sebi:QJA/KS/WRO/WRO/29269/2023-24

SEBI · SEBI · 2023-04-10 · K Saravanan, Chief General Manager

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

Facts / Headnote

Violations held established under SEBI Act, PFUTP Regulations and IA Regulations; Noticees held not 'fit and proper' - operative directions truncated in excerpt

Provisions invoked

• s. 19
• s. 12A
• s. 12(3)

Regulations

• Reg. 7
• Reg. 3
• Reg. 6
• Reg. 4
• Reg. 4(1)
• Reg. 16
• Reg. 9
• Reg. 17
• Reg. 8
• Reg. 15
• Reg. 2
• Reg. 15(1)
• Reg. 13(a)
• Reg. 21(1)
• Reg. 23
• Reg. 8(1)
• Reg. 15(2)
• Reg. 15A
• Reg. 4(2)(k)
• Reg. 24

Parties

• Bull Research Investment Advisors Private Limited (Noticee No.1)
• Noticee No.2 (Director)
• Noticee No.3 (Director)
• Noticee No.4 (Director)

Holding

The Noticees promised assured returns/loss recovery, misled clients on fees, suitability and KYC, operated without valid certification and without meeting net-worth, thereby violating IA Regulations, PFUTP Regulations and SEBI Act and failing the 'fit and proper' criterion.

Full text

_____________________________________________________________________________________________ Page 2 of 57 Enquiry proceedings in the matter of Bull Research Investment Advisors Private Limited observed that the Noticees, prima facie, violated provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act”), SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) and SEBI (Investment Advisers) Regulations, 2013 (hereinafter referred to as ‘IA Regulations’) and provisions of SEBI Circular CIR/OIAE/2014 dated December 18, 2014.

_____________________________________________________________________________________________ Page 3 of 57 Enquiry proceedings in the matter of Bull Research Investment Advisors Private Limited 5.3. IA sold multiple packages to clients and did not make adequate disclosure with regard to fee. IA collected from its clients’ multiple times for the same service. IA forced client to pay additional charges in the name of GST 5.4. IA took payment before doing KYC and risk profiling of clients. IA raised payment receipts for subscribed services in the name of entities who cannot even trade in the securities market as they did not have demat / trading account. 5.5. IA didn’t carry out risk profiling of the clients in a prudent manner. IA didn’t carry out suitability analysis for the client and sold products/ services based on suitability declaration which were not suitable to the client and which were not commensurate with the risk taking ability of the clients. 5.6. IA operated without being eligible to operate as NISM Level -1 certificate of the representative of the IA expired on January 13, 2020 and was not renewed. 5.7. IA did not submit information sought by SEBI. 5.8. IA did not meet the capital adequacy norms and took registration by submitting forged CA certificate to SEBI. The IA violated fit and proper criterion specified by SEBI. 5.9. IA failed to resolve investor grievance of a client and got complaint closed from the client by misleading him and making false commitments.

_____________________________________________________________________________________________ Page 4 of 57 Enquiry proceedings in the matter of Bull Research Investment Advisors Private Limited Regulation 15 (9) of IA Regulations and Regulation 3 (a), (b), (c), (d) and Regulation 4(1), 4(2)(k)(o) and 4(2)(s) of PFUTP Regulations, read with Section 12A(a), (b) and (c) of SEBI Act. 7.2. Noticees have violated Regulation 16(a),16(b)(ii) read with regulation 17(a) of IA Regulations. 7.3. Noticees have violated regulation 6(e), 6(f) read with Regulation 8(1), 13(a) of IA Regulations and Regulation 7(2)(e) of Intermediaries) Regulations. 7.4. Noticees have violated Regulation 6(c) read with Regulation 7(2) read with Regulation 13(a) read with Regulation 15(13) of IA Regulations.

Source: SecMarx — sebi:QJA/KS/WRO/WRO/29269/2023-24. 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.