This MLM openly flouts SEBI norms and offers 120% returns in a year through stock market investment!
Moneylife Digital Team 27 December 2010

Stockguru.India and its group companies are self-styled investment advisors, offering Rs22,000 on an investment of Rs10,000 in one year

As if there were not enough potholes on the stock market route, here is a multi-level marketing (MLM) company that is promising 20% returns per month! The company Stockguru.India describes itself as the country's 'Premier Financial Consultancy', offering trading solutions in equity, derivatives, currency futures, commodities trading, initial public offerings (IPOs), insurance (life/non-life), general insurance, mutual funds, portfolio management services, terminal handling all under one roof. (the company's portal) has only one standard line of advice in all market situations-whether it is a bull market or a bear market, range-bound market or volatile market. It says, "We advise our clients to buy shares at a low price and sell them at a higher price. Selecting the right share at the right price and entering the capital market at the right time is an art. We help all our clients to make huge profits by investing in good shares for very short/short/medium/long term depending upon the client's requirements. Trading/investment for minimum intraday to T+5 days may give you a handsome return of 5% to 25% on your capital investment."

This MLM company's investment (!) plan is simple. You pay a minimum Rs10,000 as investment and Rs1,000 as registration fees. There is no limit on the maximum amount one can invest. offers a return of 20% per month for up to six months and the principal amount invested is returned in the next six months. It also gives post-dated cheques of the principal and a promissory note as security. In short, on an investment of Rs11,000, the company offers to pay you Rs12,000 in six months and the rest Rs10,000 over the next six months, a total of Rs22,000 or a 120% return in a year.

So how does offer such a high return where even leading investors like Rakesh Jhunjhunwala found it very hard to earn even 20% return from the stock markets? Here is the company's logic..."If you have gained Rs1,000 somebody has lost Rs1,000. If you have lost Rs1,000 somebody has gained Rs1,000. Most of the people you meet say (around 90%) that we have lost a lot of money in the financial markets. But that means around 90% people you do not know have made huge profits. For every seller there is a buyer."

If this sounds to be too good to be true, it lures investors with an additional 3% per month income through a binary plan of 27 levels. Binary plans of MLM companies are the new clients you bring in, who are placed below you in rank in a right and left combination. It's nothing but a trap. All MLM companies promise say you rewards if you complete the left leg-right leg cycle. But in practice this does not happen. There are very few people who manage to do this in a proper way. A majority of those participating fall in the category where they lack a single member in one leg, or a member becomes inactive thus freezing the spread of that leg and the business.

How do MLM companies operate without a trading license from the regulators, the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI)? Why has there been no action against Stockguru.India, and its subsidiaries? Market regulator SEBI had, on its part, issued SEBI (Investment Advisers) Regulations, 2007 (the 'Draft Regulations') to regulate the advisory activities of investment advisers in India. But till date it has remained a draft only.

According to R Balakrishnan, a columnist for Moneylife, India probably is the only market in the world where a distributor needs to pass an exam, but absolutely no qualifications are required for someone to become a fund manager. The same is applicable for investment advisors as well. As a result, there are a number of 'self-styled investment advisors', including wealth managers, private bankers, chartered accountants and even some MLM companies like Stockguru.India.  

According to the SEBI Act 1992, "No stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with the securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act."
In addition, the Act says, "No person shall sponsor or cause to be sponsored or carry on or caused to be carried on any venture capital funds or collective investment scheme (CIS) including mutual funds, unless he obtains a certificate of registration from the Board in accordance with the regulations."

Stockguru.India and all its group companies are openly flouting the norms and rules. It is not registered with SEBI as investment adviser and still offers to trade on behalf of its clients. According to information available over the internet, Stockguru.India and its chairman and managing director Lokeshwar Dev, will help anyone to open a demat account with Sharekhan so that they can manage the investor's money. We checked with Sharekhan and the brokerage said, neither Stockguru.India nor Lokeshwar Dev have any relations with or any demat account with them.

In addition, neither Stockguru.India nor any of its group companies possess a certificate of registration from SEBI for CIS, but they are still collecting huge amounts from clients under the pretext of stock market investment. Are the regulators sleeping on this one?

2 years ago
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Mohamedkutty KP
4 years ago
Malayalam translation is very bad...
Rakesh Ranjan
7 years ago
Well... People who are not making effort, complain such things. People who have habit of finding fault will never see good things. We have lost our vision. Everyone wants easy money. I would only say, people who complain are not making seriously effort. I am in business and I make good amount of money. I have already recovered what I had invested. I would only say, stop complaining and start working. You yourself will find the change.
1 decade ago
All that SEBI can do is to make hard Law against Mutual Fund Agents IFA. who do their job Honestly.Nothing more than that SEBI can do....Shame on SEBI.India mei Brahctachar ke liye bohut jagah hai lekin Imandari Honesty ke liye koi jagah nahi
sanjay giri
1 decade ago
1 decade ago
after suicide of stock guru india's clients , the law book is read by govt. official, and not before 5 yrs when it was lunched. neither a single govt. official had inspected the office nor the govt of haryan a, delhi made obligation for giving certificate.
1 decade ago
I have invested money in SGI. Let me be true, what is the function of govt. and RBI; tax your income and put it in pocket of richest like Anil, Mukesh, Tata and so on. (Check their wealth on forbes with tax holiday they enjoy.) Listen to 'Robert Kiyosaki'; if you still dream govt. or SEBI etc to save you. They are here to take your money legally. If this is wrong, are aware about meetings by bigshots(so called investment firms) to manipulate price everyday before market opens? Have your mutual fund manager shown you, how much they have earned and manipulated and what a miserable piece of profit thrown to you? There are manipulators who earn 20% daily(40% on FOREX - ofcourse not on USD~INR - which is only legal). Every share can go up to max 20% up or down in a day, and you say 20% per month is impossible? Think again, how FII make our market dance,huh!
1 decade ago
Hi, so it mean the company is fraud....? then how they can show the legal documents on their website...? like PAN/TAN no's etc..,.? plz tell us details bcz m investing 3 lakh rupees...? so should i avoid to invest..,? 8983185152
Replied to Jeeshanali comment 1 decade ago
bhai, showing PAN/TAN does not allow one to collect money from anyone. What eh company is doing is collecting money, then circulating it at the top and then leaving you alone without any money. Dont invest.
1 decade ago
Thank you for promptly removing the ad.
Nagesh KiniFCA
1 decade ago
A smart cookie from Citibank Gurgaon pulls an exteremely fast one on not less than 20 HNI - don't tell me they were so docile and not extremely greedy - to commit as much as Rs.400 crores.
This guy was smart enough to forge both SEBI and bank's own internal circulars!
Goes to validate - "Duniya Jukti hain, Jhookanewala chayehe".
The Yanks boast of foolproof systems, operating procedures and what not, but it took a smart desi to circumvent all of them for long.
What happens to audits, inspections and K(Kick)YCs?
1 decade ago
How can you allow ads in your comments section -especially if that ad is for the very person / firm you are castigating in your article.
1 decade ago
Nagesh KiniFCA
1 decade ago
It is in deed a sad commentary on our so-called Regulatory oversight.
If Stockguru can operate so blatantly flouting Sharekhan name who deny any relations. It will not take it long to go the Harshad Mehta/Ketan Parekh/CR Bansali way dragging many greedy gullibles.
It is rightly said "Duniya Jhukti hai, jhukanewalla chayehe" ! Enter Stockguru.
Nitin Gupta
1 decade ago
Is SEBI sleeping ? Double your money in 12 months.
Replied to Nitin Gupta comment 1 decade ago
What SEBI its always sleeping..

This idiot nation only allowing all fraud company's. Can this kind of fraud MLM company having the power to do this fraud with other nation...

Idiot indian goverment only allow all kind of business in this market , becaus of this only some middle and poor people coming for fraudlent.

1 decade ago
Here is one more example of someone openly offering portfolio management service without sebi registration:
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