Sebi goes after Asmita Patel—‘she-wolf’ of the stock market

The Thursday order was issued against Asmita Patel Global School of Trading as noticee No. 1, its director Asmita Patel as noticee No. 2, and other associates and connected parties. The amount was collected over a period of roughly three years, from 2021 to 2024. 

The amount is part of the total amount of ₹104 crore earned by the entities as fees for various “educational courses” over a period of five years, from 2029-2024. The market regulator has sought clarification on the rest of the amount as well. 

Patel’s 42 clients had complained to Sebi, citing various violations of the RIA/RA regulations. Sebi’s full-time member, Kamlesh Varshney, passed the order. 

Launching educational courses and inviting participants to join WhatsApp or Telegram groups where stock tips are shared is a common influencer modus operandi. 

Patel didn’t respond to Mint‘s emailed queries until the time of publishing this story.

Sebi probe

Sebi found evidence of such tips violating its RIA/RA rules and false assurances of returns. It also noted exaggerated customer testimonials. 

“Examples were given of the former vice president of a big company, who left the job to become a full-time trader whose trading capital had increased from ₹30 lakh to ₹3 crore. This person confirmed these facts and stated that without looking into the market now, she was making money as the noticee no. 2’s systems and the entire setup helped in achieving the same,” the order said. 

The order cited another example of a chartered accountant whose initial capital of ₹30 lakh has grown to ₹12 crore. 

In her reply, Patel said she only delivers educational courses. She added that she had been awarded “Times Leading Icon 2021″ for excellence in financial education and recognized as an eminent female trader and educator in the category of “Niveshak Naari” (2024). 

Interestingly, she was also an authorized person or AP of a stockbroker not named in the Sebi order. 

She allegedly also collected some course fees in the bank accounts of connected entities to avoid goods and services tax. In her response, she submitted this was an employee siphoning off money rather than GST evasion. 

However, Sebi noted that nowhere in its reply did the noticee no.1 provide any information with respect to filing a criminal complaint or any other legal proceeding against the said employee for alleged siphoning of ₹1.2 crore and due to the reason that the act of the said employee has led to the avoidance of payment of GST by the course participants. 

Sebi added that the noticee no.1 had not even shown what action it had initiated against the three proprietary firms who received the course fee from participants on its behalf illegally. 

Sebi also observed false claims about trading turnover and profits. In contrast to the ₹104 crore of educational course fees, Asmita Patel Global School Of Trading only appeared to have made ₹12 lakh in trading profits. 

“As per the reply received from the stockbrokers, the noticee nos. 1 and 2 have earned a net profit (after charges) of ₹12,28,365 during the period from 2019-20 up to 30 January 2024. Based on the above findings, it is observed that the profit earned by the noticees doesn’t appear to be commensurate with the claims made during the courses offered by the noticee no.1,” the order said. 

“Information sought from the stockbrokers of the noticee nos. 1 and 2 stated that the turnover/volume generated by trading accounts held in the name of the noticee nos.1 and 2 for the period from 26 August 2019 to 31 January 2024 was ₹15,27,92,283.  The noticee no.2 misrepresented the course participants through baseless claims such as managing a huge portfolio of ₹140 crore on her proprietary system,” the Sebi order added. 

In its order, Sebi referred to its October 2024 circular separating influencers from regulated entities. The circular allows education but prohibits the use of live market data for such courses.