Capital markets regulator Sebi on Monday barred Fincap Research Investment Advisor and two individuals from the securities markets for two years for violating regulatory norms.
The regulator also slapped a penalty of Rs 14 lakh on Sonika Namdharani, proprietor of Sebi-registered Fincap Research Investment Advisor and Rs 7 lakh on Mahavir Prasad Mundra.
Further, the markets watchdog restrained them from associating themselves as a director or key managerial personnel with any listed company or any public company which intends to raise money from the public, or any intermediary registered with Sebi for a period of two years.
The order came after the Securities and Exchange Board of India (Sebi) conducted an inspection of Fincap Research Investment Advisor from April 2018 to November 2019 (inspection period).
In its 62-page order, Sebi found that Fincap was knowingly acting in a deceitful manner by allowing Mahavir (Sonika's husband) to run her proprietorship, submitting fake experience certificates in order to obtain registration from the regulator as investment adviser.
It also observed that Sonika Namdharani was running a scheme and defrauding clients, with an intention to maximise her income through investment advisory / service fees by employing fraudulent devices, without keeping in mind the requirements of the clients and keeping her interest ahead of their client's interest, thereby flouting the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules.
Sebi noted that Mahavir Mundra was practically running and controlling the operations of Fincap Research belonging to Sonika Namdharani.
Under the rules, no person shall act as or hold himself out as an IA (Investment Adviser) unless he/she has obtained a certificate of registration from Sebi by complying with the requirements.
However, Mahavir was the de facto person in-charge of the investment advisory activity of Sonika Namdharani and was holding himself out as an IA to the employees and clients of Fincap Research, the regulator said in the order.
In a separate order, Sebi also cancelled the certificate of registration of Sonika Namdharani -- Proprietor of Fincap Research Investment Advisor for violating the market norms in the same matter. However, the regulator did not issue any directions against her husband Mahavir Mundra.
In another order, the regulator imposed a fine of Rs 5 lakh on Shweta Thakkar for indulging in non-genuine trades in the illiquid stock options segment on BSE.