SEBI Imposes ₹4 Lakh Fine on Basant Maheshwari Wealth Advisers for Regulatory Violations

The Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹4 lakh on Basant Maheshwari Wealth Advisers for violating fee regulations and using misleading captions in its YouTube videos.

The market regulator has directed the company to pay the fine within 45 days, failing which interest may be charged, and proceedings to seize movable and immovable assets could be initiated, as per the adjudicating officer’s order.

Regulatory Violations Uncovered During Inspection

SEBI, along with the BSE Administration and Supervision, conducted an inspection of BMWAL between October and December 2023. The investigation revealed that the company was charging fees from 32 clients using both the fixed fee and assets under advice (AUA) methods.

According to Regulation 15A of SEBI’s Investment Advisers (IA) Regulations, investment advisers are permitted to charge their clients under only one of the two methods, making BMWAL’s practice a clear violation of the rules.

Misleading YouTube Captions Identified

Apart from the fee-related violations, SEBI also found that Basant Maheshwari Wealth Advisers Ltd (BMWAL) was using exaggerated and misleading captions in its YouTube videos, violating the regulator’s advertisement code.

The flagged captions included claims 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?” SEBI noted that these captions created unrealistic expectations among viewers, potentially misleading investors.

Basant Maheshwari Wealth’s Response and SEBI’s Dismissal

In its defense, Basant Maheshwari argued that the videos were intended for “knowledge enrichment for the general public.” However, SEBI rejected this claim, stating that the company failed to clearly present a disclaimer in the video descriptions, which is a necessary requirement to prevent misleading content.

Regulatory Crackdown on Investment Advisers

The action against BMWAL is part of SEBI’s broader effort to ensure compliance among investment advisers and protect investors from misleading financial content.

The market regulator continues to monitor the industry closely, reinforcing the importance of transparency and ethical practices in financial advisory services.

Conclusion

SEBI has fined Basant Maheshwari Wealth Advisers ₹4 lakh for violating fee regulations and using misleading YouTube captions. The company charged clients using both fixed and AUA methods, breaching SEBI norms.

SEBI also flagged exaggerated video captions creating unrealistic expectations. BMWAL’s defence was rejected, reinforcing SEBI’s commitment to transparency and ethical financial advisory practices.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.