Market regulator Securities and Exchange Board of India (SEBI) has cancelled the registration of Elite Investment Advisory Services, a proprietary firm run by Rajiv Kumar Singh, after finding a series of serious violations ranging from misleading clients to flouting basic compliance norms.
The order follows an inspection conducted between January 2024 and March 2024, which revealed systemic non-compliance with SEBI’s Investment Advisers (IA) Regulations and fraudulent practices under PFUTP norms.
SEBI investigation found that the firm and its personnel lacked the required qualifications and valid National Institute of Securities Markets (NISM) certifications, raising fundamental concerns about its eligibility to provide investment advice. Despite serving over 1,000 clients, well above the regulatory threshold of 150, the entity failed to transition to a non-individual advisory structure as mandated by the rules.
The regulator also observed that the advisory firm charged clients fees exceeding the prescribed cap of ₹1.25 lakh per annum under the fixed-fee model. In addition, it failed to carry out mandatory risk profiling and suitability assessments, thereby exposing clients to potentially inappropriate investment advice.
More troubling were findings indicating unethical and misleading practices. The firm allegedly promised assured returns and guaranteed recovery of losses, claims explicitly prohibited under securities laws. Call recordings examined during the probe suggested that employees actively used such assurances to induce clients to subscribe to advisory services.
SEBI also flagged serious lapses in transparency and governance. The firm failed to disclose material information to clients, did not maintain required records, such as client agreements and advisory logs, and neglected its obligations to address investor grievances. In fact, it received 174 complaints from 42 clients but could not provide evidence of proper resolution.
The inspection further uncovered questionable financial dealings, including unexplained credits of ₹2.37 crore in the firm’s bank account, suggesting possible receipt of funds from undisclosed sources or engagement in activities beyond permitted advisory services.
In a particularly serious observation, SEBI noted that the noticee attempted to obstruct the inspection process by withholding information, deleting data and directing employees to leave the premises, conduct that was termed as a deliberate attempt to hinder regulatory oversight.
Notably, Mr Singh did not contest the allegations and accepted the recommendation to cancel his registration, citing financial and health constraints. He also failed to appear for a scheduled personal hearing despite multiple opportunities.
Taking into account the gravity and breadth of violations, the order immediately cancelled the investment adviser registration of Elite Investment Advisory Services.
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