SEBI bans owners of securities markets for unauthorized investment advice, redefining profit

Capital markets regulator SEBI on Tuesday restrained Profit Redefine Financial Solutions and its owner Sanjay Yadav from acting as investment advisors for providing unauthorized trading tips and stock recommendations to investors. In addition, he has been barred from entering the securities market for six months. The order comes from an interim order-cum-show cause notice passed by SEBI on February 7, 2020 against Profit Redefin Financial Solution (PRFS), its sole proprietor Sanjay Yadav and other entities. In its interim order, SEBI said that PRFS services in the securities market and investment advisory schemes issued by the notice were prima facie found to be fraudulent and unregistered investment advisory activity.

The regulator also said, the notice has already been withheld from reaching the securities market through an interim order. In its final order, the regulator observed that PRFS and Yadav were engaged in the business of providing investment advice to the public in return for consideration and, thus, acting as an ‘investment advisor’. However, he did not have any certificate of registration from SEBI to act as an investment advisor (IA), the regulator said. A prima facie amount of Rs 1.56 crore was collected by PRFS and its owner Sanjay Yadav for the period from June 2016 to May 2019. Through such acts, he violated the IA norms and the provisions of PFUTP (Prohibition of Frauds). unfair trade practice) rules, it added.

Profit redefine and Yadav are collectively called notice. SEBI in its order has directed investors to refund the money received by way of fees in respect of their unregistered advisory activities within three months. They shall be prohibited from entering and dealing in securities market by any means, directly or indirectly, for a period of six months from the date of this order or till the expiry of six months from the date of completion of refund to the investors … whichever is later. prevented from doing so. Further, they have been barred from selling their properties, securities and mutual fund holdings except for the sole purpose of making refunds.