Description

SEBI final order under Section 12(3) of SEBI Act, 1992 against Research Analyst Punit Kumar for violations of RA Regulations and PFUTP Regulations including guaranteed returns and misleading clients.

Summary

SEBI has issued a final order under Section 12(3) of SEBI Act, 1992 read with Regulation 27 of SEBI (Intermediaries) Regulations, 2008 against Punit Kumar (Proprietor of Shrimoney - Research Analyst), Registration No. INH000008844, PAN: AQHPK8566C. The order follows an inspection conducted on February 13, 2024 covering the period from April 01, 2022 to February 13, 2024, which revealed violations of SEBI (Research Analyst) Regulations, 2014 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

Key Points

  • SEBI Registration Number: INH000008844 (Research Analyst)
  • Noticee: Punit Kumar (Proprietor of Shrimoney - Research Analyst)
  • PAN: AQHPK8566C
  • Inspection Period: April 01, 2022 to February 13, 2024
  • Inspection Date: February 13, 2024
  • Pre-Enquiry SCN issued: July 04, 2024
  • Post-Enquiry SCN issued: March 05, 2025
  • Enquiry Report submitted: January 27, 2025
  • Final order issued under Section 12(3) of SEBI Act, 1992 and Regulation 27 of Intermediaries Regulations, 2008

Regulatory Violations Found

The Designated Authority (DA) observed the following violations:

  1. Guaranteed Returns and Misleading Clients: The Noticee guaranteed returns and misled clients in violation of PFUTP Regulations read with RA Regulations

  2. Disclosure Failures: The Noticee failed to make disclosures as required under Regulation 19 of RA Regulations

  3. Record Maintenance: The Noticee did not maintain record of rationale (note: document appears truncated at this point)

Compliance Requirements

  • Research Analysts must not guarantee returns to clients
  • Research Analysts must not mislead clients through fraudulent or unfair trade practices
  • Compliance with disclosure requirements under Regulation 19 of RA Regulations is mandatory
  • Proper record-keeping of rationale and analysis must be maintained
  • Adherence to SEBI (Research Analyst) Regulations, 2014
  • Adherence to SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • Compliance with SEBI (Intermediaries) Regulations, 2008

Important Dates

  • February 13, 2024: SEBI inspection conducted
  • February 21, 2024: Inspection findings communicated to Noticee
  • March 04, 2024: Noticee submitted response to inspection observations
  • July 04, 2024: Pre-Enquiry Show Cause Notice issued by DA
  • July 25, 2024: Noticee filed reply to pre-enquiry SCN
  • August 13, 2024: Personal hearing granted and availed by Noticee
  • August 20, 2024: Additional submissions filed by Noticee
  • January 27, 2025: Enquiry Report submitted by DA
  • March 05, 2025: Post-Enquiry Show Cause Notice issued
  • October 10, 2025: Final order published

Impact Assessment

Market Impact: Medium - This enforcement action serves as a deterrent to Research Analysts who may engage in fraudulent practices such as guaranteeing returns or misleading clients. While it affects one intermediary directly, it reinforces SEBI’s commitment to maintaining integrity in research analysis services.

Investor Protection: High - The violations identified (guaranteed returns and misleading clients) directly harm investor interests. The regulatory action protects investors from fraudulent research advisory services.

Regulatory Precedent: This order demonstrates SEBI’s vigilance in monitoring Research Analyst activities and willingness to take enforcement action under the Intermediaries Regulations framework for violations of RA Regulations and PFUTP Regulations.

Industry Impact: Research Analysts should review their practices regarding client communications, disclosure requirements, and record-keeping to ensure full compliance with applicable regulations to avoid similar enforcement actions.

Impact Justification

Enforcement action against a registered Research Analyst for regulatory violations. High severity due to fraudulent practices but medium impact as it affects only one intermediary and their clients rather than broader market participants.