SEBI orders Avadhut Sathe academy to refund Rs 546.17 crore to participants

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has directed Avadhut Sathe Trading Academy Private Limited and its director Avadhut Dinkar Sathe to jointly and severally refund Rs 546.17 crore collected from course participants, after finding that they provided investment advisory and research analyst services without registration under the guise of stock market education. The final order, reference QJA/MN/MIRSD/MIRSD-SEC-1/32790/2026-27, was passed on 23 October 2026 by N. Murugan, Quasi Judicial Authority, under Sections 11(1), 11(4), 11(4A), 11B and 11D of the SEBI Act, 1992.

Beyond the refund, the order directs the academy and Avadhut Dinkar Sathe to deposit Rs 67.87 crore as interest in SEBI's Investor Protection and Education Fund (IPEF). Both are debarred from the securities market for two years or until they complete the refund, whichever is later. A third noticee, Gouri Avadhut Sathe, a director of the company since its incorporation, is debarred for six months.

SEBI also imposed monetary penalties totalling Rs 11.5 crore: Rs 6 crore on the academy, Rs 4 crore on Avadhut Dinkar Sathe and Rs 1.5 crore on Gouri Avadhut Sathe, payable within 45 days of receipt of the order.

Throughout the proceedings, according to the order, the noticees contended that their programmes were financial education, that participants were students rather than investors, and that the fees were course fees, not advisory income. SEBI rejected those contentions. No public response to the final order from the noticees was on record at the time of publication. The order is appealable to the Securities Appellate Tribunal (SAT).

How the Scheme Worked

According to the order, the matter began with an examination of the academy's activities during FY 2023-24. SEBI found that the academy was publishing selected profitable trades of course participants and claiming that participants consistently earned through trading, while its analysis showed that the trainers and participants featured were in net losses. SEBI issued an Administrative Warning on 1 March 2024 cautioning against misrepresentation and selective disclosure.

The order records that misleading videos continued after that warning, and that SEBI received complaints from participants who said they had incurred substantial losses despite the returns promised. SEBI appointed an Investigating Authority on 24 July 2025 to examine the period from 1 July 2017 to 9 October 2025. With authorisation from the Special Court, search and seizure operations were carried out at the noticees' premises on 20-21 August 2025.

On the substance, SEBI found that course sessions and WhatsApp groups carried securities-specific recommendations, entry and exit targets, stop-loss levels, forecasts of the direction of specific stocks, and live trading positions shared during market hours. The order says these activities "fall within definitions" of investment adviser and research analyst, yet neither the company nor its directors held SEBI registration. The record before the authority included around 200 documentary exhibits and 115 video recordings.

On promotion, SEBI compared advertised testimonials with exchange-derived profit-and-loss data. In one example the order cites, a testimonial published on 27 February 2025 claimed trading profit of Rs 43.2 lakh and carried the assurance "Validated by verified P&L", while the exchange records showed a loss of Rs 5,58,444.43 for the corresponding period.

SEBI found the academy had collected Rs 6,01,37,96,917 from participants between 25 July 2015 and 9 October 2025. It based disgorgement on Rs 546.17 crore attributable to eight programmes for which it held direct evidence, the largest being the "GEO" course at Rs 423.49 crore between 2020 and 2025.

The procedural path ran from an Interim Order cum Show Cause Notice dated 4 December 2025, to a SAT order of 22 January 2026 that partly allowed the noticees' appeal on the impounding of proceeds and directed adjudication, to hearings on 17 March, 6 April, 24 April and 13 October 2026, and finally to the 23 October order.

The Law Invoked

The order holds that the academy and Avadhut Dinkar Sathe violated Section 12(1) of the SEBI Act read with Regulation 3(1) of the SEBI (Investment Advisers) Regulations, 2013 and Regulation 3(1) of the SEBI (Research Analysts) Regulations, 2014. Together, these provisions require anyone who gives investment advice or research recommendations for a fee to be registered with SEBI first.

It also holds that they violated Section 12A(a), (b) and (c) of the SEBI Act read with Regulations 3(a) to (d), 4(1) and 4(2)(k), (o) and (s) of the PFUTP Regulations, 2003. Section 12A and Regulations 3 and 4(1) prohibit manipulative and deceptive practices in securities. Regulation 4(2)(k) covers disseminating misleading information that influences investors, 4(2)(o) covers fraudulently inducing people to deal in securities to enhance one's income, and 4(2)(s) covers mis-selling, including concealing material facts and failing to assess suitability.

Gouri Avadhut Sathe was held liable for the company's contraventions under Section 27 of the SEBI Act, which makes those in charge of a company's business answerable for its violations. Penalties were imposed under Section 15EB, covering defaults by investment advisers and research analysts, and Section 15HA, covering fraudulent and unfair trade practices, after weighing the factors in Section 15J.

What Happens Next

The refund must be completed within five months of receipt of the order, through a dedicated bank account and only by electronic or other traceable banking channels. Within 30 days, the academy and Avadhut Dinkar Sathe must publish a public notice in two national newspapers (one English, one Hindi) and one vernacular daily setting out how participants can claim refunds, including contact details.

Until the refund and the completion report are filed, they cannot sell assets except to fund refunds, and their bank accounts stay frozen for debits other than transfers into the dedicated refund account. A completion report certified by a peer-reviewed chartered accountant is due within 30 days of finishing refunds. Any undistributed balance goes to a SEBI escrow account for one year for distribution to eligible participants, and then to the IPEF.

The noticees can challenge the order before the Securities Appellate Tribunal, and from there the matter can go to the Supreme Court. The order itself states that it is "subject to judicial orders, as applicable". As a regulator's finding in quasi-judicial proceedings, it may be stayed, modified or set aside on appeal.

What It Means

The order is a detailed statement of where SEBI draws the line between financial education and regulated advice. It says that calling a recipient a student "does not reduce the risk" of acting on a recommendation, and that educational content does not displace a finding that paid programmes supplied securities-specific calls. SEBI also treated the entire fee for the covered courses as consideration for unregistered services, not merely a share of it.

For anyone paying for a trading course, mentorship or signal group, the practical test is simple: if it tells you which stock to buy or sell, at what level, with what stop-loss, the provider should hold a SEBI investment adviser or research analyst registration. You can verify this on SEBI's website under the intermediaries list, and registered entities must display their registration number. Testimonials showing large profits are not verified performance unless backed by audited records, and this order shows how far such claims can diverge from exchange data.

Participants of the covered programmes should watch for the public notice on refund modalities, keep fee receipts and payment records, and route claims only through the channels the notice specifies.

FAQ

What exactly did SEBI order?

SEBI directed Avadhut Sathe Trading Academy Private Limited and Avadhut Dinkar Sathe to refund Rs 546.17 crore to participants within five months, deposit Rs 67.87 crore as interest in the IPEF, and stay out of the securities market for two years or until the refund is complete. Gouri Avadhut Sathe was debarred for six months. Penalties total Rs 11.5 crore.

Does SEBI's order mean the people named are guilty?

No. This is a civil, quasi-judicial order by a regulator, not a criminal conviction. SEBI found violations of the SEBI Act and its regulations after hearing the noticees, who argued their programmes were educational. The findings can be challenged before the Securities Appellate Tribunal, and due process continues.

Can the order be appealed?

Yes. SEBI orders can be appealed before the Securities Appellate Tribunal, and a further appeal on questions of law lies to the Supreme Court. The noticees earlier challenged the December 2025 interim order at the SAT, which partly allowed that appeal on the impounding of proceeds on 22 January 2026.

How can I check if a trading educator or adviser is registered?

Search SEBI's online list of registered intermediaries for investment advisers and research analysts by name or registration number. A registered adviser must display its SEBI registration number. If someone gives specific buy or sell calls for a fee and cannot show a registration, treat that as a warning sign.

What should participants in these courses do?

Watch for the public notice the academy must publish within 30 days of receiving the order, which will set out how to claim refunds. Keep records of fees paid, and claim only through the official channel described. Refunds must be paid electronically with an audit trail.

Where can I read the official order?

The full 171-page order is published on SEBI's website under Enforcement, Orders, dated 23 October 2026, titled "Order in the matter of Avadhut Sathe Trading Academy Private Limited".

This report is based on the official SEBI final order dated 23 October 2026 in the matter of Avadhut Sathe Trading Academy Private Limited. It was surfaced via coverage in The Economic Times.