SEBI Bans Saurabh Verma from Markets for Providing Illegal Investment Advisory
Moneylife Digital Team 01 February 2024
Market regulator Securities and Exchange Board of India (SEBI) has barred Saurabh Verma (noticee) for two years for providing illegal investment advisory services. While slapping a fine of Rs2 lakh, SEBI also asked Mr Varma to refund Rs1.67 crore collected as fees from clients or investors.
 
In the order, G Ramar, chief general manager (CGM) of SEBI, says, “I find that total credit of Rs1.67 crore in the bank account of HDFC Bank of the noticee was received by the noticee as a fee for investment advisory services provided while acting as an investment adviser without obtaining a certificate of registration from SEBI. I find that Mr Verma, by acting as an investment adviser within the meaning of the Investment Advisory (IA) Regulations and without obtaining a certificate of registration from SEBI, has acted in total disregard to the requirements of the law and has violated Regulation 3(1) of the IA Regulations and Section 12(1) of the SEBI Act.”
 
SEBI received a complaint against Mr Varma alleging that he had taken monies from Haneet Kaur Munjal (complainant) for providing tips relating to stock trading and offering different types of plans to the complainant. Additionally, Ms Munjal mentioned that she paid a total amount of Rs2.45 lakh to the noticee on other dates in return for stock market-related services offered by Mr Verma.
 
SEBI, during its investigation, found that the bank account of Mr Verma had narrations such as monthly intraday tips, tips fees, equity-intraday, trading, premium stock future tips, tips payment, equity payment, intraday, advisory, higher plan 1, trade  pay, options,  barter research, trading fee, TPT-HNI, service, trading amount, trade amount, share advisor, educational fees, entry fee, tip money, option stock, trade, consultation, consultation and training, financial service, and service charges for stock advise. He was found involved in unregistered investment advisory activities without obtaining registration from SEBI.
 
Further, the account opening form (AOF) and know your customer (KYC) documents from HDFC Bank revealed that the account belonged to Mr Verma. The bank account statement had 2,678 credit entries amounting to Rs1.67 crore.
 
The CGM of SEBI also mentioned that Mr Verma 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 the consideration. Therefore, I find that Mr Varma was engaged in the business of providing investment advice to his clients for consideration and thus acted as an investment adviser.”
 
Mr Verma is also restrained from selling assets, properties, and mutual funds, shares, and securities held by them in demat and physical form except for the sole purpose of making the refunds.
 
“Mr Verma 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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