Cricketer Mahendra Singh Dhoni has been unwittingly entangled in an illicit market advice scheme, with finfluencers Ankit Jain and Srujan Sadanand Gaurkar exploiting the Captain Cool’s iconic stature to unlawfully sell investment advice.
Jain and Gaurkar manage a popular social-media handle called Investographer1, with about 7 lakh followers, offering insights ranging from trading to investment ideas.
The two founders of Investographer Edtech snapped a photo with Dhoni at a content-creator event and have been using this image to promote one of their services—called Mastering Technical Analysis—and their brand’s credibility through the association with Dhoni.
Dhoni, like many other celebrities, has been a victim of various brands misusing his image. In 2013, he was portrayed as Lord Vishnu on Business Today’s cover for his branding deals. The depiction turned out to be controversial, with Dhoni facing lawsuits in Karnataka and Andhra Pradesh for hurting religious sentiments. These complaints led to criminal proceedings that continued for three years, ultimately requiring intervention from the Supreme Court to grant Dhoni relief.
However, his relief was short-lived. He was soon embroiled in a new court battle involving the real estate developer Amrapali Group, for which he was a brand ambassador. When the floundering realtor failed to deliver homes in time, disgruntled homebuyers took to venting their frustration on social media, tagging Dhoni in their posts. He resigned as the brand ambassador and sued the company for unpaid dues of Rs 150 crores. In 2019, the Supreme Court stopped the arbitration proceedings involving Dhoni and the realtor, observing that the interest of the home buyers must take priority.
Regulatory grey area
Investographers Mastering Technical Analysis operates in a regulatory grey area. It offers backtested trading strategies for a fee. If these strategies are securities-specific and are being applied by the course’s participants in a live market, then they could be seen as investment advice, according to legal experts. Since they are not a Sebi-registered investment advisor, this would be a violation of Investment Advisor (IA) Regulations, according to Anand Kankani, a company secretary and an expert in securities law.
Moneycontrol has reached out to Investographer, and the article will be updated if and when they respond.
They disseminate advice through various channels, including YouTube and a paid group. Several of the posts have been taken down since Moneycontrol reached out to them for a response.
The content-creator platform Rigi, which organised the event where the Investographer founders took a photograph with Dhoni, told Moneycontrol that neither the platform nor Dhoni endorses Investographer’s services. Dhoni is an investor in Rigi.
Legal experts told Moneycontrol that Dhoni cannot be held liable for endorsing Investographer’s services because he is merely an investor of the platform that provides a service and does not offer investment advice.
In an email response to Moneycontrol’s queries, the Rigi spokesperson stated, “Any photograph clicked here does not imply MS Dhoni or Rigi endorsing anyone.”
Illegal advisory
Investographer1 has more than 6.89 lakh subscribers on YouTube, where it has curated a playlist titled Trade and Investment Ideas.
According to Anand Kankani, who consults with investment advisories and research analysts, some of these videos qualify as investment advice and violate IA Regulations because they would be earning from the advertisement revenue generated from the channel, which is also a consideration for investment advice.
Kankani said that several of these videos can also be considered research reports, especially if they are giving BUY/SELL/HOLD recommendations, and that any person publishing such content would need to be registered as a research analyst with Sebi.
But the most blatant violation by the Investographer team can be seen in its paid group—Big Bulls Club—through which it offers “Exclusive Live Market Session”, “Swing Trade Ideas (with SL and targets), “Investment Ideas & Updates” and “much more”.
The ‘club’ charges a hefty Rs 12,000 fee for a semi-annual membership and Rs 21,000 for an annual membership after discounts. Its promotional content comes with a disclaimer: “Not Sebi registered, consult your financial advisor. (The perks and features can be changed at any time as per the decision of admins)”.
This disclaimer won’t prove much of a defence, going by an interim ex-parte order issued by Sebi on June 14, 2023. It involved unregistered investment advisory activities by Kabir Financial Services and two others. In the order, the regulator stated, “Merely making statements of this nature cannot exonerate the Noticees when their actions reveal that they were and continue to be prima facie engaged in unregistered investment advisory services.”
Technology partner?
Rigi, the content creator platform that organised the event, had stated this May that it wouldn’t welcome finfluencers who aren’t Sebi registered.
Investographer, which does not have a registration, runs an app using Rigi’s solution.
In a reply to Moneycontrol, Rigi said, “Rigi works as a technology service provider helping creators build their application where they only own and operate the application.”
They added, “In this particular case (of Investographer), they are monetising their audience through a course module which enables users to learn about stock markets. Since this is pre-recorded in nature, there is no element of market advisory here too.”
The promotional content for Investographer’s Big Bull Club states that it would involve live market sessions.
On Investographer1’s not having a Sebi registration, the platform’s spokesperson said, “Rigi works within the contours of SEBI regulations. To the extent an industry operating on our platform is required to obtain any permission or registration, we verify these parameters closely.”
According to Kankani, neither the platform nor the celebrity can be held legally liable because they are merely providing a service and not actively earning from the advisory service.