Sebi bans GoCapital, proprietor from mkts for 4 yrs; directs them to refund investors

In a clampdown on unregistered investment advice, Sebi today barred GoCapital and its proprietor Ankitkumar Shashikant Singhania from the securities market for at least four years, while asking them to refund the fees collected from investors.

A Sebi probe found that GoCapital and Singhania were providing investment advisory services to clients for consideration without registration with the regulator and thereby violated Sebi's Investment Advisers Regulations.

They were giving trading tips and stock recommendations, among others, to the investors on payment of fees.

According to Sebi, they collected over Rs 27.65 lakh as fees from investors between October 2013 and March 2016 through different categories of schemes

"I find that the noticee has collected at least an amount of Rs 27,65,339 which has to be refunded to investors," Sebi Whole Time Member Madhabi Puri Buch said in an order.

 

Accordingly, Sebi has asked GoCapital and Singhania to "refund the money received from its clients as fees or profit sharing or compensation in any other form, in respect of its unregistered investment advisory activities".

After completing the repayments, they need to submit a certificate to the regulator within a period of three months. In case they fail to comply with the directive, Sebi can recover the amount.

Besides, they have been barred from the securities markets "till the expiry of 4 years from the date of refund". Also,

the proprietor has been restrained from associating with any listed public company or any Sebi-registered intermediary for the same period.

The two entities "shall not undertake, either directly or indirectly, investment advisory services or any activity in the securities market without obtaining a certificate of registration from Sebi as required under the securities laws after the expiry of period of debarment".

These directions would come into force with immediate effect.

In December 2015, Sebi had prohibited the two entities from acting as investment advisers after they provided unauthorised investment tips to investors.