Pinnacle Market Investment, Safe Trader Fined Rs30 Lakh by SEBI for Violationing Rules

Moneylife Digital Team 27 January 2023

Securities and Exchange Board of India (SEBI) has imposed a total fine of Rs30 lakh on Pinnacle Market Investment Advisory Pvt Ltd and Safe Trader Pvt Ltd for violating various rules and regulations. While Pinnacle Market Investment Advisory is fined Rs28 lakh for improper risk profiling, not complying with SEBI’s directions with respect to inspection, and unethical dealing of clients, Safe Trader was fined Rs2 lakh for providing illegal market advisory services.

In an order against Pinnacle Market Investment, SK Mohanty, whole time member (WTM) of SEBI says, “It has been held that Pinnacle and its directors have failed to inform SEBI about the appointment of Parul Sahu on its board of directors, performed improper risk profiling and does not have an appropriate process of risk profiling leading to the violation of provisions of investment advisor (IA) regulations, knowingly misrepresented the risk profile of the clients which has led to the violation of the provisions of PFUTP Regulations.”

The broker and its directors are also restrained from accessing market for three years.

In a separate order against Safe Traders, SV Murali Dhar Rao, executive director (ED) of SEBI, says, “Safe Traders have engaged in illegal activities related to unregistered investment adviser and have committed fraudulent acts and unfair trade practice, I find that the broker are liable for imposition of monetary penalty under Section 15HB of the SEBI Act, 1992.”

After finding that the broker provided investment advisory services without prior registration of SEBI, a show-cause notice was issued to Rajnandani Jalkhediya, proprietor of Safe Traders. Since she failed to reply to the notice, SEBI, after perusal of every transaction and evidence, imposed a fine of Rs2 lakh on her.

Safe Traders are further directed to return the amount of Rs39.64 lakh collected as fees for the investment advisory to its clients.