Mohammad Nasiruddin Ansari, aka ‘Baap of Chart’, the Hyderabad-based finfluencer has come under major trouble with the Securities and Exchange Board of India (SEBI) where they have banned him and two others for selling people unregistered and fraudulent illegal advisory services.
SEBI has banned him from the securities market until further notice and also asked him to deposit over Rs. 17 crores as a refund fee in two weeks’ time. This amount is the estimated sum that the finfluencer earned from his advisory services that he sold to ‘students’/’investors’.
What Did SEBI Say?
In an interim order passed on 25th October 2023, SEBI stated that “Noticee Nos. 1 (Mohammad Nasiruddin Ansari), 2 (Rahul Rao Padamati) and 5 (Golden Syndicate Ventures Pvt. Ltd. ) are restrained from buying, selling or dealing in securities either directly or indirectly, in any manner whatsoever until further orders.
If Noticee Nos. 1, 2 and 5 have any open position in any exchange-traded derivative contracts, as on the date of this Order, they can close out / square off such open positions within 3 months from the date of this Order or at the expiry of such contracts, whichever is earlier.
The said Noticee Nos. 1, 2, and 5 are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this Order.”
The order has asked the accused to deposit an amount of Rs 17,20,76,616.09 (Rupees Seventeen Crore Twenty Lakh Seventy Six Thousand Six Hundred Sixteen and Nine Paisa) into an escrow account in 15 days and also barred them from participating in the securities market or use any of the funds that came from investors.
The amount that’s being asked as a refund is reportedly how much the noticees earned in a period of 18 months from investment advisory activities that are considered fraudulent and unregistered.
It is estimated by SEBI that Ansari earned around Rs 13.78 crore from courses, mobile apps, and workshops listed on Bunch Microtechnologies Pvt Ltd (Bunch). Along with that two UPI IDs linked with his and BoC’s accounts in Kotak Mahindra Bank were stated to have received around Rs. 3.42 crore.
Read More: How To Spot A Fake Finance Influencer?
What Did The Finfluencer Do?
Mohammad Nasiruddin Ansari, operated under the alias of Baapofchart and had a pretty popular YouTube channel with more than 4.43 lakh subscribers and a viewcount of over 7 crore.
He also had a Telegram group/ channel called Baap Of Chart Option Hedging with around 53,000 subscribers while his WhatsApp channel had over 13,000 followers. His Instagram and X accounts ‘@baapofchart’ have around 59,000 and 78,000 followers respectively.
As per the SEBI examination, however, it was found that many of the videos posted on the channel would promise quick and constant returns through trading but the advice was of an unregistered and fraudulent nature.
The investigation stated that Ansari was ‘assuring or promising with unnaturally high degree of certainty, returns/profit/guaranteed recovery from losses by adhering to the recommendations made in the aforesaid courses.’
SEBI has alleged that Ansari would share trading recommendations in ‘garb of educational courses’ that he charged his followers for. The report also claims that he was “luring clients/investors through misleading or false information to purchase his courses/workshops”.
According to the order “In view of receipt of fees for ‘educational courses’ directly in their bank accounts, prima facie it is concluded that the aforesaid Noticee Nos. 1, 2 and 5. are jointly and severally liable for alleged unlawful gains…
Considering that the Noticee Nos. 1, 2 and 5 have wantonly engaged in perpetrating fraudulent activity, I cannot ignore the risk that the said Noticees may divert the alleged unlawful gains before directions for disgorgement / refund, etc., if any, are passed.
Further, I note that in his videos/ social media posts on ‘courses’ of BoC, Nasir repeatedly emphasizes on providing access to live trading during his courses.
Therefore, non-interference at this stage would result in irreparable injury to interests of the securities market and the investors.”
It further said, “Considering the factual matrix of the case and the prima facie conclusion of fraudulent and unregistered investment advisory activities, I am convinced that the balance of convenience lies in passing interim directions against the Noticee Nos. 1, 2 and 5 inter alia for preventing the continuation of any further fraudulent or unregistered activities in the interest of investors, and for impounding and retaining such quantified alleged illegal gains.”
The order further said that “During the examination, it was observed from the website of BoC (https://baapofchart.com/) that Nasir is presented as a “stock market wiz” who has developed BoC which is a proprietary algorithm “clocking a profit accuracy of 95%” and designed BoC to give “profits day after day eliminating any chance of overall loss”.”
The order also pointed out that Ansari while assuring investors and customers of strategies that would create “200-300 percent profit/assured or near-assured returns” in fact had made a net loss of Rs 2,89,60,828.02 through trading and proceeded to “concealed such facts from the investors in his videos/ workshops/ groups.
Therefore, the claim of certainty or near-certainty on returns on his trading calls/ ‘educational videos’ is not supported by his individual record of trading in the securities market.”
While Ansari had seven trading accounts as per SEBI, the major trading was done mostly from two with his Zerodha account losing Rs 2.64 crore from trading while the Angel One trading account lost Rs. 25 lakh.
In fact, Moneycontrol had even reported on his alarming activities in March, where they reported on his alleged algorithm where he “expected” an “annual return of more 11,800 per cent on weekly compounding”.
He would also run ads on Twitter where he would promise returns of more than three times from a regular job if a person made a minimum investment of Rs. 5 lakh.
In a tweet made in March, Ansari posted an invite for a live trading session in his office for which people needed a minimum capital of Rs. 50 lakh and could expect profits of Rs. 5-6 lakh on a weekly basis.
As per a market insider the finfluencer “built his following by sending small sums or goodies to people in dire need. Then he leverages their goodwill and posts to sell his workshops and trading calls.”
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