sebi:Order/SM/DP/2022-23/25284-25292
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Facts / Headnote
Violations found; penalty imposed (quantum not specified in extracted text)
Provisions invoked
- s. 15A
- s. 15
- s. 12A
- s. 15I
- s. 15J
- s. 28A
- s. 65
- s. 65B
Regulations
- Reg. 7
- Reg. 3
- Reg. 4
- Reg. 2(1)(c)
- Reg. 16
- Reg. 17
- Reg. 15
- Reg. 3(a)
- Reg. 15(1)
- Reg. 21(1)
- Reg. 201
- Reg. 15(9)
Holding
The Noticees were found to have violated the PFUTP Regulations and IA Regulations by promising assured/'approachable profit' returns to clients, manipulating risk profiles, splitting fees among relatives of clients, and failing to redress investor grievances. The Adjudicating Officer held that Noticee No. 1 made misrepresentation of being capable of delivering 'approachable profit' and that the directors could not escape liability for violations committed during their tenure.
Full text
In the matter of Highbrow Market Research Private Limited Page 2 of 36 Rajput (hereinafter referred to as “Noticee 8”), Shri Rahul Trivedi ((hereinafter referred to as “Noticee 9” and Collectively referred to as “Noticees”). It is noted that Noticee Nos. 2 to 9 are the Directors of Noticee No. 1 in the following manner:
In the matter of Highbrow Market Research Private Limited Page 3 of 36 show cause as to why an inquiry should not be held and penalty be not imposed on them under Sections 15C, 15EB, 15HA and 15 HB of SEBI Act for the alleged violation of the provisions of IA Regulations. The SCN, inter alia, alleged the following: 3.1. Noticees promised assured profit/ target return to their clients (terming them as “approachable profit”) under various pre-defined packages on the investments made by the clients. By promising unrealistic / exorbitant returns to its clients, despite fully knowing that all the investments in securities market are subject to market risk, Noticees have not been honest and has not taken due care in its dealings in the best interest of its clients. Thus, it was alleged that the Noticees have failed to act in a fiduciary capacity towards its clients, thereby violating Regulation 15(1) and Clauses 1 (honesty and fairness) and 2 (diligence) as specified under Third Schedule of Code of Conduct for Investment Adviser read with Regulation 15(9) of IA Regulations.
In the matter of Highbrow Market Research Private Limited Page 4 of 36 have violated the provisions of Regulation 3 (a), (b), (c) and (d), 4(1) and 4(2)(a),(k),(m),(s) of PFUTP Regulations read with Section 12A(a), (b) and (c) of SEBI Act, 1992.
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Source: SecMarx — sebi:Order/SM/DP/2022-23/25284-25292. 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.