IA shows ‘casual approach’ to regulations, registration suspended for 3 months

"A mere complaint to the police authorities by a person does not carry much weightage," the Sebi order noted.

An investment advisory, which came up with "the flimsiest of defences" against allegations levelled against it found its registration suspended for three months.

The advisory, Podium Market Research, cited reasons such as a "lapse" and a robbery for violating the Investment Advisory Regulations. The robbery could not even be proven because the YouTube link that supposedly captured the theft had no video clip, noted the market regulator's order.

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In the order dated December 14, the Securities and Exchange Board of India (SEBI) noted the "casual approach of the Noticee with respect to adherence to the statutory requirements under the law", and suspended the advisory's registration for three months or till whenever it has got the necessary certification.

The advisory was found to have been running without renewing its certification, and it promised SEBI that it would prioritise the certification and that it would set up an "alert system" to ensure that such lapses do not occur in future. But, more than a year later, it was still found to be operating without the certification.

In response to the allegation that it did not maintain client documentation adequately, the advisory said that some of the paperwork was done offline and that they were lost to theft. It even provided the Sebi's officials with a YouTube link that supposedly captured this. But as the order from Sebi noted, the YouTube link "does not show any video of the theft" at the advisory's premises.

The advisory's proprietor Sumar Kumar submitted a copy of a police complaint that he had filed about the robbery. But the Sebi order said that it was "nothing but a narrative of the incident of theft, which is claimed to have happened at the Noticee’s office premises".

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No further authentic documents showing the status of the investigation carried out by police authorities into the matter and so on were submitted "to substantiate the claim". "A mere complaint to the police authorities by a person does not carry much weightage," the order stated.

The third allegation was on charging clients more than the permitted limit, which is Rs 1.25 lakh. The SEBI order said that verification of collection of fee showed that seven of the advisory's clients were overcharged, and therefore the advisory was in violation of the regulations.