Description

SEBI issues adjudication order against Capital Stroke Investment Services and its directors for non-compliance with investment adviser regulations during 2019-2020 inspection period.

Summary

SEBI has issued an adjudication order against Capital Stroke Investment Services Pvt. Ltd. (Registration No. INA000001316) and its three directors for violations of SEBI Act, PFUTP Regulations, and Investment Advisers Regulations. The order stems from an inspection conducted for the period April 1, 2019 to September 22, 2020, with additional examination of investor complaints received after the inspection period.

Key Points

  • Capital Stroke Investment Services Pvt. Ltd. is a SEBI-registered investment adviser under scrutiny
  • Directors involved: Mr. Upendra Singh Rajput, Mr. Prashant Singh Baghel, and Mr. Kamlesh Dhole
  • 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
  • Multiple adjudicating officers appointed due to transfers and case reallocations

Regulatory Changes

This enforcement action reinforces existing compliance requirements under:

  • SEBI (Investment Advisers) Regulations, 2013
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • SEBI Act provisions

Compliance Requirements

  • Investment advisers must maintain proper books of accounts and client records
  • Adherence to KYC and agreement documentation standards
  • Proper fee collection and refund procedures
  • Compliance with financial reporting 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 Appointment: April 30, 2025

Impact Assessment

This adjudication order serves as a warning to investment advisers about strict compliance requirements. The detailed examination process and multiple regulatory interventions demonstrate SEBI’s commitment to protecting investor interests and maintaining market integrity in the investment advisory segment.

Impact Justification

Regulatory enforcement action against investment adviser affecting industry compliance standards