Markets regulator Sebi today imposed a penalty of Rs 75 lakh on Capvision Investment Advisor for carrying on business as investment advisor prior to applying for registration.
The Securities and Exchange Board of India (Sebi) found that the company was carrying out business as Investment Advisor without even filing an application for grant of registration with the regulator. It was only on April 17, 2014 -- after more than six months from commencement of business that the firm filed an application for registration.
On noticing that, Sebi sent letter on April 22, 2014 directing the firm to stop all investment advisory related activities till it gets registration. The firm got registration in June 2014.
"I consider that the act of the noticee of carrying on Investment advisory business without seeking registration from Sebi was in itself in reckless disregard to the regulatory requirement in place, resulting in his unjust enrichment. Further defying of regulators specific directive to it to stop all Investment Advisory related activities is a matter of serious concern," Sebi Adjudicating Officer Rachna Anand said in an order.
The firm has committed a "serious offence by providing unauthorised investment advisory services to the tune of Rs 63 lakh in my view is unjust enrichment, of which Rs 19 lakh was despite receiving specific directive from Sebi to stop all investment advisory related activities.
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