SEBI Bars Yash Trading Academy Proprietor For 2 Years For Unregistered Investment Advisory, PMS

The Securities and Exchange Board of India has barred Yash Garg, proprietor of Yash Trading Academy, from the securities market for two years and directed him to refund Rs 92.98 lakh collected from investors. The action was taken for carrying out unregistered investment advisory and portfolio management services while luring investors with false claims of assured returns.

The order was passed by SEBI quasi-judicial authority N. Murugan.

“The act of the Noticee and the course of business adopted by him was to knowingly conceal material information in a deceptive manner with an intent to influence the clients to avail its unregistered investment advisory and portfolio management services and to deal in securities market. In view of the same, I find that the conduct of the Noticee constitutes 'fraud under the PFUTP Regulations. Therefore, I note that the Noticee was also involved in mis-selling of services to its clients by making false and misleading claims.,” the order observed.

SEBI said it had received a complaint alleging that Garg was running “Yash Trading Academy” and falsely claiming it to be a SEBI-registered intermediary while offering unregistered services such as investment calls and demat account handling. Based on the complaint, the regulator examined his social media platforms and bank accounts.

The regulator found that Garg was offering various paid packages through multiple Telegram channels under the names 'Yash Trading Academy' and 'YTA'. Analysis of bank accounts showed credit entries linked to trading tips and profit-sharing arrangements, indicating that the activities were in the nature of investment advisory and portfolio management services provided for consideration without registration.

A show cause notice was issued alleging unregistered advisory and portfolio management services, along with false and misleading representations, including claims of guaranteed returns and portraying himself as a SEBI-registered entity. Despite being given an opportunity to respond and appear for a hearing, Garg neither filed a reply nor appeared, prompting SEBI to proceed on the basis of available material.

SEBI noted that the mobile number linked to Garg appeared across the Telegram channels and, based on screenshots submitted by the complainant, concluded that the channels were operated by him.

Holding him responsible for the activities carried out in the name of the proprietorship, SEBI found that he was providing trading tips and account handling services, which amounted to portfolio management involving handling of clients' funds and securities.

“Therefore, I find that the Noticee was not registered with SEBI in the capacity of Investment Adviser and/or Portfolio manager while acting as investment adviser as well as portfolio manager as defined under the IA Regulations and PMS Regulations respectively.” the order said.

On the issue of fees collected, SEBI found that Garg had received ₹92.98 lakh from investors for providing such unregistered services.

The regulator also found that Garg had made claims of high profits and offered unrealistic and assured returns despite being aware that such returns are subject to market risks.

“Thus, I find that the Noticee was offering unrealistic and assured returns to the investors through its Telegram channels in-spite of being fully aware of the fact that the investment advice related to investments in stocks/derivatives, commodity derivatives, etc. are subject to market risk and such returns cannot be guaranteed.” it held.

Accordingly, SEBI directed Garg to refund the monies collected from investors, restrained him from undertaking investment advisory or portfolio management activities without registration, and debarred him from accessing the securities market and dealing in securities for five years.

The regulator also imposed penalties aggregating Rs 16 lakh on him, including Rs 10 lakh under Section 15EB, Rs 3 lakh under Section 15HA and Rs 3 lakh under Section 15HB of the SEBI Act.