SEBI Fines Basant Maheshwari Wealth For Fee Norm Violation, Exaggerated YouTube Captions

The Securities and Exchange Board of India has imposed a fine of Rs 4 lakh on Basant Maheshwari Wealth Advisers LLP for allegedly violating norms related to fees, and posting videos with exaggerated captions on YouTube.

The penalty amount is to be submitted within 45 days, failing which the market regulator may impose interest, and could move towards attachment of movable and immovable properties, the adjudicating officer stated in the order.

The action is based on the inspection conducted between the period of October 2023 and December 2023 by SEBI and BSE Administration and Supervision Ltd.

During the inspection, it was found that BMWAL was levying fees on 32 clients under both fixed and assets under advice modes. This is a practice that is barred by the market watchdog under Regulation 15A of SEBI's Investment Advisers (IA) Regulations. As per the norm, investment advisers are permitted to charge their clients only under either of the two modes.

SEBI also found during the inspection that BMWAL was uploading YouTube videos with "exaggerated captions" and was "in non-compliance with the advertisement code".

The regulator's order highlighted captions such as: "100x Portfolio - 3 Saal Mei? Kaise Kiya?", "10 Saal Mei 10 Guna Aur 20 Saal Mei 100 Guna!! Kaise Kare??", "1 Crore Ko Double Kaise Kare?? Explained in 2 Minutes", and "Kaise Banaya ₹150 crores Sirf Trading kar ke?"

While the company claimed that its videos were aimed at "knowledge enrichment for the general public", SEBI dismissed the argument. The regulator observed that the disclaimer was "not clearly brought out in the description of videos".

"Additionally, the videos uploaded by Mr. Basant did not provide the disclaimer in the description box of each of his Youtube videos," the order added. It was further observed by SEBI that the videos had been providing link to his "smallcase website in the description of his youtube channels with the statement 'Invest in our smallcase'."

By doing so, the accused was influencing investors and using the YouTube videos for advertisement, the order further said.

As per SEBI's master circular for investment advisors issued in June 15, 2023, the advertisements should not contain statements which are false, misleading, biased or deceptive.

In this context, the adjudicating officer noted that the YouTube videos of BMWAL were advertisements that had "exaggerated captions".