Mr. Sourabh Rai vs Sebi

Order Reserved on : 21.03.2023

Date of Decision : 28.03.2023

Appeal No. 269 of 2023

Mr. Sourabh Rai, Partner, M/s. Capproin Financial Advisory Services, Village Hathwas, The-Pipariya, Hoshangabad, M.P. 461 775. .....Appellant

Versus Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent

Mr. Abhishek Mishra, CS for the Appellant.

Mr. Sumit Rai, Advocate with Mr. Manish Chhangani, Ms. Samreen Fatima, Mr. Sumit Yadav, Advocates i/b The Law Point for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Ms. Meera Swarup, Technical Member

Per : Justice Tarun Agarwala, Presiding Officer

1.

The present appeal has been filed against the order dated

December 26, 2022 passed by the Whole Time Member 2

(„WTM‟ for short) of the Securities and Exchange Board of

India („SEBI‟ for short) directing the appellant and other

noticees to refund the amount collected from the investors

within three months in respect of its unregistered investment

advisory activities and further restrained the appellant from

buying, selling or otherwise dealing in the securities market

for a period of three years or till the expiry of three years from

the date of refund of the amount to the investors.

2. The facts leading to the filing of the present appeal is,

that the investigation was started by SEBI on the basis of the

complaints received on the SCORES platform. Upon

examination, it was found that the appellant and other

noticees were found to be carrying out investment advisory

activities without obtaining a certificate of registration.

Accordingly, a show cause notice dated March 12, 2020 was

issued alleging that the appellant and other noticees were

carrying out investment advisory activities without obtaining

a certificate of registration in violation of the provisions of

Section 12(1) of the SEBI Act read with Regulation 3(1) of

the SEBI (Investment Advisers) Regulations, 2013

(„Investment Advisers Regulations‟ for short). 3

3. After considering their replies and the material evidence

on record the WTM found that appellant was a partner in

noticee no. 1 M/s. Capproin Financial Advisory Services

along with noticee no. 3 and were carrying out investment

advisory services and not research market analysis. The WTM

found that the said investment advisory services was being

carrying out without obtaining registration under the

Investment Advisers Regulations.

4. We have heard Shri Abhishek Mishra, CS and

Shri Sumit Rai, learned counsel assisted by Shri Manish

Chhangani, Ms. Samreen Fatima and Shri Sumit Yadav, the

learned counsel for the respondent.

5. The only submission made by the appellant was that he

was not carrying out any investment advisory services and

that he was only carrying out research market analysis for

which no registration was required. In this regard we have

perused the impugned order and we find that the WTM had

dwelt in length in coming to a conclusion that appellant was

carrying on business which was in the nature of investment

advisory services and was not in the nature of research

analysis. The WTM found that the website of the appellant 4

clearly indicated that they were projecting stock tips under

various categories and that were offering prospective

investors, various subscription packages upon charging

different amount for different services. The WTM further

found that the account opening form for the bank account also

indicated the entry of business as "Financial Advisory

Services". The WTM accordingly came to a conclusion that

the appellant was offering tips relating to shares, bullion,

futures and options and such tips / recommendations were in

the nature of investment advisory services and was not in the

nature of research analysis.

6. Nothing has been pointed out by the appellant nor has

any evidence been brought on record to show that appellant

was only providing research analysis and was not carrying out

investment advisory services.

7. In view of the aforesaid, we do not find any error in the

impugned order and is dismissed with no order as to costs.

8. This order will be digitally signed by the Private

Secretary on behalf of the bench and all concerned parties are

directed to act on the digitally signed copy of this order. 5

Certified copy of this order is also available from the Registry

on payment of usual charges.

Justice Tarun Agarwala Presiding Officer

Ms. Meera Swarup Technical Member 28.03.2023 MADHUKAR SHAMRAO Digitally signed by MADHUKAR SHAMRAO BHALBAR Date: 2023.03.28 msb BHALBAR 16:46:23 +05'30'