Oops! Investment Advisory tries to sell assured-return service to SEBI official, fined Rs 12 lakh

The investment advisor submitted to the regulator that the testimonials were copy-pasted by its IT executive from other websites. (Photo by Ann H/Pexels)

In a hilarious goof-up, an executive of an investment advisor called up an officer of the Securities and Exchange Board of India (SEBI) and offered assured returns from one of their services, which is like calling up a police officer and trying to sell a stolen mobile.

The market regulator sees the promise of assured returns as a violation of its Prevention of Fraudulent and Unfair Trade Practices Regulations (PFUTP Regulations) and Code of Conduct for Investment Advisors.

To make matters worse (or even funnier) the executive also told the SEBI officer that risk profiling of clients is being done by SEBI – Mumbai, according to a SEBI order passed on July 31. Talk about foot-in-the-mouth!

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The regulator has fined the investment advisory named Investment Visor, owned by Praveen Verman, Rs 12 lakh for various violations and asked the firm to refund fees to resolve disputes raised by clients. On the registration of the advisory, the order stated that it has been cancelled in a parallel enquiry proceeding.

Besides misleading investors, Investment Visor’s list of violations include charging GST to clients even though its GSTN numbers were cancelled, failure to furnish documents and provide information when asked by the regulator’s inspection team, failure to resolve client complaints, poor risk profiling of clients, selling multiple services without any regard for interest of the client in order to maximise its advisory fee, failure to ensure that employees had requisite qualification and certification prescribed under IA Regulations, and misrepresentation and miselling.

On the company’s website investmentvisor.com, details on the research team proved to be false.

It read, “Apart from rich experience, our team who prepares and delivers free and paid content and trading and investing advice have following degrees and educational qualifications. They includes (sic) MBA finance, Certificate in taxation, International Banking and International finance master degree, ICWA degree holder, intermediate CAs, intermediate CSs, CAs, CSs, CFAs, NCFM (NSE's Certification in financial markets) capital markets, NCFM derivatives market, NCFM depositories operations, MCX Certified Commodity Professional and more.”

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But as the SEBI order noted, “the employee details submitted by the Noticee, no employee of the Noticee was NISM (National Institute of Securities Market) qualified or possessing qualifications/ certification in taxation, International Banking, ICWA, CAs, CSs, CFAs. The above claim on the website of the Noticee regarding qualification of research team was found to be false.”

When questioned about the testimonials on their page, which talk of “accuracy on consistent basis” and earning “huge profit in future trading”, the investment advisor submitted to the regulator that the testimonials were copy-pasted by its IT executive from other websites.