Illegal Investment Advisory: Tapas Das of Thousand Keys Banned for 1 Year

Moneylife Digital Team 20 January 2025

Investor Interest

Securities and Exchange Board of India (SEBI) has imposed a one-year ban on Tapas Das, proprietor of Thousand Keys, for providing illegal investment advisory services. SEBI has ordered Mr Das to refund Rs71.38 lakh, which he received from complainants and clients as fees for his unregistered investment advisory activities.

In an order, Santosh Shukla, chief general manager (CGM) of SEBI, says, "It can reasonably be inferred that it Mr Das, who himself was actively involved in all the activities in respect of the unregistered investment advisory activities of Thousand Keys and Fine Solution. Mr Das was knowingly party to the entire episode and his concern Thousand Key was actively involved in the unregistered investment advisory activity in the name of Fine Solution through the said website. Thus, he cannot escape liability."

SEBI received a complaint on 22 January 2022 against Thousand Keys. The complainant alleged that Thousand Keys had falsely claimed to be registered with SEBI and provided trading tips to the complainant, charging a service fee for the advice. The complainant further alleged that they incurred heavy losses based on the recommendations provided by Thousand Keys.

In addition to the complaint, the complainant submitted screenshots of payments made to Thousand Keys and WhatsApp chat conversations in which Thousand Keys shared bank details for an IDFC First Bank account. The WhatsApp chats revealed specific trading recommendations such as "SELL CAMS @ 1825 TGT @ 1820" and "SELL RELIANCE @ 2035 TGT @ 2020."

SEBI investigation found several concerning details. The website finesolution.site associated with Thousand Keys, which was active when the complaint was received, described the firm as a research organisation offering trading tips at a reasonable price. It claimed to provide services in various market products, including equity, derivatives, indices, commodities, and more, with services priced between Rs8,000 to Rs4.80 lakh.

The website also promoted paid trial services, with prices ranging from Rs2,000 to Rs4,500, excluding taxes. Furthermore, the website listed an IDFC First Bank account for receiving subscription fees from clients.

SEBI also reviewed the know-your-customer (KYC) documents and the bank statement for the IDFC First Bank account. The KYC documents revealed that the account was opened in the name of Thousand Keys, with Tapas Das as the proprietor. The total credit received in the account amounted to Rs71.38 lakh.

SEBI also noted that the website of Thousand Keys, though active for a period, had ceased to be operational by the time of investigation, and the domain was found to be up for sale. Further investigation into the bank account revealed multiple payments from clients, including the complainant, with transaction details indicating that the funds were being received as payments for unregistered investment advisory services.

Notably, Thousand Keys, Mr Das, and Fine Solution were not registered with SEBI as investment advisers or in any other capacity. The investigation revealed that Thousand Keys was providing investment advice without the necessary SEBI registration, violating SEBI's regulations.

Despite being contacted by SEBI in April 2022, Mr Das denied any wrongdoing, asserting that his firm did not engage in any activities requiring SEBI registration, such as investment advisory services. He further refused to provide the information sought by SEBI under Section 11(2)(ia) of the SEBI Act.

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