Description

SEBI adjudication proceedings against Capital Stroke Investment Services Pvt. Ltd. and its directors for non-compliance with investment adviser regulations during 2019-2020.

Summary

SEBI has issued an adjudication order against Capital Stroke Investment Services Pvt. Ltd. (Registration No. INA000001316) and its three directors - Upendra Singh Rajput, Prashant Singh Baghel, and Kamlesh Dhole. The action follows inspection findings revealing non-compliance with SEBI Act, PFUTP Regulations, and Investment Advisers Regulations during April 2019 to September 2020.

Key Points

  • Capital Stroke Investment Services Pvt. Ltd. is a SEBI registered investment adviser (INA000001316)
  • Inspection period covered April 1, 2019 to September 22, 2020
  • SEBI issued interim order on August 27, 2021 and confirmatory order on June 8, 2022
  • Company provided bank statements, client records, financial statements, and refund information in November 2022
  • Multiple adjudicating officers appointed due to transfers and case reallocation
  • Current adjudication proceedings under sections 15C, 15HA, 15EB, and 15HB of SEBI Act

Regulatory Changes

No new regulatory changes introduced. This represents enforcement of existing Investment Advisers Regulations, 2013 and related SEBI provisions.

Compliance Requirements

Investment advisers must ensure:

  • Full compliance with SEBI (Investment Advisers) Regulations, 2013
  • Adherence to SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • Proper maintenance of client records and financial documentation
  • Timely response to SEBI inspection requirements

Important Dates

  • Inspection Period: April 1, 2019 to September 22, 2020
  • Inspection Conducted: November 3-6, 2020
  • Interim Order: August 27, 2021
  • Confirmatory Order: June 8, 2022
  • Current AO Appointed: April 30, 2025

Impact Assessment

Limited direct market impact as this affects only one investment adviser firm. However, it reinforces SEBI’s commitment to regulatory compliance in the investment advisory sector and serves as a deterrent for other advisers to maintain proper compliance standards.

Impact Justification

Regulatory action against specific investment adviser with limited broader market impact