In a major crackdown on unregistered financial advisory activities, the Securities and Exchange Board of India (Sebi) has passed a stringent order against well-known stock market trainer Avadhut Sathe and his firm, Avadhut Sathe Trading Academy. The markets regulator has directed the impounding of unlawful gains amounting to a staggering ₹546.16 crore.
The Core of the Violation
The Sebi order, passed on Thursday, details that Sathe and his academy collected over ₹601 crore from participants for various courses. Investigations revealed that out of this total, ₹546 crore was specifically collected for eight courses offered between 1 January 2020 and 9 October 2025, where unregistered advisory services were allegedly provided.
Sebi observed that the activities went far beyond pure stock market education. The regulator found that Sathe and his firm were providing stock-specific entry and exit points to participants during live trading sessions. They also informed clients about stop-loss triggers, effectively guiding their live market orders.
"The participants were being handheld in the live trading session. They are also asked to invest part of their capital in specific securities for better returns than FDs. None of these attributes would be seen in a case where pure educational activity is carried out," Sebi noted in its order, highlighting the advisory nature of the services.
Operating Without Registration
A critical finding was that Avadhut Sathe was not registered with Sebi as an Investment Advisor or a Research Analyst. Despite this lack of registration, he allegedly provided investment advisory and research analyst services to a large number of investors under the cover of his training programs.
Sebi stated that this action compromised investor trust and represented a systemic abuse for personal gain by devising methods to circumvent securities laws. The order aims to prevent further misuse and protect market integrity.
Key Directives from the Sebi Order
The interim order imposes immediate and severe restrictions on Sathe and his firm:
- They must desist from offering any unregistered investment advisory or research analyst services and cease all related or fraudulent securities market activities.
- Avadhut Sathe is restrained from buying, selling, or dealing in securities directly or indirectly until further orders.
- They must open Fixed Deposit accounts within 15 days for the entire impounded amount of ₹546.16 crore, with a lien marked in Sebi's favour. These funds cannot be released without Sebi's permission.
- Banks are directed to allow no debits from their accounts except for transferring money to these FDs.
- They are prohibited from buying mutual fund units or securities with the impounded money.
- They must instantly withdraw and remove all advertisements, websites, videos, and promotional materials related to the unregistered advisory services.
Show Cause Notice and Potential Further Action
Beyond the impounding order, Sebi has also issued a show cause notice to Sathe and his academy. The notice demands reasons why the regulator should not take even stricter actions, including:
- A direction to disgorge the full ₹601 crore (covering all courses) along with applicable interest.
- Restraining them from accessing the securities market entirely.
- Barring them from associating with any Sebi-registered intermediary.
- Directing a full refund to all course participants and investors.
This case underscores Sebi's intensified vigil against unregistered entities offering investment advice, especially those using educational platforms as a front. It serves as a stark warning to similar operators in the burgeoning space of stock market training and "finfluencers." The final outcome will depend on the responses to the show cause notice and subsequent proceedings.
