Sebi orders Capquest Research to return clients' money

Markets regulator Sebi has asked Capquest Research to return the money received from clients as fees in respect of its unregistered investment advisory activities.

Besides, Sebi has barred the firm and its three directors -- Gitesh Malik, Shashanka Sharma and Prashant Kumar -- from the markets for at least four years. Also, directors have been restrained from associating with any listed firm for the same duration.

The regulator found that Capquest Research Pvt Ltd (CRPL) was giving trading tips and stock specific recommendations to investors on payment of fees. It was seen assuring guaranteed return on execution of its stock tips and is providing assurance of 90 per cent accuracy of its tip.
 

It was carrying out such investment advisory activities without obtaining registration from Sebi. By acting as advisors, it has violated the provisions of Sebi Investment Advisers norms.

CRPL has admittedly collected over Rs 24.82 lakh from at least 228 clients for acting as unregistered investment adviser.

"It would be reasonable that such funds collected in any name are liable to be returned to the clients," Sebi Whole Time Member Madhabi Puri Buch said in an order dated December 11.

Accordingly, Sebi has asked the company to refund the money received from the clients in respect of the unregistered investment advisory activities and submit a report in this regard within a period of three months.

CRPL and its promoter or directors have been prohibited from accessing the securities market "till the expiry of four years from the date of refund of the money".

Further, the directors have been restrained from "associating with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with Sebi till the expiry of four years from the date of refund of the money".

The firm and its directors "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...after the expiry of period of debarment".