Capital Target Advisory Services, Capital Target Financials, and two individuals have been banned by capital markets regulator Sebi for providing unauthorised investment tips and stock recommendations to investors.
Besides, they have been restrained from accessing the securities markets for six months.
After receiving a complaint, Securities and Exchange Board of India (Sebi) carried out a preliminary examination to ascertain whether unregistered investment advisory activities are being carried out by the entities.
Thereafter, a show-cause notice dated July 19, 2021, was issued by Sebi against Capital Target Advisory Services, its sole proprietor C Paranitharan, Capital Target Financials and its partner C Murlitharan.
Capital Target Financials is a partnership firm and Paranitharan and Murlitharan are the partners of the firm.
In its show-cause notice, Sebi said entities prima facie found engaged in investment advisory services without obtaining a certificate of registration from the market watchdog as mandated under the IA (Investment Advisors) regulations.
The amount of money, prima facie, observed to have been collected by entities was Rs 11.58 lakh for the period from October 2013 to January 2019.
"The regulator found that the misrepresentations made by the entities without holding a mandatory certificate of registration from Sebi to act as an investment adviser are in violation of IA rules," Sebi said in its final order passed on Tuesday.
Further, Sebi has directed the entities to refund, within three months, the money received from the investors in respect to their unregistered investment advisory activities.
They have been restrained from accessing as well as dealing in the securities market for six months from the date of this order or till the expiry of six months from the date of completion of refunds to investors...whichever is later.
In addition, they have been prevented from selling their properties, securities and mutual funds holding except for the sole purpose of making the refunds.
In another order, the markets regulator barred Sublime Financial Advisory and its proprietor Rahul Tayal from the capital markets for carrying out investment advisory activities without obtaining requisite registration mandated under IA regulations.
Sebi received a reference from Reserve Bank of India (RBI) against Sublime Financial Advisory to which an examination was conducted by market watchdog.
Pursuant to examination, the regulator noted that the noticee had not obtained registration from Sebi and was offering investment advisory services through its website.
Thereafter, a show-cause notice, dated September 09, 2021, was issued by Sebi against Sublime and its sole proprietor Tayal.
Sublime Financial Advisory and Rahul Tayal are collectively referred to as noticee.
The amount of money to have been collected by the noticee was Rs 1.05 crore during the period from December 2015 to October 2020.
