SEBI Bans Arjun Sharma of Commodity Raja from Markets for Running Illegal Investment Advisory
Moneylife Digital Team 15 February 2024
Market regulator Securities and Exchange Board of India (SEBI) has barred Arjun Sharma (noticee), proprietor of Commodity Raja for one year for providing illegal investment advisory services. While slapping a fine of Rs1 lakh, SEBI also asked him to refund Rs12.47 lakh collected as fees from clients or complainants.
In the order, G Ramar, chief general manager (CGM) of SEBI, says, "I find that total credit of Rs12.47 lakh in the Axis Bank account of the noticee was received by Mr Sharma as the fee for investment advisory services provided by him while acting as an investment adviser without obtaining a certificate of registration from SEBI."
SEBI received complaints via multiple e-mails against the website, citing apparent irregularities in the securities market. The website investigation by SEBI, which appeared to have been closed down as of 15 April 2023, observed that the website was used to provide investment advisory services.
SEBI, during its investigation, found that the website of the noticee was providing services such as crude oil success plan, base metal success plan, bullion strategy plan, natural gas strategy call, all MCX investment plan, crude oil big trader plan, Nifty & Bank Nifty futures and Nifty & Bank Nifty options. Further, as per the website of the Union ministry of corporate affairs (MCA), Commodity Raja did not appear in the list of companies or LLPs.
The know your customer (KYC) documents received from Axis Bank indicated that there have been numerous credit transactions in the account, primarily through UPI from multiple individuals. Specifically, there were 266 credit transactions totalling Rs12.47 lakh. Among these transactions, 10 amounting to Rs52,000 raised suspicions of receiving money for trading, advising, or engaging in activities related to the securities markets, SEBI says.
The market regulator further mentioned that Mr Sharma was providing advisory services through intraday calls to his clients. He offered these services through the website through various packages such as crude oil success plan and all MCX investment plan for a fee.
The CGM of SEBI also mentioned that Mr Sharma had not made any submissions to prove that these funds were earned from other sources of income. "Hence, I find that these services were being offered by the noticee for consideration. Therefore, I find that Mr Sharma was engaged in the business of providing investment advice to his clients for consideration and thus acted as an investment adviser."
Mr Sharma is also restrained from selling assets, properties, mutual funds, shares, and securities held by them in demat and physical form except for the sole purpose of making the refunds.
"Mr Sharma shall not undertake, either during or after the expiry of the period of restraint and prohibition, either directly or indirectly, investment advisory services or any activity in the securities market without obtaining a certificate of registration from SEBI as required under the securities laws," the market regulator says.
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