NDTV Profit Impact: SEBI Cracks Down On Dabba Trading Operator 'Close Friend Traders'

SEBI has taken enforcement action after an advertisement promoting illegal dabba trading was published in the Hindi daily Navbharat on July 13, 2025. The move came after NDTV Profit reported that an unregistered entity, 'Trade Dost' (also known as Close Friend Traders), was operating an unlawful dabba trading scheme.

The market regulator noted the issue seriously and initiated action in coordination with the National Stock Exchange.

Dabba trading refers to unregulated, off-market trades that occur outside formal stock exchange platforms. It violates provisions of the Securities Contracts (Regulation) Act (SCRA), the SEBI Act, and the Bhartiya Nyay Sanhita. Such trades escape regulatory oversight and are often linked to tax evasion, market manipulation, and investor fraud.

SEBI has issued a formal notice to Navbharat for publishing the ad that encouraged participation in illegal trading. Additionally, a cyber police complaint has been filed against the firm behind the ad and others involved in the promotional campaign.

The matter has also been reported to the Advertising Standards Council of India (ASCI) for a possible breach of advertising guidelines. SEBI has asked ASCI to assess the violations and recommend corrective action to prevent recurrence.

Reiterating its stance, SEBI warned that dabba trading is illegal and undermines the integrity of the securities market. The regulator has urged investors to stay alert and avoid dealings with any unregistered firms offering such services. It also called upon media houses to conduct due diligence before accepting financial advertisements, especially those relating to trading and investment products.

A Delhi-based unregistered stock advisory firm operating from Shahdara had its full front-page advertisement in a Hindi daily on July 13, luring investors with promises of sky-high margins, zero brokerage, instant deposits and withdrawals, and no-document trading accounts—all without SEBI registration.

The firm, operating under the brand name Trade Dost, claimed to offer intraday margins up to 500 times and carry-forward margins of 60 times. These features—clearly outside the regulatory framework—caught NDTV Profit’s attention.

Hence, the team decided to give the entities involved a call in order to get a bigger picture.

On the call, the firm's representative, identifying himself as "Raghav", openly admitted that they were not registered with SEBI. When questioned about the legality of offering financial advice and services without regulatory approval, he showed little concern.

When asked about their location, he confirmed the operation was based in Shahdara, Delhi, and that they were using UAE-based phone numbers. He abruptly ended the conversation when pressed further, saying, “You do your business, I’ll do mine.”

The story was published the following morning. Soon after, India's leading bourse, the National Stock Exchange (NSE) issued an investor caution circular, warning the public not to engage with unregistered advisory firms making such offers. The exchange also mentioned that Trading Dost is not a platform that investors should associate with.

Following this, NDTV Profit reached out again to the same contact number. The second conversation revealed a dramatic shift in tone— the unregistered firm's representative now contradicted his earlier statements and attempted to downplay the firm’s offerings.

One of the earlier numbers had been deactivated for incoming calls. But on the second line, Raghav was once again reachable, though this time his narrative had changed completely.

While this may seem like an isolated case of overzealous, unregulated financial activity, it is far from unique. Across India, thousands of such dabba trading entities thrive, running operations through Telegram groups, YouTube channels, WhatsApp broadcasts, and unsolicited SMS campaigns.