Regulator Sebi today said it has barred Stapes Capital Research and its two directors from acting as investment advisors for providing unauthorised trading tips to investors.
Regulator Sebi today said it has barred Stapes Capital Research and its two directors from acting as investment advisors for providing unauthorised trading tips to investors. The Securities and Exchange Board of India (Sebi) found that the entities were acting as investment advisors without securing registration from the regulator. By indulging in such activities, they have violated the regulator’s investment advisors norms.
Sebi received a complaint where it was alleged that Stapes Capital Research Pvt Ltd (SCRPL) had collected subscription fee from the complainant on assurances that by trading on the calls given by it, he would make certain assured minimum profit per month. However, the complainant incurred losses due to these trading calls. In order to verify the details of the activities undertaken by the entity, Sebi sent a letter to the company seeking various information and documents.
In its response, the firm said it was providing trading advice in the stock market and was in the business of investment advisory/research analyst since October 2015. It further submitted that it had a total of 46 clients and had collected Rs 5.34 lakh as subscription for its stock and commodity advisory services. Also, the firm contended that it was in the process of making registration with Sebi.”It is clear that the entity is operating unregistered advisory services business. It is observed that even though SCRPL has submitted… letter that it is in the process of getting registration with Sebi, there is no record of the entity having submitted an application to Sebi in this regard,” Sebi noted.
Accordingly, Sebi, in a statement issued today, directed Stapes Capital and its directors — Ram Singh and Prashant Gangwar — “to cease and desist from acting as an investment advisor and cease to solicit or undertake such activity or any other activities in the securities market, including buy, sell or otherwise deal in the securities market”. Furthermore, they have been directed not to divert any funds raised from investors that are kept in bank accounts or in their custody. Besides, the watchdog has asked the firm and its directors to immediately withdraw and remove all advertisements, representations and the like in relation to their investment advisory or any unregistered activity in the securities market.