Markets regulator Sebi today ordered Indian Stock Tips and its partners to return the money received from clients as fees in respect of unregistered investment advisory as well as research analyst activities.
Besides, the company and its partners have been barred from the securities markets as well as from associating with any listed firm for at least four years, the Securities and Exchange Board of India (Sebi) said in an order.
The regulator found that the company was giving trading tips and stock specific recommendations to investors on payment of fees.
It was carrying out investment advisory activities and research analyst services without obtaining registration from Sebi. By indulging in such activities, it has violated the provisions of Sebi Investment Advisers and Research Analyst norms.
The company has collected over Rs 17.42 lakh between April 2015 and February 2016 from its unregistered services.
"It would be reasonable that such funds collected in any name are liable to be returned to the clients," Sebi Whole Time Member Madhabi Puri Buch said.
Accordingly, Sebi has asked the company and its partners - Girish Srichand Valecha, Nagma Hussain Ahmed Ansari - to refund the money received from the clients and submit a report in this regard within a period of three months.
They have been prohibited from accessing the securities market "till the expiry of four years from the date of refund of the money".
Further, they have been restrained from "associating with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with Sebi till the expiry of four years from the date of refund of the money".
The firm and its partners "shall not undertake, either directly or indirectly, investment advisory services or research analyst services or any activity in the securities market without obtaining a certificate of registration from Sebi...after the expiry of period of debarment".
In case they fail to comply with the order, Sebi, on expiry of three months, would recover such amount in accordance with the provisions of securities law.
Further, Sebi said that the ban imposed against Indira Trading Company and its partners from acting as investment advisers will continue "till further orders".
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