Anirudh Sethi, the founder of a website called ‘anirudhsethireport.com’ is not a stranger to skirmishes with SEBI over his stock advisory service. In 2006, when the stock markets were booming, Sethi started an advertisement blitzkrieg in all major newspapers offering to provide “15 to 25 SMS each day both for Short & Long, Cash Stock & Futures Small-caps & Large-caps, Delivery & Intra-day” for an annual fee of Rs. 50,000. The advertisements exhorted the public to “Gear-up, Get – Set for a Superior Life-style”.
The advertisements raised SEBI’s ire because Sethi is not a ‘registered stock advisor’. SEBI also alleged that Sethi and his website had “disseminated unauthenticated and misleading company specific information through advertisement on print and electronic media which could have misled lay investors and thus indulged in activities prejudicial to the price discovery mechanism of the stock exchange”.
Fortunately for Sethi, the matter ended amicably because he furnished an undertaking pledging to keep his stock market advisory activities within the four corners of the law.
However, SEBI’s sleuths have been stealthily monitoring Sethi’s twitter account called ‘anirudhsethi71” and they stumbled on stock recommendations therein:
“YES BANK-Crashed to kiss 682.90! Just see at 697 Indicated to sell …… Power of chart!”
“Buy 90 put of BHEL…..at 25 paisa or 30 paisa…….Risk 25 paisa and mint millions????? Let’s see”
“All T looking HOT! TVS Motors, TV 18, TORRENT PHARMA, TATA MOTOR DVR…..Yes will buy in panic”
Sethi’s website also offered subscription based services to general investors under the name “Fatal Attraction”. The site does not have details of the subscription charges. Interested parties are required to send an email to Sethi. The site, however, does solemnly promise “Our technical forecasts will give profit…This has been proved umpteen times in the past 2 decades. That’s why we get innumerable request mails showing interest to join. As is the precedence, this subscription too is for entire 2015-2016 Financial Year, i.e. for 12 months till March 2016”
Understandably, such activities are like showing a red flag to a Bull. SEBI has passed an interim order dated 26th May 2016 in which it has described Sethi as a ‘repeat offender’ and directed him to “cease and desist” from carrying on his alleged illegal activities.
SEBI also got hold of Sethi’s bank account with ICICI Bank. Surprising, the account shows a paltry deposit of Rs. 36,000 from subscribers.
Prima facie, the sum is abysmally low. We saw how Mansoor Rafiq Khanda and Firoz Rafiq Khanda, the two novice punters, had raked up of a fortune of Rs. 3.83 crore by their amateurship attempts to entice subscribers. Sethi runs a far more sophisticated operation.
Sethi has adopted a defiant stand against SEBI’s directive. He claims that he has done no wrong because he is offering “general market views” and “organizing seminars relating to technical analysis / trading psychology”. It is also claimed that money has been collected from subscribers for “education purposes”.
Sethi is also playing the victim card by stating “We Know 1000 of Websites/ Blogs are running taking Money, SMS Service and many more thing happening (But what they are doing is not crime …. but we had done is CRIME)”. He also complains that “Many people are not able to digest your success and will do anything wrong”. He has also asked why astrologers giving stock market advice are not banned.
We will have to await SEBI’s final order to see which way the matter turns.
For the moment, the interesting aspect is the vigilance that SEBI is placing on social media in its bid to weed out alleged culprits.
So, novice investors like you and me have to be careful about what we babble about on twitter and facebook so as not to be in SEBI’s wrong books!