Securities Exchange Board of India (SEBI): S.K. Mohanty, Whole Time Member while affirming an ex-parte interim order of SEBI, was of the view that the activities of the Noticees, Billionaire Solutions Pvt. Ltd. (Sole proprietor Akash Jaiswal) was covered within the definition of “fraud” defined under regulation 2(1)(c) of the PFUTP Regulations, 2003. And therefore was held liable for the violation of provisions of Section 12A (a), (b), (c) of the SEBI Act, 1992, Regulations 3 (b), (c) & (d), 4(1), 4(2)(k) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations, 2003).
The pertinent matter originated from an ex-parte interim order by SEBI, where it found the activities of the Noticees fraudulent and manipulative and in violation of the provisions of Section 12A (a), (b) & (c) of the SEBI Act, 1992 and Regulations 3 (b), (c) & (d) and Regulations 4(1) and 4(2)(k) of the PFUTP Regulations, 2003. The order read:
“The Noticees shall cease and desist from acting as an investment, the securities market and to remove and withdraw all advertisements. unregistered investment advisors like the Noticees in the present case can put the interest of the investors at great risk by misleading them or misutilising their funds to the detriment of the interest of the investors”.
Factually, the Noticees wer hosting a website, where it advertised itself as one of the best Stock Advisory of India, offering recommendations in Stock Cash, Stock Future and Stock Options. The website mentioned, “We provide online trading, NSE and BSE Trading Tips, MCX, NCDEX and intraday tips for investors, traders and portfolio personnel”. Ironically, the claims for an investment advisor were made without a certificate of registration. Now the question that the Tribunal had to ponder on, was whether the acts of the Noticees as imputed in the interim order, had violated the provisions of SEBI Act, 1992 read with the IA Regulations, 2013 and the PFUTP Regulations, 2003.
The Tribunal while affirming the interim order, was of the opinion that, “Under the circumstances, I observe that the principles of natural justice have been complied with adequately in the present matter, and as the Noticees have preferred to not participate in the present proceedings before me, I am constrained to deal with the matter on merit based on the material available on record”. Furthermore, stated, “The claims/representations made by the Noticees on their website were blatantly misleading and were made only to allure the investors to avail investment advisory services being offered by the Noticees. The Noticees have knowingly misrepresented on the websites floated by them that they are experts in stock market analysis and are experienced in investment advisory and without even holding any registered Investment Advisor certificate, the Noticees offered their investment advisory services through their website, in an illegal manner to investors, with the objective of raising money from the investors by way of subscriptions to their various plans”.
Thus, the Tribunal restrained the Noticees from associating with any company, restricted from the securities market for 2 years, and debarred from undertaking any investment advisory services both directly and indirectly amongst other things.[Final Order in Billionaire Solutions, sole Proprietor Akash Jaiswal, re,WTM/SM/WRO/WRO/14717/2021-22, decided on 12-01-2022]