The Securities and Exchange Board of India (SEBI), the market regulator, has fined Basant Maheshwari Wealth Advisers LLP Rs 4 lakh for breaching regulations related to fees and using misleading titles in YouTube videos. The fine must be paid within 45 days, failing which SEBI may impose interest and initiate proceedings to seize both movable and immovable assets, as stated by the adjudicating officer in the order.
SEBI observed that Basant Maheshwari Wealth Advisers was charging fees from 32 clients under both the fixed fee and assets under advice (AUA) models. Typically, investment advisors are allowed to charge fees from a client under only one model on an annual basis, with any change in the fee structure allowed only after 12 months from onboarding or the last change.
SEBI stated that Basant Maheshwari Wealth Advisers violated Regulation 15A of the SEBI (Investment Advisers) Regulations by charging fees from the same clients under both fee models.
Misleading YouTube Video Captions
Additionally, SEBI accused Basant Maheshwari Wealth Advisers of publishing YouTube videos with misleading captions that violated the advertisement code.
Basant Maheshwari Wealth Advisers argued that the notice selectively picked video titles to assign blame, without considering that the actual intent and message of the videos were focused on educating viewers.
However, SEBI said, “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.”
“It was further observed by SEBI that Mr. Basant Maheshwari had been providing link to his smallcase website in the description of his YouTube channels with the statement “Invest in our smallcase”. Thus, he was influencing investors and thereby the YouTube videos were advertisements issued by Mr. Basant Maheshwari,” the market watch dog added.
Inspections By SEBI And BASL Officials
SEBI stated that the inspection, conducted on December 29, 2023, involved a team of SEBI and BASL officials. The inspection covered the period from October 19, 2023, to December 31, 2023, followed by a post-inspection analysis by SEBI.
After considering the facts, circumstances, and available materials, along with the submissions made by the noticee, SEBI imposed a Rs 4 lakh fine.
“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,” SEBI said.
