Market regulator Sebi bars FWCS, its directors from markets for 1 year

In its interim order, the regulator found FWCS and its directors were prima facie found to have violated the provisions of PFUTP rules and IA norms

Markets regulator Sebi has barred Fingravy Wealth Creation Services (FWCS) and its directors from the securities markets for 1 year for providing unauthorised advisory services.

The order came after Sebi passed an ex-parte interim order dated January 14, 2020 against FWCS and its present and past directors -- Dhiraj Gupta, Sumit Kumar, Hemanchal Singh, Ravindra Singh and Ashutosh Sharma.

In its interim order, the regulator found FWCS and its directors were prima facie found to have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules and IA (Investment Advisors) norms.

The regulator also noted, noticees have been restrained from accessing the securities markets until further orders through the interim order.

They were also directed to cease and desist from acting as an investment advisor until further orders.

In its final order, the regulator found FWCS and its directors have not disputed the findings of the interim order in respect of the company carrying out investment advisory services without obtaining registration from Sebi as an 'investment advisor'.

The aggregate amount of Rs 6.13 crore that has been collected by FWCS by providing unregistered investment advisory services for the period from January 2018 to August 2019, Sebi said in the latest order on Tuesday.

Sebi has directed noticees to refund, "jointly and severally", within three months, the money received from clients in respect of their unregistered investment advisory activities.

Also, the regulator restrained them from accessing or dealing in the securities markets for a period of 1 year or till the expiry of 1 year from the date of completion of refunds to investors along with depositing of balance amounts, whichever is later.

In addition, they shall not undertake investment advisory services or any activity in the securities market without obtaining a certificate of registration from Sebi, either directly or indirectly, during or after the expiry of the period of debarment period, the order said.

Meanwhile, in a separate order, the regulator slapped a fine of Rs 5 lakh on an entity for violating the regulatory norms in the matter of Vivimed Labs Ltd.

In another order, the regulator imposed a fine of Rs 2 lakh on Investmaxima Advisors LLP for not complying with Sebi's AIF (alternative investment funds) rules.