Market regulator Securities and Exchange Board of India (SEBI) has reaffirmed a penalty of ₹5 lakh on Mohit Gupta, proprietor of Safe Trading, after reconsidering the matter pursuant to an order of the securities appellate tribunal (SAT). While SAT had remanded the case only on the issue of the penalty imposed under Section 15HA of the SEBI Act, SEBI has decided to retain the minimum statutory penalty, observing that Mr Gupta indulged in fraudulent and unfair trade practices and failed to comply with earlier directions to refund investors.
The latest
order stems from SEBI's earlier order dated 27 March 2025, which found that Mohit Gupta was operating as an unregistered investment adviser through Safe Trading without obtaining the mandatory registration from the market regulator.
SEBI had also held that he fraudulently collected money from investors by promising guaranteed returns, thereby violating the provisions of the SEBI Act, the Investment Advisers Regulations, and the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.
In the original order, SEBI had directed Gupta to refund ₹23.94 lakh collected from investors, barred him from accessing the securities market for one year or until the refund process was completed, whichever was later, and imposed penalties of ₹5 lakh under Section 15HA and ₹1 lakh under Section 15EB of the SEBI Act.
Mr Gupta challenged only the ₹5 lakh penalty under Section 15HA before SAT. In its order dated 21 August 2025, SAT upheld SEBI's directions requiring him to refund ₹23.94 lakh and pay the ₹1 lakh penalty under Section 15EB but remitted the matter back to SEBI solely to reconsider the penalty imposed under Section 15HA after granting him an opportunity of hearing.
During the fresh proceedings, Mr Gupta argued that SEBI had issued warning letters in several similar cases involving unregistered investment advisers and had not invoked Section 15HA in many other matters. He also pleaded that he was young, lacked formal education and was unaware of the regulatory requirements, and therefore sought a warning or a lesser penalty on the grounds of proportionality and parity.
Rejecting these submissions, SEBI held that ignorance of the law cannot be accepted as a defence and observed that each enforcement action depends on the specific facts of a case. The regulator also referred to a recent Supreme Court judgment reiterating that an entity cannot seek ‘negative equality’ by relying on alleged leniency shown in other cases to justify its own violations.
SEBI further noted that Mr Gupta had still not complied with its earlier direction to refund investors. Although he claimed to have issued a public notice offering refunds and was advised to open an escrow account for depositing the refundable amount, he failed to do so. The regulator observed that such non-compliance could have justified a higher penalty but decided to impose only the minimum penalty prescribed under the law.
Referring to recent Supreme Court rulings, SEBI said statutory minimum penalties cannot ordinarily be substituted with warnings or reduced below the prescribed threshold merely on equitable grounds. It concluded that MrGupta remained liable for violating the PFUTP Regulations and that the minimum penalty of ₹5 lakh under Section 15HA was appropriate in the facts of the case.
Accordingly, SEBI has directed Mohit Gupta to pay the ₹5 lakh penalty within 45 days through its online payment mechanism. The order, which comes into effect immediately, has also been forwarded to stock exchanges, banks, depositories and mutual fund registrars to ensure compliance with the directions.
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