Investment advisory firm attempts to sell assured return product to Sebi official; slapped fine

Moreover, the employee informed the official that risk profiling of the client is being done by Sebi-Mumbai

New Delhi: Capital markets regulator Sebi has imposed a penalty of Rs 12 lakh on investment adviser Investment Visor for promising assured returns, making misleading claims on its website and mis-selling to clients.

Praveen Verma is the proprietor of Investment Visor.

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Incidentally, one of the employees of Investment Visor called up a Sebi official in the Indore Local Office and offered assured profit or return, the markets regulator said in its order passed on Monday.

During the call, the employee was informed that the daily average return being delivered or given by the calls of Investment Visor on the invested amount of the clients is around 20 per cent to 30 per cent, the order mentioned.

Moreover, the employee informed the official that risk profiling of the client is being done by Sebi-Mumbai.

Apart from these, other violations by Investment Visor include failure to resolve complaints received on SEBI Complaints Redress System (SCORES); collection of GST from clients even after cancellation of GST number; and selling multiple products/ services and charging unreasonable fees to clients.

Also, Investment Visor employed persons who did not possess qualification and certification as required under the Investment Adviser (IA) Regulation and failed to do risk profiling of clients and suitability assessment in terms of the IA Regulations.

By indulging in such activities, Investment Visor violated the provisions of IA rules and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms and accordingly, Sebi levied a fine of Rs 12 lakh on the investment advisory firm.

Also, Sebi asked Investment Visor to resolve all complaints pending against it in the SCORES portal, by way of refund of fees charged or by way of settling the transaction in dispute within 30 days.

The order came after the Securities and Exchange Board of India (Sebi) conducted an inspection of the Investment Visor to verify whether the books of accounts, records and other documents were being maintained by it. The regulator initiated proceedings against the firm and issued show cause notice (SCN) in November 2022.