sebi:WTM/AB/WRO/WRO/12218/2021-22

SEBI · SEBI · Ananta Barua, Whole Time Member

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

Facts / Headnote

Noticees found to have acted as unregistered investment adviser; directed to cease and desist, refund fees to clients/investors within three months, issue public notice, file compliance report, and debarred from securities market for 2 years or till completion of refunds whichever is later.

Provisions invoked

• s. 19
• s. 12(1)
• s. 12A
• s. 28A

Regulations

• Reg. 11
• Reg. 3
• Reg. 4(1)
• Reg. 2(1)
• Reg. 3(1)
• Reg. 2(1)(m)
• Reg. 4(2)(k)

Parties

• Prowise Capital (Partnership firm)
• Prowise Consultancy (Proprietorship of Yogendra Gangrade)
• Yogendra Gangrade
• Swati Purwar
• Vaibhav Patil
• Arun Jatav

Holding

Noticees provided investment advice for consideration without SEBI registration, violating Section 12(1) of SEBI Act and Regulation 3(1) of IA Regulations and Regulation 4(2)(k) of PFUTP Regulations, and were directed to refund client fees, cease and desist, and remain debarred for two years.

Full text

Final Order in the matter of Prowise Capital Page 2 of 19 Act, 1992”) and Regulation 3(1) of SEBI (Investment Advisers) Regulations, 2013 (hereinafter referred to as “IA Regulations, 2013”). Further, in the interim order, the activities of the Noticees were prima facie found to be fraudulent and manipulative and in violation of provisions of Section 12A (a), (b) & (c) of SEBI Act, 1992 and Regulations 3 (a), (b), (c) & (d) and Regulations 4(1) and 4(2)(k) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003). By the

Final Order in the matter of Prowise Capital Page 3 of 19 immediately but not later than 5 working days from the date of receipt of this order. (viii) ICICI Bank and Axis Bank wherein Prowise Capital (ICICI Bank Account No. 024105501391) and Prowise Consultancy (Axis Bank Account No. 918020093327341) are holding bank accounts, are directed not to allow any debits/ withdrawals from and credits to the said accounts, without the permission of SEBI. The Banks are directed to ensure that all the above directions are strictly enforced. (ix) The Depositories are directed to ensure that till further directions no debits are made in the demat accounts of Prowise Capital and Prowise Consultancy, Arun Jatav, Vaibhav Patil, Swati Purwar & Yogendra Gangrade, held jointly or severally. (x) The Registrar and Transfer Agents are also directed to ensure that till further directions the securities, including Mutual Fund units, held in the name of Prowise Capital and Prowise Consultancy and Arun Jatav, Vaibhav Patil, Swati Purwar & Yogendra Gangrade, jointly or severally, are not transferred or redeemed.”

Final Order in the matter of Prowise Capital Page 4 of 19 a. SEBI received a complaint vide email dated February 14,2020 against Prowise Capital (hereinafter referred to as ‘Prowise capital’) wherein, the complainant, inter-alia, alleged that the complainant paid Rs.1.90 Lakhs with 18% GST for HNI advisory services. The company allegedly committed to increase the complainant’s assets to Rs.10.00 Lakhs but immediately after starting the services the complainant’s funds decreased from Rs.1.20 lakhs to Rs.0.86 lakh. Further, Prowise capital had claimed to be registered with SEBI for providing Investment advisory services. b. In view of the complaints received, SEBI carried out a preliminary examination to ascertain whether unregistered investment advisory activities are being carried out by the firm. To that end the website of the firm, www.prowisecapital.com. and particulars of its bank accounts were perused to gather information. On visiting the website on google, the following message is displayed: “Under maintenance”. However, it is noted that above website is active while clicking on the link viz., ‘under maintenance’. The print out of the webpages of the firm’s website are taken and have been placed on record. c. The entity is not registered with SEBI. d. The website provides information that Prowise Capital offers packages viz., Stock Tips, Stock Future Tips, Nifty Future Tips, Option Tips, Commodity Tips, MCX Tips, NCDEX Tips, Pro Pack Commodity, etc. to its clients as p

Source: SecMarx — sebi:WTM/AB/WRO/WRO/12218/2021-22. 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.