Finfluencer mind games and the ever-elusive pot of gold

Even smart people fall for behavioural traits like greed, herd mentality and confirmation bias

- Shefali Anand

India's capital markets regulator on 4 December barred Avadhut Sathe and his eponymous trading academy from dealing in securities and ordered impounding of the allegedly illegal gains worth ₹546.16 crore earned prima facie by providing unregistered investment advisory services.

The action followed complaints from several participants of Avadhut Sathe Trading Academy (ASTA) that they had incurred substantial losses despite the academy's promises of "extraordinary returns".

In its interim order, the Securities and Exchange Board of India (Sebi) said its investigation found that several claims made in ASTA's advertisements were misleading.

Sebi also noted that the academy was providing investment advice without being registered, in violation of the securities laws, and collected around ₹600 crore in course fees from more than 337,000 participants between 2015 and 2025.

However, ASTA has denied the allegations of the market regulator.

This isn't the first time that claims of helping people earn big profits in the stock markets have ultimately not turned out to be true.

But why do many intelligent individuals become attracted and fall for such schemes that ultimately harm them financially? Certain psychological elements are at play, but being aware of them can help prevent us from falling into financial trouble.

Desire to learn the 'secret sauce'

While traditional wisdom advocates building wealth by holding equities long-term, many seek shortcuts-trading strategies, timing techniques, or little-known exotic investments. The belief that mastering this "secret sauce" can make them rich is exactly what financial salesmen exploit. "They're just selling a dream," said Tania Ahuja, the founder of Sebi-registered investment adviser Nobias Analyst India.