sebi:Order/SM/S./2023-24/28603

SEBI · SEBI · 2023-03-17 · Soma Majumder, Adjudicating Officer

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Facts / Headnote

Violations established against the Noticee; monetary penalty held attracted under Sections 15EB, 15HA and 15A(c) of the SEBI Act

Provisions invoked

• s. 11
• s. 15A
• s. 15
• s. 12
• s. 15H
• s. 15J
• s. 28A
• s. 15E

Regulations

• Reg. 4
• Reg. 3
• Reg. 13
• Reg. 2(1)(c)
• Reg. 4(1)
• Reg. 16
• Reg. 9
• Reg. 199
• Reg. 25
• Reg. 4(2)
• Reg. 15
• Reg. 16(2)
• Reg. 29(1)
• Reg. 29
• Reg. 27
• Reg. 2
• Reg. 21(2)
• Reg. 21
• Reg. 2(h)
• Reg. 3(a)

Parties

• Manish Goel

Holding

The Adjudicating Officer held that Manish Goel, Research Analyst, violated Regulations 13(i), (iii), 15(1), 15(2), 24(1), 25(1), 18(7), 19, 20(1), 21(1), 16(2), 16(3) of the RA Regulations with Code of Conduct clauses, SEBI PMLA Circulars, and Regulations 3(a)-(d) and 4(1) and 4(2)(k), (o), (s) of the PFUTP Regulations read with Sections 12A(a)-(c), and that these violations attract monetary penalty under Sections 15EB, 15HA and 15A(c) of the SEBI Act.

Full text

Adjudication Order in the matter of Manish Goel, Research Analyst Page 2 of 46 APPOINTMENT OF ADJUDICATING OFFICER 2. Vide order dated March 17, 2023, SEBI appointed the undersigned as the Adjudicating Officer under Section 15-I of the SEBI Act read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) to inquire into and adjudge under:- 2.1. Section 15EB of SEBI Act, for the alleged violation of:- (a) Regulation 13 (i), (ii), (iii), 15(1), 15(2), 24(1), 25(1), 18(7), 19, 20(1), 21(1), 25(3) and the Clauses 1, 2, 3, 6, 7 and 8 of the Code of Conduct as specified in Third Schedule under Regulation 24(2) of RA Regulations. (b) Regulations 16(2), 16(3) and Clauses 1, 2, 3, 6, 7 and 8 of the Code of Conduct as specified in Third Schedule under Regulation 24(2) of RA Regulations read with Regulation 21(2) and point 35 of the FAQs to RA Regulations issued by SEBI. (c) Circulars ISD/CIR/RR/AML/1/06 dated January 18, 2006 (hereinafter referred to as “SEBI PMLA Circular 1”) and ISD/CIR/AML/2/06 dated March 20, 2006 (hereinafter referred to as “SEBI PMLA Circular 2”) read with SEBI Master Circular SEBI/HO/MIRSD/DOP/CIR/P/2019/113 dated October 15, 2019 (hereinafter referred to as “SEBI Master Circular”; aforesaid circulars are hereinafter collectively referred to as the “SEBI PMLA Circulars”) and Clauses 1, 2, 6, 7 and 8 of the Code of Conduct as specified in Third Schedule under Regulation 24(2) of RA R

Adjudication Order in the matter of Manish Goel, Research Analyst Page 3 of 46 Clauses 1, 2, 3, 6, 7 and 8 of the Code of Conduct as specified in Third Schedule under Regulation 24(2) of RA Regulations.

Adjudication Order in the matter of Manish Goel, Research Analyst Page 4 of 46 a SEBI Registered Investment Adviser (RIA) while undertaking business as a Research Analyst thus failed to ensure independence of its research activities from his other business activities and also failed to maintain an arms-length relationship between his research activities and other activities. In view of the above it has been alleged that Noticee has violated the provisions of Regulation 15 (1) and the clauses 2, 6, 7 and 8 of the Code of Conduct as specified in Third Schedule under Regulation 24 (2) of the RA Regulations. d) It has been further alleged in the SCN that RA had traded in stocks recommended by it, during the restricted period stipulated under Regulation 16 of RA Regulations in 5 instances and had also traded contrary to his stock recommendations on two instances, which was in violation of Regulation 16 and internal policies of the RA. In view of the above, it has been alleged that Noticee had violated Regulations 15 (2), 16 (2), 16 (3), 24 (1), and the clauses 1, 2, 3, 6, 7 and 8 of the Code of Conduct as specified in Third Schedule under Regulation 24 (2) of the RA regulations read with Regulation 21(2) and point 35 of the FAQs to RA Regulations issued by SEBI. e) It has been alleged in the SCN that the Noticee had not maintained any records of rationales in respect of at least 16 out of 19 stock specific recommendations made by him and that the Noticee gave recommendations witho

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