Market regulator Securities and Exchange Board of India (SEBI) has barred for two years Sunil Kumar Ray, proprietor of Trade Show Advisory for providing illegal investment advisory services. Mr Ray has also been slapped with a fine of Rs6 lakh and has been asked to refund Rs1.06 crore the money received from complainants, investors, and clients, as fees in respect of its unregistered investment advisory activities.
In the order, G Ramar, chief general manager (CGM) of SEBI, says, "I note that Mr Ray, by assuring guaranteed returns with respect to their investment advisory related plans and by knowingly publishing false and misleading information, defrauded the potential investors by inducing them to invest in the shares based on the advice of promising guaranteed returns and therefore, I find that Mr Ray has violated the provisions of Regulation 3 (b),(c) & (d),4(1) and4 (2)(k) of the PFUTP Regulations of the SEBI Act."
SEBI had concluded an investigation into Mr Ray for alleged violations of investment advisory and fraud regulations. The investigation stemmed from a complaint filed on 12 January 2023, alleging that the entity provided unregistered investment advisory services. The complaint included specific details such as Mr Ray's contact information, website, email ID and bank account details, enabling SEBI to pursue the case further.
During the examination, SEBI observed that Trade Show Advisory website made multiple references to being a registered investment adviser, including claims on the homepage and disclaimer section, such as Tradeshowadvisor.com is a registered investment adviser (IA). The privacy policy also referred to Trade Show Advisory (IA), and the website stated its mission to be a trusted global stock market adviser.
Additionally, subscription plans for various products like equity and Multi-Commodity Exchange of India Ltd (MCX) were offered under categories like normal, premium and HNI for durations of one to 12 months, with features such as daily or weekly intraday tips. These claims, along with repeated use of terms like ‘investment advisor' and 'stock market advisor', indicated that Mr Ray was falsely presenting himself as a registered IA, SEBI says.
SEBI's inquiry confirmed that Trade Show Advisory was not registered in any capacity, as required under law. Further examination revealed that Mr Ray had used his website to falsely claim that Trade Show Advisory was licensed to provide investment advisory services. Trade Show Advisory advertised subscription packages priced between Rs9,999 and Rs1.10 lakh, promising lucrative returns through equity, futures, and commodities trading advice.
The market regulator also found that Trade Show Advisory was registered under the Karnataka Shops and Commercial Establishments Act, 1961, as a stock market adviser but lacked the mandatory SEBI certification to act as an IA.
Moreover, Mr Ray misled investors by making guarantees of assured returns and recovery of losses, concealing the risks inherent in market investments, SEBI says, adding these claims violated regulatory norms and created a false sense of security among potential clients.
Further, the bank records reviewed during the investigation showed that Trade Show Advisory collected Rs1.06 crore from its clients as fees for unregistered advisory services. Mr Ray, during the proceedings, admitted to offering such services but claimed ignorance of the legal requirements. SEBI rejected this justification, emphasising that ignorance of the law (ignorantia juris non excusat) is not an acceptable defence.
SEBI investigation confirmed that Mr Ray and Trade Show Advisory had violated multiple provisions of SEBI regulations. Acting as IA without SEBI registration breached Section 12(1) of the SEBI Act and Regulation 3(1) of the Investment Advisers Regulations.
