Sebi bans an individual for promising assured returns to clients

The regulator, prima facie, found that FI was promised assured returns on the investment made by the clients and lured them to avail its services. Further, Sebi said FI was unfair in its dealings with clients and didn't give all the information about its fees to clients upfront.

Markets regulator Sebi has barred Future Investment proprietor Pinky Kelva for promising assured returns to clients and forcing them to pay larger sum after their enrolment. The ban will continue until further orders, the Securities and Exchange Board of India (Sebi) said in an interim order on Tuesday.

The order comes after Sebi received a number of complaints against Future Investment (FI). Pursuant to this, the regulator carried out a probe in relation to the affairs of FI and examined the information provided by complainants in the form of WhatsApp conversations, SMS and e-mails. Besides, call recordings were also analysed.

FI is a Sebi-registered investment adviser offering packages, including equity, equity futures and options, base metal and energy, forex -- domestic or international, to its clients. The regulator, prima facie, found that FI was promised assured returns on the investment made by the clients and lured them to avail its services.

Further, Sebi said FI was unfair in its dealings with clients and didn't give all the information about its fees to clients upfront. Instead, it is prima facie observed that FI was enrolling clients with initial small amount of service charges and then gradually demanded more and more amount in the name of GST, creation of service ID, differential advance amount, among others, the regulator said.

"Further, if the client is not able to pay or willing to pay additional amount, FI is threatening client about forfeiting the amount paid saying 'no refund policy'," Sebi said. In addition, Sebi noted that FI sold its services to the clients, which was not consistent with clients' risk appetite.

The actions of FI are prima facie in contravention of provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms and investment adviser regulation, Sebi said. Accordingly, it barred Kelva from buying, selling or dealing in the securities market or associating with securities market, either directly or indirectly, in any manner, till further directions.

The regulator also asked Kelva to "cease and desist" from undertaking any activity in the securities market including the activity of acting and representing through any media as an investment advisor, directly or indirectly, in any manner, till further directions. Kelva has been asked not to dispose of any asset held in her name or her proprietary firm's name, including money lying in bank accounts, except with the prior permission of Sebi.