SEBI calls out Investment Advisor on its "cock and bull story", issues fine of Rs 19 lakh

Though the IA tried to distance itself initially from SSFPS, the regulator found various overlaps in their operations.

An investment advisor (IA) who connived with an unregistered investment advisory "to dupe" clients has been called out by the market regulator for its "cock and bull story".

The IA named Sai Proficient Research Investment Advisory tried to claim that the violations were done by another unregistered entity named Shree Sai Proficient Financial Services (SSPFS) and that the investor-clients' complaints were fake and fabricated. But the market regulator found that the IA had attempted to refund money supposedly collected by the unregistered entity, and uncovered various overlaps between the operations of the IA and SSPFS.

In an order dated December 24, the Securities and Exchange Board of India's (SEBI's) Adjudicating Officer Barnali Mukherjee wrote, "it is nothing but Noticee’s (Sai Proficient's) cock and bull story to cover up the allegations on it and an afterthought to absolve itself from the allegations of its collusion and acting in connivance with SSPFS, using SSPFS as a camouflage to lure the people into its net."

Also read: RA tries to get around various regulations with single disclaimer; SEBI disagrees, issues fine

The regulator fined the IA (registration number:INA000002504), whose proprietor is Meeshika Vishwakarma, Rs 19 lakhs.

One of the allegations was that the investment advisory was it promised assured returns and received money from an unregistered investment advisory.

When investigating this, the regulator found that the entity SSPFS was sending emails to the public in the IA's name and using the IA's registration number, was offering assured returns and was collecting money in the latter's name. SSFPS had used the IA's name when registering with the payment gateway, so clients were getting a payment confirmation in the IA's name and were further misled.

Though the IA tried to distance itself initially from SSFPS, the regulator found various overlaps in their operations. For example, when a client asked SSFPS for a refund, proprietor of the the registered IA Meeshika Vishwakarma responded to that request from her SEBI-registered email IA; and there were various banking transactions between SSFPS and the registered IA.

The SEBI order noted, "the aforementioned alleged activities of SSPFS of using SEBI registered entity’s name, website for collecting money from clients, is a fraudulent activity and
knowing fully well that SSPFS does not have requisite registration from SEBI, Noticee (the registered IA) had allegedly allowed SSPFS to act on its behalf".

It added, "Both the Noticee and SSPFS and their respective Proprietors namely Ms. Meeshika Vishwakarma and Ms. Madhuri Garg in connivance had allegedly deceived the general public that they were dealing with a registered intermediary of SEBI."