The Securities and Exchange Board of India (SEBI) has imposed a ₹4 lakh penalty on Basant Maheshwari Wealth Advisers LLP for violating investment advisory regulations. The action was taken after SEBI found irregularities in the firm’s fee structure and misleading advertisements related to stock market returns.
Regulatory Violations Identified
According to SEBI’s order, the firm was found guilty of the following:
Fee Structure Violations – SEBI mandates that investment advisers charge clients under either a flat-fee model or a percentage-based model (Assets Under Advice). However, Basant Maheshwari’s firm was found to be charging both fees simultaneously, which is against regulations.
Misleading Advertisements on YouTube – The firm’s promotional content on YouTube contained exaggerated claims about potential stock market returns. SEBI noted that certain videos suggested unrealistically high profits in a short period, which could mislead retail investors.
Lack of Proper Disclaimers – SEBI requires investment-related content to include clear disclaimers about associated risks. The regulatory body found that some of Maheshwari’s videos lacked proper risk disclosures, which could lead investors to assume the advice was risk-free.
SEBI’s Action and Statement
In response to these findings, SEBI imposed a ₹4 lakh penalty and instructed the firm to ensure compliance with advisory guidelines. SEBI emphasized that such actions are part of its broader efforts to protect retail investors from misleading financial advice and regulate the growing influence of financial content creators on social media.
Impact on Financial Advisory and Retail Investors
The action against Basant Maheshwari’s firm highlights SEBI’s ongoing scrutiny of investment advisers and financial influencers. In recent years, the regulator has increased monitoring of social media platforms, Telegram channels, and advisory firms to ensure compliance with fair business practices.
Maheshwari, known for his investment insights and financial content on YouTube, has not yet released a public statement regarding SEBI’s order.
For further updates on this developing story, stay tuned.
