Sebi cracks down on finfluencer Asmita Patel & 5 others; confiscates illegal gains over ₹53 crore

Market regulator Securities and Exchange Board of India (Sebi) has banned finfluencer Asmita Patel and five others from the market while impounding illegal gains exceeding ₹53 crore.

Sebi issued an interim order cum show-cause notice on Thursday, February 6, prohibiting six entities, including Asmita Patel Global School of Trading Pvt Ltd (APGSOT), Asmita Jitesh Patel, Jitesh Jethalal Patel, King Traders, Gemini Enterprise and United Enterprises, from the capital market.

The market regulator asked the accused entities for an explanation on why another ₹104.63 crore should not be collected as fees for various programmes and should not be seized.

The order, issued by Sebi's full-time member, Kamlesh Varshney, came after 42 of Asmita Patel's clients filed complaints against her.

What did Sebi order say?

The order mentioned that Patel provided stock recommendations to investors through private telegram channels, zoom meets, and educational courses. According to Sebi, Patel provided such tips and courses without mandatory registration from the Sebi, hence violating norms.

Additionally, the order stated, "Students/investors/participants were encouraged to leave the job and join MPAT (a course run by her institute) to make something big."

The market regulator found that the accused violated RIA/RA rules claiming false assurances of returns, along with misleading customer reviews.

“Examples were given of the former vice president of a big company, who left the job to become a full-time trader whose trading capital had increased from ₹30 lakh to ₹3 crore. This person confirmed these facts and stated that without looking into the market now, she was making money as the noticee no. 2’s systems and the entire setup helped in achieving the same," the order stated.

However, Patel claimed that she was awarded “Times Leading Icon 2021” for “Excellence in Financial Education” and recognised in the category of “Niveshak Naari” (2024) as an eminent female trader and educator.

Sebi's investigation highlighted that Patel and her firm made false claims about trading turnover and profits.

“As per the reply received from the stockbrokers, the noticee nos. 1 and 2 have earned a net profit (after charges) of ₹12,28,365 during the period from 2019-20 up to 30 January 2024. Based on the above findings, it is observed that the profit earned by the noticees doesn’t appear to be commensurate with the claims made during the courses offered by the noticee no.1," the market regulator said.