SEBI Bans Entities From Securities Market In Unauthorised Investment Advisory Services Case

SEBI on Wednesday barred Safe Trader and its proprietor Rajnandani Jalkhediya from the securities markets for providing unauthorised investment advisory services and also imposed a penalty of Rs 2 lakh on them. 

In addition, they have been asked to refund Rs 39.64 lakh collected from the clients as fees in respect of their unregistered investment advisory activities.

In its order, SEBI found that the entities were providing investment advisory services without obtaining a registration certificate from the regulator, which was in violation of the provisions of Investment Advisers (IA) rules.

The order revealed that over Rs 39 lakh were credited in the accounts of the entities between August 2020 and July 2021.   

"The noticees (Safe Trader and its proprietor) without holding a certificate of registration as investment adviser have knowingly disseminated false information/made misleading statements and held themselves out as investment adviser on their website. Thus, I find that the noticees have also violated ... the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices)  Regulations," SEBI Executive Director S V Murli Dhar Rao  said.

Accordingly, the regulator has barred Safe Trader and its proprietor from the securities market. The debarment would continue till the expiry of two years from the date of completion of refunds to investors.

A penalty of Rs 2 lakh has been levied on them and they have been directed to pay the penalty within 45 days.

In a separate order on Tuesday, SEBI prohibited three entities—SK Financial Services, Satish Kumar Dubey and Amore Growth Advisory Services—from the securities market for one year for indulging in unauthorised investment advisory services and also imposed a penalty of Rs 10 lakh on them. Also, they have been asked to refund the money collected from investors in respect of such services.

As per the regulator, they were involved in the activities of investment advisers without obtaining registration with SEBI, which is in violation of IA rules.