Chartered accountant involved in S&M racket (4)
I believe the answer is:
scam
'racket' is the definition.
(racket is a type of scam or scheme)
'chartered accountant involved in sm' is the wordplay.
'chartered accountant' becomes 'CA' (abbreviation for chartered accountant).
'involved in' means one lot of letters goes inside another.
'ca' going inside 'sm' is 'SCAM'.
(Other definitions for scam that I've seen before include "Fraud, dishonest scheme" , "Con trick" , "rook" , "fiddle" , "A modern kind of swindle" .)