SEBI issued an order on May 12, 2016, against two individuals who provided investment related advisory services without a certificate of registration from SEBI. The individuals were offering for a fee, trading tips and stock specific recommendations through mobile SMSs/WhatsApp messages and on their website which contained enticing and misleading claims. SEBI had issued an ad interim ex-parte order in June 2014 (which was subsequently confirmed in September 2014), directing the entities to cease and desist from acting as investment advisors. Further investigation has now revealed that the individuals provided investment advisory services without registration under the SEBI (Investment Advisers) Regulations, 2013, and have also violated provisions of the SEBI (PFUTP) Regulations, 2003 (the anti-fraud regulations of SEBI). SEBI, among other directions, issued an order to impound the unlawful gains of over Rs. 5 crore jointly and severally from the entities.
Apart from this instance, SEBI has taken action (between December 2014 and July 2015) against six other unregistered individuals/entities for providing investment services to the general public. SEBI also issued a press release recently cautioning the public to deal only with SEBI registered investment advisers and research analysts, and to check the registration status of the entity/person on the SEBI website before availing any such service. SEBI has specifically cautioned against trading based on tips received through SMS/ other forms of communication from such entities and not to get misled by advertisements through public media, telephone calls, mass messaging which solicit investments or promise unrealistic returns.
