Description

SEBI issues order under Section 12(3) against Research Analyst Parag Salot (Registration No. INH000000115) for mis-selling services, fraudulent fund collection, and multiple regulatory compliance failures.

Summary

SEBI has issued an enforcement order against Research Analyst Parag Salot (Registration No. INH000000115, PAN: APEPS7000R) under Section 12(3) of the SEBI Act following an inspection covering April 2022 to February 2024. The order addresses serious violations including fraudulent practices, mis-selling of services with assured return promises, and systematic non-compliance with Research Analyst regulations.

Key Points

  • Research Analyst registered since March 2, 2015 found guilty of multiple regulatory violations
  • Inspection period covered April 1, 2022 to February 29, 2024
  • Two major categories of violations identified: fraudulent practices and regulatory non-compliance
  • Violations include mis-selling services, fraudulent fund collection, and assured return promises
  • Failed to maintain proper records of research recommendations provided to clients
  • Conducted business without proper annual audits from FY 2014-15 to FY 2023-24
  • Failed to comply with disclosure and transparency requirements

Regulatory Changes

  • Reinforces existing requirements under SEBI (Research Analysts) Regulations, 2014
  • Emphasizes compliance with SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • Strengthens enforcement of intermediary registration and operational requirements

Compliance Requirements

  • Research Analysts must maintain detailed records of all recommendations provided to clients
  • Annual audits are mandatory and must be conducted regularly
  • Proper disclosure of registration details, office addresses required in all communications
  • Website must display investor charter and complaint details
  • Valid NISM certification required for conducting RA activities
  • No assured returns or fraudulent promises allowed in client communications
  • Immediate notification required for any change in office address

Important Dates

  • Registration Date: March 2, 2015
  • Inspection Period: April 1, 2022 to February 29, 2024
  • Inspection Findings Communicated: March 18, 2024
  • Noticee Response: March 25, 2024
  • Order Date: August 25, 2025

Impact Assessment

This enforcement action serves as a strong warning to all Research Analysts regarding strict compliance with regulatory requirements. The case highlights SEBI’s zero-tolerance approach toward fraudulent practices and mis-selling in the research analyst space. Market participants should expect increased scrutiny of research analyst operations, particularly regarding client communications, record-keeping, and compliance with disclosure requirements. The order reinforces investor protection measures and emphasizes the importance of transparent and ethical conduct in research services.

Impact Justification

Major regulatory enforcement action against research analyst for serious violations including fraud and mis-selling