Sebi bans Equicom Financial, directors from providing investment advisory services

Markets regulator Sebi has barred Equicom Financial Research and its two directors from acting as an investment advisors for luring innocent investors by making assured profit commitment and presenting misleading information to clients. Besides, they have been barred from capital markets, the Securities and Exchange Board of India (Sebi) said in an order.

After receiving several investors’ complaints, Sebi conducted an examination in relation to the affairs of Equicom. This is registered as an Investment Adviser (IA) with effect from April 25, 2014 and, Amit Kukda and Akhilesh Raghuvanshi are the two directors of Equicom through whom the company functions.

The probe found that Equicom was involved in luring the innocent investors by making assured profit commitments; extracted more and more money from the clients by offering more and more services; presented misleading information to clients to influence their decision to invest, took advance payments for services and made false commitment of profits to their client for extracting more payments from the clients among others.

“The adoption of such practices are nothing but contrivance/device/deceit for manipulatively forcing the clients to deal with the IA. Thus, Equicom has prima facie violated …the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations,” the regulator said in an order passed on Tuesday.

Besides, Sebi noted that Equicom has failed to abide by the code of conduct while carrying out its activities as an investment adviser and therefore violated Investment Advisers Regulations. The regulator said Kukda and Raghuvanshi being the directors of Equicom are prima facie responsible for the violations committed by the company.

Consequently, Sebi has directed Equicom and its two directors to “cease and desist” from acting as an investment advisor including the activity of acting and representing through any media (physical or digital) as an investment advisor, directly or indirectly until further orders.

In addition, they have asked “not to access the securities market and buy, sell or otherwise deal in securities in any manner whatsoever, directly or indirectly, until further orders”. Further, they have been restrained from diverting any funds raised from investors.

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