Description

SEBI adjudication order against Research Analyst Abhishek Kumar Singh for violations including promising assured returns, improper fee solicitation, and inducing clients with misleading profit claims.

Summary

SEBI has issued Adjudication Order No. Order/AK/DS/2025-26/31837 under Section 15-I of the SEBI Act, 1992 against Abhishek Kumar Singh, Proprietor of Supreme Investrade and Research Services (SEBI Registration No. INH000008747). The order follows a thematic inspection for the period February 1, 2024 to November 30, 2024, which revealed multiple violations of SEBI regulations including promising assured returns to clients, improper fee solicitation, and inducing clients with misleading profit claims.

Key Points

  • Research Analyst: Abhishek Kumar Singh (PAN: CLZPS0733E), Proprietor of Supreme Investrade and Research Services
  • SEBI Registration Number: INH000008747
  • Inspection Period: February 1, 2024 to November 30, 2024
  • Show Cause Notice issued: July 31, 2025 (Notice No. SEBI/HO/EAD/EAD1/P/OW/2025/20571/1)
  • Adjudication Order approved: June 4, 2025; AO appointed June 30, 2025
  • Total complaints received: 44 SCORES complaints from 18 unique complainants during inspection period

Regulatory Violations

The Noticee was found to have prima facie violated:

  1. SEBI Act, 1992 - General provisions
  2. SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations)
  3. SEBI (Research Analysts) Regulations, 2014 (RA Regulations)

Specific Violations Identified:

  • Assured Returns: Provided assurance to client Abhishek Dharmesh Gandhi regarding earning 15-20% gains on a daily basis
  • Client Inducement: Induced clients to increase position size and average out existing positions; assured clients they would recover fees on the same day by trading
  • Improper Fee Structure: Solicited 70% and 50% share from profits made by clients as fees for research services
  • Misleading Marketing: Induced complainants by posting screenshots of profits allegedly earned by existing clients without indication of risk involved
  • Personal Trading Recommendations: Personally providing recommendations to clients

Compliance Requirements

Research Analysts are reminded that they must:

  • Not promise or guarantee assured returns to clients
  • Not solicit profit-sharing fees from clients
  • Properly disclose risks associated with trading recommendations
  • Avoid misleading clients with selective profit screenshots
  • Comply with fee structure guidelines under RA Regulations
  • Adhere to all provisions of SEBI (Research Analysts) Regulations, 2014

Important Dates

  • Inspection Period: February 1, 2024 to November 30, 2024
  • Inspection Findings Communicated: April 9, 2025
  • Noticee’s Reply: April 17, 2025
  • Adjudication Approved: June 4, 2025
  • Adjudicating Officer Appointed: June 30, 2025
  • Show Cause Notice Issued: July 31, 2025

Impact Assessment

This enforcement action demonstrates SEBI’s continued vigilance in monitoring registered Research Analysts and ensuring compliance with regulations designed to protect investors. The violations identified—particularly promising assured returns and profit-sharing fee arrangements—are serious breaches that undermine investor protection principles.

While this action is specific to one Research Analyst, it serves as a reminder to all registered RAs about the importance of:

  • Maintaining ethical standards in client interactions
  • Avoiding guaranteed return promises
  • Proper risk disclosure
  • Transparent and compliant fee structures

Investors dealing with research analysts should be wary of any promises of assured returns or profit-sharing arrangements, as these are clear red flags of non-compliant practices. The market impact is limited to clients of this specific RA, but the precedent reinforces regulatory standards across the industry.

Impact Justification

High severity enforcement action against a research analyst for serious violations, but low market-wide impact as it affects only one RA and their clients. Important for compliance awareness but limited broader market implications.