Sebi penalises NIAO, its proprietor for unregistered advisory services

The order came after Sebi received a complaint alleging that an unknown entity had launched a fake website which was similar to its website and was promoting stock trading tips mostly in penny stocks.

Sebi penalises NIAO, its proprietor for unregistered advisory services
The amount is to be paid by the entities jointly and severally.

Regulator Sebi has levied fines totalling Rs 6 lakh on the National Investment Adviser Organisation(NIAO) and its proprietor Nitin Sharma for providing unauthorised investment advisory services.

In addition, the two have been restrained from the securities market for six months.

The order came after Sebi received a complaint alleging that an unknown entity had launched a fake website which was similar to its website and was promoting stock trading tips mostly in penny stocks.

Pursuant to the receipt of the complaint, the regulator examined the matter and found that the NIAO and Sharma had carried out investment advisory activities without obtaining registration from Sebi in violation of IA (Investment Advisers) regulations.

The amount of money prima facie observed to have been collected by the NIAO and Sharma was Rs 5.54 lakh during the period November 2015 to September 2016, Sebi said in its order on Thursday.

Therefore, the regulator has imposed a combined fine of Rs 6 lakh on the NIAO and Sharma for violating the provisions of IA norms and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules, it added.

NIAO and Sharma are collectively referred to as notices.

In its order, Sebi directed the noticees to refund within three months the money received from the investors as fees in respect of their unregistered advisory activities.

They have also been restrained from accessing as well as dealing in securities markets directly or indirectly in any manner for six months from the date of this order or till the expiry of six months from the date of completion of refund to investors, whichever is later.

In addition, they have been prevented from selling their properties, securities and mutual funds holding except for the sole purpose of making the refunds.

Meanwhile, in a separate order, the regulator imposed a fine of Rs 1 lakh on five entities for disclosure lapses in the matter of Mishka Finance and Trading Ltd.

The amount is to be paid by the entities jointly and severally.

In another order, the market watchdog imposed a fine of Rs 1 lakh on Niche Technologies for violating regulatory norms.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos