The Securities Appellate Tribunal (SAT) on Thursday have partial relief to Avadhut Sathe and his trading academy against market regulator, the Securities and Exchange Board of India’s (Sebi) order of impounding Rs 546 crore and imposing trading restrictions.
In its order, it directed Sathe and related parties to deposit ₹100 crore with respect to the case of unlawful gains from unregistered market activities during 2020-2025. The appellants were also asked to file a response within four weeks, as per the tribunal’s order.
“It is not in dispute that appellants have collected ₹601 Crores. Whether it is an unlawful gain, is yet to be decided,” the tribunal said. A sum of ₹166 crore of the appellants is lying with the government treasury and they have fixed assets worth ₹100 crore.
Allegations of Misleading
Last year, the academy and two of its directors – Avadhut Dinkar Sathe and Gouri Avadhut Sathe – were under scrutiny after the market regulator allegedly found evidence of unregistered activities with respect to eight courses under the academy, amounting to ₹546 crore. Sebi had alleged that the parties have been “recklessly misleading, soliciting and inducing the investors” to deal in the securities market based on their advice.
Sebi had observed that the academy was publishing and promoting selective profitable trades, and also claimed that its students earned from trading. They also operated under the guise as ‘investment advice’ or ‘research analyst’, without obtaining registrations from the regulator. Sebi’s investment advisor regulations are in force since 2013 and that for research analysts are functional since 2014, under which individuals or entities have to get registered to carry on their activities.
Despite the regulator’s administrative warning to avoid recurrence of such incidents, the appellants continued with their unregistered activities, following which Sebi conducted search and seizure operations, and then issued an ex-parte interim order and show cause notice to them. A total of ₹546 crore was shown in the seized accounts of the parties, accounting for fees paid for unregistered activities, the order said.
It was also found that the academy had created multiple private WhatsApp groups, which provided stock recommendations on a regular basis, including stop-loss, target prices, and likely movement of specific stocks. One of the WhatsApp groups is a paid channel and participants pay ₹30,000 to enroll for the same.
Counter argument
Sathe’s advocate Janak Dwarkada said that the regulator’s directions are “in flagrant violation of appellants’ Constitutional rights because Sebi has computed the alleged unlawful gains attributable to unregistered activities from 2020 to 2025.” Based on Sebi Chairman’s comments in an earlier interview that the regulator will soon change rules to prohibit use of live market data for investor education, Dwarkada said that appellants have not committed any illegality.
He also said that the directions in Sebi’s impugned order are impossible to comply with. On one hand, Sebi has frozen all bank accounts and restrained the appellants from accessing the securities market while on the other hand, the regulator has directed them to deposit ₹546 crore.
“As on the date of freezing, appellants had about ₹4 crores in their bank accounts. The direction to place a deposit of ₹546 Crores is based on the premise that appellants may siphon off the money,” Dwarkada said. The order does not contain any finding as to where the said amount is traceable, he said, adding that the “apprehension of siphoning is misconceived.”
*************************************************************
Timeline
March 2024 – Sebi issued administrative warning following complaints about unregistered advisory services
March 2025 – Sathe again gives recommendations on various stocks using live data
July 2025 – Academy uploaded misleading testimonial of an investor Rehan Shaikh
July 2025 – Academy uploaded misleading testimonial of another investor Pavitra Anjana Nayaka
August 2025 – Sebi conducts search and seizure operation at academy
December 2025 – Sebi issues impugned order to appellants
Mid December 2025 – SAT refuses interim relief to appellants, but allows academy to use funds for expenses for a month
January 2026 – SAT directs appellants to deposit ₹100 crore