Sebi bans Tips4Market, proprietor for providing unauthorised investment advisory services

By: |
November 24, 2020 3:36 PM

 Sebi conducted a preliminary examination and found that Tips4Market (T4M) was soliciting and inducing investors to deal in securities market on the basis of investment advice, stock tips among others, prima facie, without having the requisite registration as mandated under the IA norms.

At present, there are 45 mutual funds in India having an average asset under management of Rs 27.60 lakh for the July-September quarter.At present, there are 45 mutual funds in India having an average asset under management of Rs 27.60 lakh for the July-September quarter.

Regulator Sebi has barred Tips4Market and its proprietor Mahesh Vaghajibhai Ramani from the capital markets for providing unauthorised trading tips to investors. Besides, they have been prohibited from carrying out investment advisory services till further orders.

Sebi conducted a preliminary examination and found that Tips4Market (T4M) was soliciting and inducing investors to deal in securities market on the basis of investment advice, stock tips among others, prima facie, without having the requisite registration as mandated under the IA norms. The amount of money, prima facie, observed to have been collected by the company was Rs 96.6 lakh from investors through such services.

By indulging in such activities, they violated the provisions of investment advisers (IA) Regulations, the Securities and Exchange Board of India (Sebi) said in an interim order last week. Sebi has directed T4M and its sole proprietor Ramani to “cease and desist from acting as an investment advisor” until further orders.

They have been asked to immediately withdraw and remove all advertisements,in relation to their investment advisory activity until further orders. Further, the regulator has prohibited them from diverting any funds raised from investors and restrained them from disposing of any assets, whether movable or immovable, including money lying in bank accounts, except with the prior permission of Sebi.

Sebi has asked them “not to access the securities market and buy, sell or otherwise deal in securities in any manner whatsoever, directly or indirectly, until further orders”. T4M and Ramani may file the objections and/or request for personal hearing, if any, receivable by Sebi within 21 days from the date of the order and contest the findings, Sebi said in the interim order passed on November 20.

If the objections or the request for personal hearing, if any, are not received by Sebi within the prescribed period, then it will be construed that they have no objections to offer and have admitted the finding or allegations that have been made against them, the regulator said.

In the event of the same, final directions will take effect against T4M and Ramani, it added. The final directions include T4M and Ramani will have to refund the money received from the clients in respect of the unregistered investment advisory activities and submit a certificate from a Chartered Accountant, within a period of three months from the date of the expiry of the prescribed period.

Further, they will be barred from the capital markets “till the expiry of five years from the date of refund of the money” under the final direction. The interim directions would take effect immediately. If objections or request for personal hearing are not filed and received by Sebi within the prescribed period,then the interim directions would operate till the prescribed period and thereafter the final directions would take effect, Sebi said.

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