SEBI Fines Basant Maheshwari Wealth Rs 4 Lakh For Fee Violations, Misleading YouTube Captions

New Delhi: Market regulator SEBI has imposed a Rs 4 lakh fine on Basant Maheshwari Wealth Advisers LLP for allegedly violating norms related to fees and using exaggerated captions in YouTube videos. The firm has been given 45 days to pay the penalty.

SEBI found that Basant Maheshwari Wealth Advisers was charging fees from 32 clients under both fixed and asset-based models at the same time. Normally, investment advisors can charge clients using only one method per year with any changes allowed only after 12 months. The firm violated Regulation 15A of SEBI's Investment Advisers Rules by using both fee models for the same client.

During SEBI’s inspection, Basant Maheshwari Wealth Advisers LLP was found to be uploading YouTube videos with “exaggerated captions” and was “in non-compliance with the advertisement code.” The regulator pointed out titles 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 Rs 150 crores Sirf Trading kar ke?”

Basant Maheshwari Wealth Advisers argued that SEBI selectively picked video titles to impose liability without considering the educational intent behind the content. However, SEBI pointed out: "The disclaimer was not clearly brought out in the description as it has been uploaded through a pdf link on the description. Additionally, videos uploaded by Mr. Basant did not provide the disclaimer in the description box of each of his YouTube videos."

SEBI also noted that Mr. Basant Maheshwari included a link to his Smallcase website in the description of his YouTube videos with the statement “Invest in our smallcase.” As a result, SEBI stated, “Thus, he was influencing investors and thereby the YouTube videos were advertisements issued by Mr. Basant Maheshwari.”

SEBI and BASL Officials Conduct Inspection

SEBI conducted an inspection on December 29, 2023, with a team of SEBI and BASL officials. The review covered the period from October 19 to December 31, 2023, followed by a detailed analysis. After assessing the findings and considering the firm’s response, SEBI imposed a Rs 4 lakh fine.

SEBI warned that if the penalty is not paid within 45 days of receiving the order, further actions may be taken. SEBI stated, "In the event of failure to pay the said amount of penalty within 45 days of the receipt of this Order, SEBI may initiate consequential actions including but not limited to recovery proceedings under section 28A of the SEBI Act for realization of the said amount of penalty along with interest thereon, inter alia, by attachment and sale of movable and immovable properties."