While suspending registration of Highbrow Market Research Pvt Ltd for one year, market regulator Securities and Exchange Board of India (SEBI) has banned the firm and its directors Chandan Singh Rajput, Rahul Trivedi, Sunil Atode, Girish Kumar Pahwani, Laxmikant Sharm, Mohit Chhaparwal, Hemant Agrawal and Swapnil Prajapati (noticees) from markets for one year for violating various rules and regulations for investment advisories (IAs).
According to SEBI Highbrow and its directors acted in a fraudulent and manipulative manner while dealing with clients and have violated provisions of PFUTP Regulations.
In an order, Ananth Narayan G, whole time member (WTM) of SEBI, says, "Highbrow has violated various provisions of IA Regulations with the sole aim of generating more income for itself at the cost of its clients. Not only were the clients induced and their grievances not resolved within the prescribed timelines, even their risk profiling was done in a reckless manner without following any objective standards and investment advice in the form of various packages was given to the clients without paying any heed to the principles of suitability as envisaged under IA Regulations."
SEBI stated that Highbrow commitment to continue service post the tenure of package was motivated by its commitment to serve its client to his satisfaction. "Highbrow was under a contractual obligation to provide services to its client for consideration till the tenure of the service. The promise of continued service till the 'approachable profit' was reached, suggests that a particular profit is achievable provided the client avails the service of Highbrow."
According to SEBI investigation, Highbrow was also selling multiple packages to its clients within a short period of time, selling the same package within a few days and by charging unreasonable fees, and failed to act in a fiduciary capacity towards its clients as its interest of maximising revenue was in direct conflict with the interests of its clients. "The advisory was not honest in its dealings with its clients and has failed to exercise due care, skill and diligence while advising its clients," it says.
The SEBI WTM observed that the risk evaluation and the category of risk assigned to the clients was done by Highbrow was in a reckless and careless manner. He says, "It was pre-decided to sell a particular service to the prospective clients without placing reliance on the response of the client or on any objective metric to determine the risk profile of a client. Thus, Highbrow was keeping its own interest at higher pedestal at the cost of the interest of its clients, which shows that Highbrow was not acting honestly while advising its client."
The market regulator also mentioned that Highbrow has assured or promised returns to its clients and to that effect, it has manipulated the risk profile of its clients and has sold them multiple services by charging them unreasonable fees and without paying any heed to the principles of suitability.
SEBI also observed that from the risk profile of one LN Singh that his gross annual income was between Rs1-Rs5 lakh, however, the fees collected from him is Rs78.38 lakh. "The fees is highly disproportional to the gross annual income of Mr Singh. There was no material fact whether or not the wife and daughters of Mr Singh had independent source of income. On preponderance of probability it can be held that the family members of Mr Singh were on-boarded by Highbrow to justify exorbitant fees charged by it from the client," SEBI says.
Further there was 93 investor's complaints which were forwarded to Highbrow on SCORES and it has failed to resolve these complaints within the prescribed time limit which is violation of IA Regulations.
Plz, Give me detail The complaint against high brow market advisory Private Limited(ways2capital) Mr Mohit chhaparwal director. Indore
I had filed a complaint against the company in SEBI, after that this complaint is pending with "Sama" and "Sama" has asked me to pay the fees for mediation. But the company has refused for mediation and is not agreeing to any of the words of "Sama" and is also not paying.. Now you tell us what should we do.. Apart from this, is there any other action against the company? Being taken please give me information...reply to my email..
thanks a lot
Ganesh Dase
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