Raids on illegal ‘investment advisers’ across Madhya Pradesh

BHOPAL: Madhya Pradesh STF and cyber cell carried out simultaneous raids on ‘unauthorised investment advisers’ across fours districts. These companies have had shareholders invest crores of rupees in the last few years and earned from ‘fees’ and ‘cuts’ from profits, said investigators.
STF officials said the proprietors of these companies were acting as investment advisers and research analysts in violation of Sebi directions.Some firms even using forged registration numbers of Sebi, say sources, while others had prior warnings from Sebi to stop these operations.
They have been barred from diverting any funds raised from investors, said sources. Two of these companies were asked to remove all advertisements, representations and brochures but to no avail.
SEBI had shared inputs regarding all erring ‘investment advisers’ with MPSTF.
These companies were giving trading tips, stock-specific recommendations among others to investors on payment of fees without registering with Sebi in any capacity, said an officer.
Officials have seized documents, hard disks and details of clients. This information would be shared with Income Tax and other agencies.
In June 2016, Sebi had cautioned public to deal with only registered investment advisers and research analysts for availing investment advisory services. These details are available on the Sebi website.
“The general public should be wary of trading in the securities markets, based on tips/recommendations provided by unregistered entity/person and should not get attracted or lured by such trading tips and stock specific recommendations received through Short Message Services (SMSs) or through any public media including websites or through any other social networking media," Sebi had said in its advisory.