A SEBI Order directed Global Mount Money Research and Advisory and its directors and related entities to cease and desist from acting as Investment Adviser and cease to solicit or undertake such activities or any other unregistered activity in the security market directly or indirectly.
These entities have further been directed to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites etc. in relation to his investment advisory or any unregistered activity in the securities market.
These entities were engaged in providing investment advisory services to public at large without obtaining requisite registration from SEBI for the same and as a result have violated provisions of the SEBI Act, 1992 and SEBI (Investment Advisers) Regulations, 2013.
SEBI received information in respect of the activities of a Madhya Pradesh-based entity viz. Global Mount Money Research and Advisory Pvt. Ltd. (Global Mount) providing investment advice to general public through its website (www.globalmountmoney.co), without obtaining necessary registration from SEBI. When SEBI wrote to them for information about their activities, no reply was forthcoming. A SEBI official then visited the office of Global Mount at 504, Shagun Tower, Plot no. 07, PU-04, Scheme no. 54, Vijay Nagar Square, A B Road, Indore, Madhya Pradesh on December 24 and December 31, 2013 to obtain information about the working of Global Mount. It was found that the entity was carrying out investment advisory services in shares, derivatives and commodities. The website of Global Mount claimed the following strengths:
(a) Global Mount Money Research and Advisory is one of the India’s finest research and stock advisory company deals in intra-day tips and positional tips. We provide equity tips as well as commodity tips.
(b) We offer diversified range of services as per the investments of an investor, trader or a broker. Global Mount Money offers best stock future tips.
(c) In stock cash tips we provide intraday and positional services. In which we provide tips on cash scripts with most accurate level.
Subsequent to this, SEBI undertook a preliminary examination of the activities of Global Mount. One of the SEBI officers, posed as an ordinary investor, registered for free trials on the website of the entity viz. www.globalmountmoney.co. On successful registration, a representative of Global Mount contacted at the mobile number given at the time of registration for free trials.
SEBI also contacted the entities’ bankers and obtained information about them.
From the information gathered by SEBI, it observed:
(a) Rajeev Singh Rajput, Arpit Kothari and Ajay Kumar are collecting funds from investors for providing investment advice in the name of different company/ firms /proprietary concern viz. M/s Global Mount Money Research and Advisory Pvt. Ltd., Global Mount Money Research and Advisory, Global Money Financial Services and Global Money Research and Advisory.
(b) It is further observed that Global Mount Money Research Advisory Pvt. Ltd. (Company), Global Mount Money Research and Advisory (Partnership firm) and Global Money Research and Advisory (proprietary firm) are operating as one entity as is evident from the website of Global Mount, wherein at the home page, the entity was mentioning itself as Global Mount Money Research and Advisory and as a company. It is relevant to note that all the bank accounts given on the webpage are of the proprietary firm, viz. Global Money Research and Advisory. It is observed that all the directors of Global Mount are partners of the firm, Global Money Financial Services.
(c) As has been observed earlier, one of the directors of Global Mount, viz. Rajeev Singh Rajput is the proprietor of Global Money Research and Advisory. Two of the directors of Global Mount, Rajeev Singh Rajput and Arpit Kothari are partners of the firm Global Mount Money Research and Advisory. It is also noted that all the three directors of Global Mount, viz. Rajeev Singh Rajput, Ajay Kumar and Arpit Kothari are partners of Global Money Financial Services.
(d) It is further noted that website of Global Mount, i.e. http://www.globalmountmoney.co, the name of the entity is mentioned as Global Money Research and Advisory (proprietary firm).
(e) The entity is claiming to have 4,232 active clients.
(f) High Accuracy is claimed by the entity, in their tips without any substantial evidence for the same.
(g) Marketing executives of the firm calls prospective clients for registration as free trial clients. Also, some clients register for free trials after pursuing the website of Global Mount.
(h) Tips are being provided to the investors through SMS/calls as evident from the SMS tips and calls received by the SEBI Official, who had registered for free trial, as an ordinary investor.
(i) Bank Account details are mentioned on the website for online payment. From bank statements provided by the respective banks, it is evident that there is a regular flow of funds in bank accounts of the entity from various individuals across the country which is equivalent to fees charged by the entity for his advisory services.
This is the nature of business being carried out by the entities.
Hence, SEBI in its Order observes, “SEBI has been entrusted with the duty to protect the interests of investors and protect the integrity of the securities market. Considering the facts and circumstances of the present matter and on the basis of prima facie findings, it is necessary to intervene in this matter to take immediate steps to prevent such persons from engaging further clients. This is also a case where, effective and expeditious action is required to be taken to prevent any possible harm to investors caused by the unauthorized activities of the aforementioned entities and its Directors/ Partners/ Proprietor.
Hence, SEBI issued the “cease and desist” order mentioned earlier and also instructed the entities from advertising their services.
SEBI has also maintained that this Order does not stop it from taking any further action against the entities carrying out the unregistered activity of Investment Adviser.