Description

SEBI issues order under Section 12(3) against research analyst Parag Salot for violations including mis-selling services, fraudulent fund collection, and non-compliance with RA regulations.

Summary

SEBI has issued an order under Section 12(3) of the SEBI Act, 1992 against research analyst Parag Salot (Registration No. INH000000115, PAN: APEPS7000R) following an inspection for the period April 01, 2022 to February 29, 2024. The order addresses violations of SEBI Act, Research Analysts Regulations 2014, and PFUTP Regulations 2003.

Key Violations

  • Issue I: Mis-selling and Fraudulent Practices

    • Assured returns to clients
    • Fraudulent collection of funds from clients
    • Complaint filed by Mr. Pramod Kumar Mishra
    • Claiming to be an Investment Advisor on website without proper registration

  • Issue II: Non-compliance with RA Regulations

    • Failed to maintain records of research recommendations
    • Failed to conduct annual audits from FY 2014-15 to FY 2023-24
    • Failed to intimate SEBI about change of office address
    • Provided false/incomplete information about office locations
    • Failed to include required details in advertisements (RA name, registered office, SEBI registration number)
    • Failed to display investor charter and complaints on website
    • Failed to maintain details of all emails used for RA activities
    • Conducted RA activities without valid NISM certification

Regulatory Framework

  • SEBI Act, 1992 - Section 12(3)
  • SEBI (Research Analysts) Regulations, 2014
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • SEBI (Intermediaries) Regulations, 2008 - Regulation 27

Important Dates

  • Research Analyst registration date: March 02, 2015
  • Inspection period: April 01, 2022 to February 29, 2024
  • Inspection findings communicated: March 18, 2024
  • Noticee’s reply: March 25, 2024
  • Order date: August 25, 2025

Impact Assessment

This enforcement action demonstrates SEBI’s continued scrutiny of research analysts and intermediaries. The comprehensive nature of violations - ranging from fraudulent practices to basic compliance failures - highlights the importance of strict adherence to regulatory requirements. Other research analysts should review their compliance frameworks to ensure proper record-keeping, audit procedures, and client communication practices.

Impact Justification

High importance due to serious regulatory violations and enforcement action; medium impact as specific to one research analyst