SEBI Censures 'stockbenifits.com' Operator Over Assured 18-20% Return Claims

The Securities and Exchange Board of India (SEBI) has issued a regulatory censure against the operator of 'stockbenefits.com' after finding that relationship managers associated with the website assured prospective clients of “18-20%” profits and that the research analyst failed to cooperate during a regulatory inspection.

SEBI Quasi-Judicial Authority Biju S. passed the order.

“The RMs of the Noticee were clearly trying to influence the decision of the investors by assuring them guaranteed returns,” the order noted.

SEBI conducted a surprise onsite inspection of research analyst Amit Guruh Sachdeva, who operated through the website stockbenifits dot com, on March 14 and 15, 2024 for the period between April 1, 2022 and February 29, 2024.

The regulator found that employees associated with the website “www.stockbenifits.com” had “often offered '18-20%' profit” while speaking to clients over calls. The order noted that the phrase repeatedly used during the calls was “try karte hai 18-20% profit nikal ke de sake”.

“Such specific profit percentages create clear and quantifiable expectation as opposed to vague statements,” the order stated.

SEBI held that the statements pertaining to “18-20%” profit constituted “mis-selling and misrepresentation” since “investments in securities market are subject to market risks.”

Sachdeva had argued that the statements were made by relationship managers without his authorization and in violation of internal training manuals. However, SEBI rejected the defence and held that the relationship managers acted on behalf of the registered intermediary.

“Therefore, the argument of the Noticee that he cannot be held liable for the acts of the RMs does not merit consideration,” the order stated.

The regulator also upheld allegations that Sachdeva failed to cooperate during the inspection by delaying his meeting with the inspection team and by deletion of data from an email account linked to the business.

SEBI noted that Sachdeva had attributed the deletion of emails from “stockbenefits80@gmail.com” to a “technical glitch”, but held that “no supporting evidence was produced” in support of the contention.

“Therefore, this contention of the Noticee appears to be an afterthought and accordingly, found bereft of any merit,” the order stated.

The Designated Authority had recommended issuance of regulatory censure and a two-month restriction on onboarding new clients. However, SEBI declined to prohibit Sachdeva from taking new clients, noting that he had already paid a monetary penalty of Rs. 2 lakh in separate adjudication proceedings arising from the same inspection period.

“In the facts and circumstances of the case, I am of the view that issuance of a regulatory censure to the Noticee would be commensurate and proportionate to the violations established in the present case,” the order stated.

Accordingly, SEBI issued a regulatory censure against Sachdeva for violating provisions of the SEBI (Research Analyst) Regulations, 2014 and the PFUTP Regulations.