Sebi bans 2 individuals from mkts for providing unregistered advisory services

Sebi today banned two individuals from securities market for three years for providing investment advisory services without obtaining registration from the markets regulator.

Besides, the regulator has directed the individuals -- Mansoor Khanda and Firoz Khanda -- to disgorge the unlawful gains (Rs 3.84 crore) along with the interest (Rs 1.20 crore) as determined by it in an earlier order, within 45 days.

According to a Sebi order, the individuals had provided 'investment advice' to their clients in the securities market through WhatsApp messages and websites from April 2013 to June 2014, for a consideration and promised guaranteed returns on investments.

During that period, Mansoor and Firoz Khanda were not registered as 'investment advisers' with the Securities and Exchange Board of India (Sebi).

Investment advisers regulations mandate that a person shall hold a certificate of registration from Sebi in order to be associated with the securities market as an 'investment adviser'.

The collection of consideration coupled with the promise of 'fast money with low risk in a short period of time' or guaranteed returns on investments in the securities market as made by Mansoor and Firoz Khanda to their clients, was incorrect and deceitful, Sebi said.

It resulted in 'fraud' as defined under the PFUTP (Prohibition of fraudulent and unfair trade practices relating to securities market) Regulations being committed by the individuals, which in turn affected the interests of investors in the securities market, as per the order.

"Mansoor Khanda and Firoz Khanda are also directed not to dispose of or alienate any of their assets/ properties/ securities, till such time the direction of this order are complied with," Sebi said.

In case, the individuals fail to pay the unlawful gains along with interest, the regulator would initiate recovery process against them.

Through an interim order passed in June 2014, Sebi had directed both the individuals to "cease and desist" from acting as investment advisors and not solicit any other unregistered activity in the securities market after finding that they were engaged in providing investment advisory services upon receipt of requisite fees from investors without obtaining registration from the regulator.

The directions contained in the interim order were then confirmed through another ruling in September 2014.