sebi:Order/AK/JR/2025-26/31372

SEBI · SEBI · 2023-06-14 · Amit Kapoor, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Provisions invoked

Regulations

Parties

Holding

The Adjudicating Officer found several alleged violations by the Noticee (Wealth Factor) established, including violations of regulations 15(13) read with 7(2) and Code of Conduct clauses 1, 2 and 8 read with regulation 15(9), regulations 15(12) and 25(1), and regulation 19(1)(g) of the IA Regulations. The final disposition and penalty amount are not stated in the provided excerpt.

Full text

Adjudication Order in the matter of Wealth Factor Page 2 of 38 of section 15-I of the SEBI Act and rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as the “Adjudication Rules”) appointed Shri Amar Navlani as Adjudicating Officer (hereinafter referred to as “AO”), vide order dated June 14, 2023, to inquire into and adjudge the alleged violations by the Noticee. Upon transfer of the matter, the undersigned was appointed as the Adjudicating Officer, vide order dated November 22, 2024.

Adjudication Order in the matter of Wealth Factor Page 3 of 38 4.6 Noticee does not have an Anti-Money Laundering (AML) policy; never appointed Principal Officer and Designated Director and accordingly the same has not been intimated to FIU; no training related to PMLA has been provided to employees, till date from date of registration 4.7 Noticee sold same products to clients for the same service period with the sole objective of extracting maximum amount of fees from the clients 4.8 Noticee provided free trials to its prospective clients in 1761 instances 4.9 Noticee provided same service to clients irrespective of their risk profile. Also a service type provided is not mentioned in the pricing list available on its website and pricing details submitted and Not ensured that investment advice rendered is appropriate to the risk profile and financial situation of the clients 4.10 Noticee followed unfair and fraudulent practices to lure the client and maximize its revenue by promising guaranteed/ unrealistic return and profits to the clients, creating an impression that investment advice is risk-free, is not susceptible to market risks and providing wrong information to clients 4.11 Noticee submitted false experience details at the time of making application for grant of registration as an IA, and not meeting the eligibility criteria of experience prescribed for an IA and has not intimated SEBI about change of principal office address.

Adjudication Order in the matter of Wealth Factor Page 4 of 38 5.2 Submission of inconsistent and incorrect data to the Inspection team regarding number of employees and risk profiling and suitability assessment of clients: In response to the allegation concerning employee data, the Noticee submits the following:  The initial submission included data of current employees only due to an unintentional misunderstanding.  Upon realizing the error, the Noticee duly submitted a complete list of all employees employed during the inspection period, which was also acknowledged by SEBI. Further, while acknowledging the discrepancy between the heading and description of Allegation 14.2 in the Show Cause Notice, the Noticee, assuming this to be a clerical error, offers the following clarification:  The Noticee has consistently conducted KYC, risk profiling, and suitability assessments for all clients before providing any services.  During the inspection, however, due to the stressful atmosphere created by the inspecting officers, certain client records were temporarily unavailable. If the Noticee’s intention was to maximize revenue instead of providing best services to the clients then in that scenario, many of clients would have filed complaint against the Noticee, whereas none of the complaints had stated the same and at the time of inspection not a single complaint was pending against the Noticee. Also, the allegation regarding a non-existent table linking annual income with inves

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Source: SecMarx — sebi:Order/AK/JR/2025-26/31372. 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.