Avadhut Sathe likely to challenge SEBI order before SAT, flags regulatory gaps in defining stock market education

Such demonstrations accounted for approximately 3-4 percent of total programme hours, he said. “ASTA’s position is that it has always operated solely as a training academy. None of its social media handles or channels are monetised. The social media handles were created for continuous learning,” Sardana said. ASTA said students were first taught technical analysis, decision-making frameworks and risk management rules before being shown how these concepts worked during live markets.

“ASTA is committed to educational activities only and has never provided investment advisory or brokerage services, managed portfolios, or sold software or apps,” Sardana said. Arguing that the matter highlighted gaps in the regulatory framework, Sardana said educational activities had not been clearly defined under SEBI’s guidelines. He added that the academy would seek a review through the appropriate legal forums.

In usual course matters related to SEBI and its regulated entities are appealed before Securities Appellate Tribunal (SAT). “ASTA has always maintained that its core objective is to impart financial-market education and develop independent, informed traders so that concerns of SEBI that 90 percent of retail investors lose money in trading, can be addressed,” he said. Calling the order as a setback to financial-market education, Sardana said ASTA would appeal against it before the appropriate forum.

The academy’s response comes amid regulatory scrutiny of activities that SEBI considers to fall within its regulatory framework. ASTA’s position is that its activities were limited to education and training rather than investment advice or brokerage services. SEBI has ordered Avadhut Sathe Trading Academy Private Limited and its founder, Avadhut Sathe, to refund Rs 546.17 crore collected through unregistered investment advisory and research analyst activities within five months of receiving the order.

They must also deposit Rs 67.87 crore in interest with SEBI’s Investor Protection and Education Fund. The regulator imposed total penalties of Rs 11.5 crore on the academy, Avadhut Sathe and director Gouri Sathe. The academy and its founder have been barred from securities markets for two years or until refund compliance, whichever is later. Gouri Sathe faces a six-month ban. In January this year, SAT had granted partial relief to Avadhut Sathe and his trading academy, against SEBI's interim order by reducing SEBI’s Rs 546.17 crore refund deposit requirement to Rs 100 crore in a fixed deposit.

It also unfroze their bank accounts subject to the deposit condition, while requiring asset disclosure affidavits and restricting the sale of fixed assets. However, the tribunal rejected their plea to withdraw Rs 2.25 crore a month for operational expenses. Later apex court allowed the same.