VPS Advisory promises 20% assured return. Is SEBI on vigil?

The advisory firm asks people to share their username and password of demat account so that it can trade on behalf of them and give a 20% assured return.  Is the market regulator keeping an eye on such entities?

The Securities Exchange Board of India (SEBI) which bars even mutual funds from assuring returns seems clueless about promises and claims of investment advisors such as VPS Advisors. A marketing email from an advisory company known as VPS Advisory, promises 20% returns.
 

The company claims it has a technique of making 20% profit consistently. The marketing mailer, full of grammatical mistakes, even mentioned that it never makes a loss. It said, “Overall at any worst case we make profit and come out.” For this, you will need to open a trading and demat account through them or give your demat account, along with the username and password! Also, in order for them to manage your account, you are required to keep a minimum capital of Rs50,000 in either your trading account or Rs50,000 worth of equity in your demat account. It is not too hard to figure out the ramifications of allowing someone else control your trading and demat account especially when they know your username and password.

 


VPS Advisory also gives the answer about how it can manage to provide 20% assured return. It says, “because of group of people trading with us with huge money flow keeps us in profitable situation.” This claim even may make market gurus, like Warren Buffet, blush. ‘People with huge money’, however, is no guarantee that they would share their profit with someone like you.
 

The advisory targets savers who do not have money but want to make more money. Their email states: “This service is basically for those who have less capital to invest but want to make more money. Or for small investors who are looking for consistent return.”

“20% return service is perfect for small investors, fixed salaried people (who have limited salary and unlimited expenses) and EMIs, loans, for government employees, etc,” VPS Advisory mail adds.
 

It is pertinent to note that the company claims to be ‘pioneered’ by the graduates of the Indian Institutes of Management (IIM) and Indian Institutes of Technology (IIT).
 

The company has even posted screenshot of several costumers’ trading and demat account. The notion of leaving others to control your personal trading account is simply appalling. Here, you can see it by accessing this link: http://www.vpsadvisory.com/p/20return_9178.html.
 


 


 


This is not the first time we wrote about such firms big on ‘guarantees’ with promises of lavish and ‘assured’ returns. We had first exposed about the Stockguru scam, which promised investors 120% returns, way back in 2010 (), but regulators did nothing then. Fast forward to present and what has the regulator learnt? Instead, the Stock Guru duped investors to the extent of Rs1,500 crore! Back then, Stockguru was offering Rs22,000 on an investment of Rs10,000 in one year, and called itself investment advisors. Unfortunately, the lack of financial literacy and regulation meant investors fell for it. And lost money. The entire saga as exposed by Moneylife can be read here:
 

Very often there would be similar operators who would solicit stock market tips on mobile phones and claim more than 90% accuracy. For instance, a website CallOptionPutOption provides such trading tips ranging from stock options to Nifty Futures tips and Nifty Options tips. It claims over 200% profit per month. For this ‘plan’, capital of Rs10,000 is required and tips are provided with one target price and one stop-loss. Subscription to this scheme ranges from Rs3,000 to Rs30,000, depending on the plan you choose. There are many more that we had covered way back in 2011, and our piece can be accessed here:
 

Three years later, the scene hasn’t changed much. Is SEBI listening?
 

We had reported several similar companies and they can be accessed below:
 

Now MLM selling assured returns for kits on share trading! -- A write up on BSB Trading,
which promised dubious double your money in a matter of months.
 

From exchanges to MLM swindlers: Why are all of them so enamoured by forex trading?
 

Hyderabad-based Variety Consultancy promised 15% return on investment per month
for buying its forex and commodities training packages

 

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    COMMENTS

    R Balakrishnan

    6 years ago

    Another from the BAD city of HyderaBAD. Should tell you the story..

    ABHIK DE

    6 years ago

    CAN A BANK ACTING AS BROKER OF BANKASSURANCE SELL ULIPS WITHIN WEEKS OF ADVISING INVESTOR TO SURRENDER RUNNING ULIPS.AS PER IRDA GUIDELINE,NEW POLICY/POLICIES CANT BE SOLD FOR 3YRS.AFTER SURRENDERING/TERMINATING EXISTING POLICIES. NEW ULIPS SOLD /MIS-SOLD OF SAME SCHEME WITH 50% ALLOCATION CHARGES,1ST YR.FOR EG.IF THE PREMIUM IS 200000/-,ENTRY LOAD IS 1LAC.JUST TO EARN REVENUE!BANK BEING THE PORTFOLIO MANAGER/INVESTMENT ADVISOR.ANY COMMENT?

    REPLY

    ABHIK DE

    In Reply to ABHIK DE 6 years ago

    VIDE IRDA CODE FOR CORPORATE AGENT INFACT/REGULATION 9(1) OF IRDA REGULATION,2002 CODE OF CONDUCT FOR CORPORATE AGENTS.CAN TNE SAME BROKER OF BANK ASSURANCE SELL POLICIES,WHEN EXISTING POLICIES IN LAPSED STATE,BEFORE LOCKING PERIOD IS OVER?I.E.AFTER PAYING 2PREMIUMS/IN 2009.MIS-SOLD 5 NEW ULIPS,WHEN EXISTING 4 POLICIES WERE IN LAPSED STATE,WHICH SHOULD HAVE BEEN REVIVED FIRST.DONE ONLY TO EARN REVENUE,INCONNIVANCE BETWIN THE BANK AND THE INSURER.CLASSICAL MIS-SELLING.

    No Action To Rein In Toxic Products

    The Financial Conduct Authority of the UK has banned the sale of a set of ‘risky’ investments to all but the super rich. When will Indian regulators act?


    Ponzi and collective investment schemes (CIS) thrive all over the world because of powerful political backers. But a post-2008 shift in regulatory focus from caveat emptor (buyer beware) to vetting and restricting the sale of potentially harmful or toxic products is now turning the heat on these dubious schemes as well. The Financial Conduct Authority of the UK has banned the sale of a set of ‘risky’ investments to all but the super rich—people with an annual income of over £100,000 or investible funds of £250,000—from January 2014. The UK regulator classifies these as sophisticated investors who ought to understand the risks involved.

    Interestingly, the CIS targeted by the regulator are investment in overseas property, fine wines and traded-life settlements. Investors in the UK had invested over £4 billion in such unregulated schemes and their losses run into millions of pounds. Interestingly, it turns out that UK investors were still being sold teak farms and bamboo plantations.

    Unfortunately, the Indian situation is worse. Lakhs of people throughout India lost over Rs10,000 crore to plantation scams in the mid-1990s. Since then, there has been a string of high-profile failures, such as Citi Limouzine, SpeakAsia and Stock Guru, which raised Rs1,000 crore in a matter of months. Yet, our regulators and politicians refuse to initiate tough action. Dodgy companies, such as QNet and MMM India, are still luring the educated, but financially gullible, youngsters. More criminal is the refusal to rein in chain-marketing schemes, such as Saradha, MPS Greenery and Rose Valley, which have wreaked financial havoc among the low-income group in West Bengal and nearby states leading to 18 suicides so far. All these companies have enjoyed the patronage of powerful regional politicians.

    Last week, former Union secretary EAS Sarma wrote to the ministry of corporate affairs (MCA) exhorting it to work with the financial regulator to evolve a way of tracking shell companies which are used to launder black money through a complex web of entities. He pointed out that every major scam in India uses a network of shell companies to evade detection. But this, too, has gone on for decades. The most famous of these were the shell companies of the Reliance group, exposed by the Indian Express in the mid-1980s—a decade before India embarked on its economic liberalisation programme. Using layers of shell companies to launder money through overseas tax havens and back into the Indian stock market has increased exponentially since then.

    Consequently, we have no clear regulation, or legislation, to protect people from harmful and unregulated products. Only  a few large CIS manage to attract the attention of the market regulator.

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    COMMENTS

    Agyat Vyakti

    4 years ago

    Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

    gurupreet

    6 years ago

    Now Absconding Accused Vijay Easwaran disowns "QNET INDIA"

    These are experts taken from the interview of Absconding Accused Vijay Easwaran

    “QNET operates in India through a Franchise company hence Absconding Accused Vijay Easwaran has no involvement in it, he is neither a director nor a shareholder of Qnet India.

    He further threatened to seriously think of Pulling out of INDIA.”

    BOSS, you are talking of pulling out? YOU and YOUR SCAM will be KICKED out of my nation INDIA wait and see and this will not be the FIRST TIME that you are KICKED at your FAT A$$ and thrown out, will follow your SHAM company and expose it till you call it QUITS, the sooner you PULL OUT the better warna you know that saying “Badey Beaabroo ho kar terey dar sae nikley”

    So Mr. Absconding Accused Vijay Easwaran if you have a BRAIN to think of new new SCAMS there are people who can work together to EXPOSE your SCAMS...r u ready for it now….hahaha

    gurupreet

    6 years ago

    Fatwa against the nature of business in which QNET indulges…

    Some IR asked this question emphasizing again and again on the word “HALAL PRODUCTS” but the council answering this question sees through the EVIL DESIGN and pronounces this business of “NETWORK MARKETING USING WATCHES AND JEWELLERY AS HARAM”.

    Question: 20938
    Saudi Arabia
    I want to know about one business. Which is as following. Sir the business name is network marketing. The process is that I buy one product which is truely HALAL.e.g wathces, Jewellery etc. Aftre buying the product the company from where I bought the products asked me whether you want to become our business parter If I said Yes. Then I become the business partern of that company. And the money I paid to buy the product is my investment. Now if some more persons come to buy the product from this company through my refrece. Then company will give me commission let say 3% to 6% of each product. and the products are truely HALAL. And there is no cheating also. If I make the marketing of this company and asked the people to buy more product from this company then my i will get profit. If i stop then i will not getting anything. Please let me know whether this business is HALAL or not ... i shall be very thankfull to you if you email me this answer.
    Answer: 20938
    Mar 28,2010
    (Fatwa: 548/L=186/tl=1431)

    Network marketing involves cheating and invalid condition. Also, it involves earning profit by unlawful means; hence this business is unlawful according to Islam. It is not lawful to become a member of the company and receive profit.

    Allah (Subhana Wa Ta'ala) knows Best
    Darul Ifta,
    Darul Uloom Deoband

    The FATWA can be seen here http://darulifta-deoband.org/showuservie...


    gurupreet

    6 years ago

    Seminar of Illegal MLM/Money circulation/Binary Marketing Schemes on 20th of September 2013 at 3.30 Pm, Free entry, Please register A.S.A.P.

    Come on Friends a golden opportunity for us LIKE minded people to come together and share our thoughts and experiences regarding this menace being played in India on the name of MLM/Network marketing and what not. LETS MEET !! YES !!

    Saradha, Speak Asia, QNet, City Limouzine, StockGuru India, Sahara, MPS Greenery, NMart Retail… All these start as hot, new, investment opportunities and as alternative careers that offer high earnings and ways to escape the drudgery of 9-to-5 jobs. But, eventually, most of them fetch only small additional income and, worse, encourage you to lure and mislead your closest friends and relatives. You need to know how multi-level marketing (MLM) schemes and ponzis can destroy a large chunk of your savings or push you into debt. Understand the mechanics of these schemes, the laws that are applicable to them and why regulators fail to rein in dubious enterprises before they cheat thousands of people. Understand the basics of how to keep your money safe—the first step to smart investment! Collective investment schemes are not even under SEBI's regulation.

    Sucheta Dalal, founder trustee of Moneylife Foundation and Managing Editor of Moneylife magazine, is one of the best known financial journalists in India. She has worked with many of India's leading newspapers including Times of India, Indian Express, Economic Ti mes and Business Standard. She was awarded the Padma Shri in 2006 for her investigative journalism spanning over 25 years which included exposing the Harshad Mehta scam in 1992. Sucheta Dalal will be conducting this seminar.

    For registration please Contact:
    Seraphina / Komal
    at 022-49205000 or
    email [email protected]
    Log on to
    foundation.moneylife.in


    gurupreet

    6 years ago

    This video is so FUNNY, every one should watch it..will lighten up your day :)

    http://www.youtube.com/watch?v=UkuPGLEjv...

    Say thanks to creator James for doing this :)

    gurupreet

    6 years ago

    Thank you GUYS for providing the information of teams like Infinty, Solitaire, Faith etc which are active in India. I thank you for also providing us the names and contact details of the people behind these TEAMS.

    I request you all to please provide details of Systems and V-Cells which are still active, Please provide names of city, meeting place and details of individuals organizing these Systems and V-Cells.

    Please email all details on [email protected]

    Jai Hind
    Guru

    As usual all details you are providing will be kept confidential.

    gurupreet

    6 years ago

    ABSURD and STUPID Claims of Bio Disk as per so called “Inventor” and official trainer for “India”

    Point 10 is the most stupid one...which ones you think is the most IDIOTIC of them all?

    Please post in your comments :)

    1. Changes structure of water molecule and energizes water.

    2. Transfer of energy from bio disk to water.

    3. Changes taste of wine.

    4. Turns cheap whiskey into something similar to Johnny Walker.

    5. Drink twice as much whiskey and not get drunk.

    6. Plants grow faster.

    7. Turns fruits and vegetables YOUNGER.

    8. Changes characteristics of cosmetics.

    9. Fish will grow faster in bio disk water.

    10. Use petrol over Bio Disk, Car will go faster and quicker.

    11. Rub Cigarette on bio disk and cigarette , Helps reduce smoking and helps quality of life.

    12. Turns normal water to Zam Zam water.

    13. The inventors of the BioDisc claim that it energizes water or any other liquid to help treat migraines, stress, stroke, diabetes, insomnia, enhance the immune system, detoxify cells, increase shelf life of products among other benefits. It is a laundry list of indications that have no clinical proof.

    14. Prevents harm full effects of radiation.

    15. Helps cure Kidney Stone and dissolves it.

    16. Detoxifies the whole body.

    17. Helps cure rashes in 5-10 minutes

    18. Cures cuts and no scars left behind.

    19. Hair die will not give itchy feeling and color will send longer and deeper.

    20. Keep in fridge and everything stays FRESH longer.

    21. Turns OLD fridge into Bio-Fridge for free.

    22. Fresh orange juice will last 18 months.

    23. Milk will last a least 10 days instead of 3 days,

    24. Fresh vegetables will last more then one week.

    25. Normal tap water becomes similar to spring water.

    26. Bio Disk energy field can expand almost size of foot ball field.

    27. Breaks larger water molecules ofH2O into small small H2O.

    28. Helps in treatment of diabetes, Glucose levels will come down and energy will increase.

    29. Cell metabolism increases by drinking bio disk water.

    30. Bio Disk water absorbs 3-4 times more water then normal water.

    31. Seeds sprout in half the time.

    32. Common cold gets cured in 1 day instead of 10 days.

    33. Medical bills will come down.

    34. Bio Disk water results in whole body rejuvenation.

    35. Increases stamina.

    36. Helps in pain relief be it in joints of the legs, ulcer kind of stuff, pancreas, use for vision, for kidney etc

    Uff…I cant take this crap any more….what CRAP…CRAP... CRAP…CRAP...

    gurupreet

    6 years ago

    All these words or sentences means the SCAM called QNET…

    Listed below are some of the lines or words which mean nothing but QNET aka SCAM

    Owner at Global marketing project
    A Visionary at Global Marketing Project
    Retired at I am THE COMPANY
    e-Entrepreneur ! at Entrepreneur
    Co Founder at My Office My Health
    Global Marketing Projects at E- Enterprenuer
    Works at Self Employed and Loving It!
    Global Partner at Qnet
    Worked at I am unemployable
    Business Owner at Business Owner of a Global E-Franchise
    Worked at Qnet
    Past: THE V and QNET | Faith Egypt | Team Bring It

    Global Entrepreneur at QNET (Official)
    Past: InService Brotherhood Bootcamp
    Works at Achieving the Dream
    Chief Executive Officer at Unemployable
    Works at Retired
    Prosperity Consultant at Faith - Empowering You, Life & Business Coach, JPO Consultant, Networker at Tigers - Leveraging Vision andIndependent Consultant at QNET (Official)
    Past: Genpact
    Studies Leadership management style at Swiss E-learning Institute
    Former Partnership at QI intl
    Works at Self Employed and Loving It!
    Worked at Honkong Based Multi Billion Dollar Company
    Worked at Self-Employed (Business-Entrepreneur)
    Retired of a JOB at Social Entrepreneur
    Partner at ßusiness of Imp0rts & Exp0rts
    Owner at E-Entrepreneur
    Works at Qnet.net
    Chief Executive Officer at Briltime Corp


    If you see any of the above keywords on social media profiles of people trying to catch up with you ..just RUN RUN RUN :P

    Regards

    RAVINDRANATH

    6 years ago

    Good. But why wait till January 2014. Why not from immediate effect?

    NSE: Need to have a relook at turnover reporting

    Isn’t it time to report options turnover based on the premium and not on the notional contract?

    Futures and Options (F&O) segment in the stock exchange attracts huge volume of transactions. The turnover reported by the National Stock Exchange (NSE) on a daily basis is so high that it sounds too good to be true on any given day. Did you know that NSE reported a turnover of more than 2 lakh crore in its F&O segment on 20 June 2013? While it was one of the highest in recent times because of upheaval in the market yesterday, the fact is that the turnover did not happen for this amount in NSE in the F&O segment. Most of this turnover volume reported is notional. Let us look at the data to understand this.
     

    As per NSE website, on 20 June 2013, the F&O segment of NSE reported following turnover:
     


    The trade statistics clearly reflects that majority of the turnover was Index Option segment. In fact more than 80% of the transactions happened in the options segment including index and stock options. But this number has been reported as notional by the NSE. Now the question is—why is the word notional here? This needs to be understood as follows. Suppose you buy a single lot of call option on the Nifty with a strike price of 6,000 and pay a premium of Rs6 per lot size, the amount paid by you will be Rs300 only as the lot size of the NIFTY is 50, so the amount works out to be (Rs6 x lot size—fifty). So for a trader the amount is equal to premium* lot size*number of lots.
     

    But the exchange will treat this transaction differently and report differently as far as turnover reporting is concerned. The turnover in this case will be treated as (Strike price plus premium) * lot size. This means that in the previous case the transaction value will be 6,006*50 i.e. Rs3,00,300. So for a Rs300 position that was taken by a trader, the turnover reported was more than 1,000 times. While it may not be thousand times always, it is indeed substantially higher than the position taken by trader in options transactions.
     

    This method of recording turnover can be related to the Rs200 crore reported in case of Wing Commander CR Mohan Raj, who is fighting his case against Motilal Oswal Securities Ltd . The high turnover reported shows that that the investor needs to be filthy rich to transact for this kind of volume while the case is different practically. This is based on my assumption that Mr Raj took position in options transaction.
     

    While it is true that the payoff position of an investor in the options contract depends on the difference in the spot and strike price and strike and spot price in respective cases of call option and put option at the time of expiry, it does not make sense to report this turnover.  This can make sense to the exchange only if it levies charges from brokers based on the turnover. Inflated turnover means more revenue which is not the case now as NSE and SEBI (Securities and Exchange Board of India) both charge turnover fee based on the premium in options. Isn’t it time to report option’s turnover based on the premium and not on the notional contract?
     

    (Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)

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    COMMENTS

    Chandragupta Acharya

    6 years ago

    Does this 'notional' turnover get counted in the country's GDP figures?? Just curious to know....

    sachchidanand

    6 years ago

    If a MP cannot get justice , poor Investors will continue to be fleeced. SEBI is only aiding and supporting unscrupulous Brokers. It is high time that SEBI is penalised for such acts of negligence .

    sachchidanand

    6 years ago

    I agree absolutely to Vivek's prognosis. It is completely unjustified to report turnover in Options trading to 1000 times the actual transaction . It is a misstatement of liability of an Option trader. I am sure the real & correct exposure taken by a Option trader is the amount invested and not the fictional "value". Would SEBI intervene to correct this ? I have my own doubts about any proactive action by the Regulator. It appears that reporting such highly inflated turnover by Stock markets in India leads to a false reporting of factual reporting. Similar reporting in Commodities bourses is also wrong. It is high time that this big anomaly is immediately rectified

    Jose Koshy

    6 years ago

    The reason for recording turnover is because the Put/Call writers, need to maintain the margin as in Futures ie. 11 %. The Call/Put buyers pay just the premium. So notionally the Put/Call writers losses can be unlimited if the position goes against them. So if you see of the Rs 2 Lac turnover reported, notionally the Margin maintained would be approx. Rs 20 - 25 K ! As Derivatives is a hedging tool, that is being misused as a casino coin by most retail traders. That is the reason Derivatives is referred as the 'financial weapon of mass destruction' !. Sad on the Wing co's story but thats the way market unfortunately works (Mis selling products) and am sure Motilal Oswal would be well covered with their contracts & POA's !

    REPLY

    sachchidanand

    In Reply to Jose Koshy 6 years ago

    Not only Motilal Oswal but others also misuse the POA's. When Wing Commander insists that the POA is a forged document, there is an urgent need for SEBI to instruct all Brokers to CANCELL all POA's & obtain fresh POA 's , which will weed out all forged POA , as also protect those Investors who have been victims .

    sathyacumaran

    6 years ago

    mycase was similar in case of wing commander he was unaware of margin funding but in my case i was aware and i have given written letter to india infoline stock broking from the branch i was delaing requesting them to remove me from amrgin funding and also revocking my POA as well non issuance of DIS booklet none had been implemented and they have traded in F& O segment from 2006 till 2010 without my consent

    sathya cumaran
    9444021822

    REPLY

    sachchidanand

    In Reply to sathyacumaran 6 years ago

    The problem lies with Investors not insisting on zerox copies of the Account opening form from Brokers. SEBI must make it obligatory for Brokers to obtain confirmation from Investors that they have received zerox copies , after the Agreements have been executed by Brokers controlling Office. Best way for SEBI is to inspect the Records at Brokers office, whenever Investors complain about unauthorised trades. Currently grievances department of SEBI is so lethargic and careless that complaints lodged on SCORE are merely forwarded to Brokers , just like postman and Brokers have perfected the art of hoodwinking SEBI .

    sathyacumaran

    In Reply to sachchidanand 6 years ago

    even if we have the copies of the opening form what is earthly use i have opened an account and immedaitely when i came to know about margin funding i issued an letter requesting thme to remove from the branch where i was trading thorugh the same companies Relationship manager signed by the RM of the company with seal of the company till date no action by the company nor sebi nse bse now we have only option to go to media and channel and expose and create as one more stock scam but this would affect the indian investor

    sathyacumaran

    In Reply to sathyacumaran 6 years ago

    we can clearly state that sebi and nse bse officials are just puppets in the hands of stock brokers because their frequent visit to these offices the legal deaprtment of all broking house becomes the employees of the sebi nse bse and they visit sebi nse bse to igrc and no action is taken so we need justice who is other alternative help us

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