Sebi bans 8 entities for 10 yrs for cheating investors

Regulator Sebi today barred eight entities for 10 years for cheating investors through fake websites presenting themselves as registered market intermediaries.
The banned entities include Tradefast Securities, Goodtime Securities, Global Securities and Finosys Securities.
Besides, the restrictions have been imposed on Amit Gandhi, partner at Finosys; Asha Gandhi, one of the partners in Reliable; and Vaibhav Gandhi, partner of Finosys and Reliable.
The Securities and Exchange Board of India (Sebi) found that Finosys, Reliable, Goodtime and Global represented themselves as stock brokers, even though they are not registered with Sebi.
Besides, Finosys and Reliable were found to have issued fake contract notes to their clients. Further, Sebi noted that Goodtime and Tradefast used the broker registration details of another Sebi registered intermediary on their respective websites.

Also, Tradefast represented itself as a depository participant, as well as provider of advisory services and portfolio management services. However, it was not registered with the markets regulator.

Sebi Whole Time Member S Raman said "noticees claimed themselves as intermediaries registered with Sebi, though they were not registered with Sebi in any capacity. They misled and misrepresented investors by using false Sebi registration numbers of other registered intermediaries on their websites in order to mislead and misrepresent the investors to deal in securities".
"I note that they have misled the investors into believing that they are authorised to do activities of intermediaries, as stock brokers, portfolio managers, depository participant, etc. It is further evident from the bank account statements of some of the noticees that they wrongfully enticed the investors to entrust their funds and securities with them," he added.

By indulging in such activities, they have violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations by acting in a "fraudulent and deceitful" manner.
Accordingly, Sebi has prohibited these eight entities from dealing in the securities market for a period of 10 years. They have also been restrained from associating with any intermediary registered with the markets watchdog in any official capacity "till the expiry of 10 years".
Besides, they have been banned from collecting any fresh funds from their clients and other general investors.