sebi:CGM/GG/QJC2/WRO/WRO/21366/2022-23
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Facts / Headnote
Violations found; directions issued including restraint on Noticee No. 2 from providing IA services and imposition of monetary penalties jointly and severally on the Noticees.
Provisions invoked
- s. 19
- s. 12(1)
- s. 12A
- s. 15H
- s. 27
Regulations
- Reg. 3
- Reg. 9
- Reg. 1
- Reg. 18(1)
- Reg. 3(a)
- Reg. 3(1)
- Reg. 28
- Reg. 15(9)
- Reg. 13(b)
- Reg. 35
- Reg. 19(3)
Parties
- Mr. Chetan Kalubhai Dhokiya (Noticee No. 1)
- D-Street Investment Advisor Pvt. Ltd. (Noticee No. 2)
- Noticee No. 3
Holding
The Noticees were found to have violated Regulation 13(b) of IA Regulations (non-disclosure of material change including operating from Second Address and use of proprietary names/websites), Regulation 18(1) of IA Regulations (failure to disclose material information to clients), Clause 1(i) of SEBI Circular dated December 27, 2019 (free trial without risk profiling), PFUTP Regulations read with Section 12A of SEBI Act (misleading 'Assured Profit'/'3X Return' claims), and Section 12(1) of SEBI Act read with Regulation 3(1) of IA Regulations (unregistered IA activity by Noticee No. 2).
Full text
Order in the matter of Mr. Chetan Kalubhai Dhokiya Page 2 of 27 of the relevant circulars have been alleged to be violated by the Noticees. Besides this, the Noticees have also been alleged to have violated Regulations 3(a), (b), (c), (d), 4(1), 4(2)(k) and 4(2)(s) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”) read with Section 12A (a), (b), (c) of SEBI Act, 1992. As the Noticees were allegedly involved in the Investment Advisory activities without obtaining registration mandated under the provisions of the SEBI Act, 1992 read with the provisions of IA Regulations, it was alleged that the Noticees have violated the provisions of Section 12(1) of SEBI Act, 1992 read with Regulation 3(1) of IA Regulations and Section 27 of SEBI Act, 1992. The facts of the matter along with the replies and submissions of the Noticees are being elaborated in the later part of this
Order in the matter of Mr. Chetan Kalubhai Dhokiya Page 3 of 27 a. Noticee No. 1 is registered as an IA in individual capacity with SEBI having registration No. INA000007979. The registration was granted with effect from July 04, 2017. The registered and the official correspondence address of Noticee No. 1 is 101, Vikramanagar-1, Puna to Bombay Market Road, Punagam, Surat, Gujarat, 395010 (hereinafter referred to as “Registered Address”). b. On May 14, 2019, Noticee No. 1 had made an application to SEBI for change of registered office address: 212, Rupa Solitaire, Mahape Business Park, Thane, Navi Mumbai, Maharashtra- 400701 (hereinafter referred to as “Second Address”). Vide e-mail dated February 06, 2020, the said application was withdrawn stating that Noticee No. 1 was in the process of applying as a body corporate. c. SEBI had also received an application dated September 26, 2019 from Noticee No. 2 namely, D-Street Investment Advisor Pvt. Ltd., seeking registration as an IA, wherein it was mentioned that Noticee No. 1 and Noticee No. 3 are the directors and shareholders of Noticee No. 2. d. While examining the application, SEBI had sought the bank account details of the Noticees. In addition to the bank account details of the Noticees, the following bank account details were also submitted:- Bank Account No. Type of account Bank name Branch Name in which the account is held 2013809670 Current Kotak Bank Ltd. Sarthana Dalal Stock 918020040845652 Current Axis Bank Ltd. Navi
Order in the matter of Mr. Chetan Kalubhai Dhokiya Page 4 of 27 6. I now proceed to deal with each of the allegations hereunder.
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Source: SecMarx — sebi:CGM/GG/QJC2/WRO/WRO/21366/2022-23. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.