Assured Returns: SEBI Suspends Sai Proficient Research's Investment Adviser Registration For One Year

The Securities and Exchange Board of India has suspended the certificate of registration of Sai Proficient Research Investment Advisory, proprietorship of Meeshika Vishwakarma, for one year after finding that it promised assured returns to clients in violation of securities market norms.

SEBI's Whole Time Member Amarjeet Singh passed the order in proceedings initiated against Vishwakarma, who is registered with SEBI as an Investment Adviser, pursuant to complaints alleging violations of securities market regulations.

The proceedings stemmed from an enquiry report submitted by SEBI's Designated Authority.

The allegations against Vishwakarma included failure to cooperate with SEBI, promising assured returns, receiving money through an unregistered entity, unfair dealing with clients, failure to resolve clients' complaints within prescribed timelines, and non-disclosure of change in registered office address.

The DA issued a show cause notice seeking an explanation, to which Vishwakarma submitted replies and attended hearings through her authorised representative. Upon inquiry, the DA concluded that violations were established and recommended cancellation of her registration.

SEBI then issued a post-enquiry notice, following which further submissions were made and a hearing was conducted.

In her defence, Vishwakarma argued that no assurance of profits was made, contending that her website carried disclaimers stating that investments are subject to market risks. SEBI, however, rejected the contention, observing:

“the fact that the website and the documents shared with the clients contained disclaimer as regards the investments being subject to market risk cannot justify the explicit promises of assured returns made by the Noticee. “

After examining the material on record, SEBI concluded that Vishwakarma had committed several violations of the regulatory framework. It found that she promised assured higher returns, received money from clients through a third party acting as a front, engaged in unfair dealings with clients, failed to resolve clients' complaints within the prescribed timelines, and did not disclose material information regarding the change in her registered office address.

However, SEBI declined to impose the most severe penalty. The Whole Time Member observed:

“However, | am of the view that the violations established against the Noticee do not call for the most severe action. “

SEBI noted that while 23 complaints were received on the SCORES platform, the findings on assured returns and unfair conduct were based on complaints of two clients.It was also recorded that its certificate of registration had become inactive due to non-payment of renewal fees

“Considering the totality of the circumstances, | am of the opinion that for the violations established, suspension of certificate of the Noticee for a period of one year would be apt and proportionate.” it held

Accordingly, SEBI suspended Vishwakarma's certificate of registration for one year. The regulator clarified that the order shall become operative from the date of renewal of her certificate of registration.