The Securities Appellate Tribunal (SAT) has provided temporary relief to financial influencer Avadhut Sathe and his Avadhut Sathe Trading Academy (ASTA), permitting them to restart their activities. This decision comes after the Securities and Exchange Board of India (Sebi) had barred them from the securities market earlier in December.
SAT Questions Sebi's "Drastic" Action
On Friday, a SAT bench led by Justice P.S. Dinesh Kumar heard an appeal filed by ASTA, Avadhut Sathe, and his wife Gouri Sathe. The appellants argued that Sebi's ex-parte interim order, passed without granting them a hearing, was an extreme measure lacking urgency. They stated that such orders are reserved for situations where immediate harm to investors is imminent, a condition they claimed was absent here.
Senior counsel Janak Dwarkadas, representing the appellants, contended that the regulator had effectively "passed a sentence without a trial." The appeal highlighted that the freezing of bank and demat accounts, the prohibition on market access, and the demand for a large deposit violated principles of natural justice and proportionality.
The Core of the Dispute: Education vs. Advisory
Sebi's 125-page order on 4 December had barred Sathe and his institute from dealing in securities and ordered the impounding of ₹546.16 crore. The regulator alleged they were running unregistered investment advisory and research analyst services disguised as stock-market education, collecting an "astronomical" ₹601.37 crore from over 337,000 investors since 2015.
ASTA countered that this sum represents cumulative tuition fees collected over many years for various courses, not payments for investment advice. They asserted that Sebi's case relied on just 12 complaints from their vast student base, calling the action "vindictive, high-handed and disproportionate."
The academy's appeal also pointed to a "regulatory vacuum" created by conflicting Sebi circulars on using market data for education. Furthermore, they argued that Sebi failed to provide evidence of personalized, client-specific investment advice, stating their interactions were batch-based educational sessions, which are excluded from the definition of "investment advice."
Tribunal's Remarks and Next Steps
The SAT bench appeared sympathetic to some of these arguments. According to a note from ASTA, the tribunal remarked, "We are also surprised that prima facie Sebi wants a deposit of ₹546 crore after shutting down everything."
The tribunal's ad-interim order allows operations to resume temporarily, preventing irreparable harm until a full hearing can be conducted. The matter has been scheduled for further hearing on 9 January 2026.
