pvt Ltd from the markets until 4 April 2025. SEBI also directed them to disgorge Rs9.50 crore, the unlawful gains earned from an alleged unregistered investment advisory business with simple interest of 6%pa (per annum).
Additionally, the regulator has prohibited Mr Bharti's associates Shubhangi Ravindra Bharti, Rahul Ananta Gosavi and Dhanashri Chandrakant Giri from dealing with or accessing the securities market until 4 April 2025.
In an order, Ashwani Bhatia, whole-time member (WTM) of SEBI, says, "Mr Gosavi and Ms Giri were appointed as directors due to their involvement and knowledge of Ravindra Bharti Education Institute's activities, including investment advisory. Email records show that wealth management clients were onboarded after they took charge. They were responsible for unregistered investment advisory activities and inducement of investors and failed to provide requested information to SEBI. Consequently, Mr Bharti, Mr Gosavi, and Ms Giri are liable for a monetary penalty for violations under various sections of the SEBI Act."
SEBI's investigation found that Ravindra Bharti Education Institute, which has been operating since 2016 as its primary business, offered stock market courses and wealth management programmes, attracting clients with promises of high returns. The company charged hefty advisory fees and claimed to provide personalised investment advice, tax optimisation, retirement planning, and risk management services.
However, in practice, the company engaged in activities beyond educational services, including making specific stock recommendations and executing trades on behalf of clients. These actions were essentially those of an investment adviser, yet the Institute lacked the necessary registration to provide such services.
Ravindra Bharti Education Institute marketed high returns based on the credentials of Ravindra Balu Bharti, a financial influencer running two YouTube channels with 1.08mn (million) and 83.3mn subscribers, respectively, selling multiple plans to the same client and limiting client input in trading decisions.
The company's practices were not only misleading but also involved dubious financial dealings. SEBI's investigation found that the Institute earned Rs12.03 crore from 290 investors between March 2020 and August 2023. Clients were charged aggressive advisory fees, often invoiced multiple times on a single day.
Furthermore, clients were misled with unrealistic return projections, some as high as 1000% over 10 years and were required to allocate 100% of their funds to equity investments, irrespective of their individual financial goals or risk tolerance.
The evidence uncovered also demonstrated that Ravindra Bharti Education Institute controlled clients' trading activities. Employees of the Institute acted as intermediaries, securing pre-trade authorisations and executing trades without the client's full knowledge or informed consent. In one case, trades were executed in 18 different stocks, leading to substantial profits for the Institute, while the client was unaware of the risks or specifics of the trades.
Accordingly, SEBI has directed that all entities cease offering investment advisory services or acting as investment advisers, including under the names Ravindra Bharti Education Institute and Ravindra Bharti Wealth, unless registered with SEBI.
Additionally, SEBI has imposed a penalty of Rs15 lakh on all five entities, which will be paid jointly and severally. Another penalty of Rs5 lakh has been levied on Ravindra Bharti Education Institute, Mr Gosavi and Ms Giri, also payable jointly and severally, for regulatory violations.
