Description

SEBI adjudication order against research analyst Abhishek Kumar Singh for violations including promising assured returns, improper fee solicitation, and fraudulent trade practices during inspection period February-November 2024.

Summary

SEBI has issued Adjudication Order No. Order/AK/DS/2025-26/31837 against Abhishek Kumar Singh, proprietor of Supreme Investrade and Research Services (SEBI Registration No. INH000008747), following a thematic inspection covering February 01, 2024 to November 30, 2024. The order was issued under Section 15-I of the SEBI Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995. The violations include promising assured returns to clients, improper fee solicitation practices, and contraventions of PFUTP Regulations and RA Regulations.

Key Points

  • Research Analyst: Abhishek Kumar Singh (PAN: CLZPS0733E), Proprietor of Supreme Investrade and Research Services
  • SEBI Registration Number: INH000008747
  • Inspection Period: February 01, 2024 to November 30, 2024
  • 44 SCORES complaints received from 18 unique complainants during inspection period
  • Violations identified include promising assured returns (15-20% daily gains), improper fee structures (50-70% profit sharing), and inducing clients with misleading profit screenshots
  • Show Cause Notice issued on July 31, 2025 (No. SEBI/HO/EAD/EAD1/P/OW/2025/20571/1)
  • Adjudication proceedings approved on June 04, 2025, Adjudicating Officer appointed June 30, 2025

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions under:

  • SEBI Act, 1992 (Section 15-I, Section 15EB)
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
  • SEBI (Research Analysts) Regulations, 2014
  • SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995

Compliance Requirements

  • Research Analysts must not promise or assure guaranteed returns to clients
  • Fee structures must comply with RA Regulations and cannot be based on profit-sharing arrangements (70% and 50% shares from client profits)
  • Research Analysts must not induce clients by showcasing profit screenshots without proper risk disclosures
  • Personal trading recommendations must comply with regulatory guidelines
  • Research Analysts must not pressure clients to increase position sizes or average out positions with assurances of recovering fees on the same day
  • Proper disclosure and transparency requirements must be maintained in all client communications

Important Dates

  • Inspection Period: February 01, 2024 to November 30, 2024
  • Inspection Findings Communicated: April 09, 2025
  • Noticee’s Reply: April 17, 2025
  • Adjudication Proceedings Approved: June 04, 2025
  • Adjudicating Officer Appointed: June 30, 2025
  • Show Cause Notice Issued: July 31, 2025
  • Order Date: December 17, 2025 (publication date)

Impact Assessment

Market Impact: Low - This enforcement action targets a single registered research analyst and does not affect broader market operations or multiple entities.

Industry Impact: Medium - Serves as a deterrent for research analysts engaging in similar malpractices including assured return promises and profit-sharing fee arrangements.

Investor Protection: High - Addresses serious violations that directly harm retail investors through misleading promises of guaranteed returns (15-20% daily gains) and exploitative fee structures.

Regulatory Precedent: Reinforces SEBI’s commitment to enforcement of research analyst regulations and protection against fraudulent trade practices. The case highlights common violations including:

  1. Promising assured/guaranteed returns
  2. Improper profit-sharing fee arrangements
  3. Misleading marketing through selective profit screenshots
  4. Inducing clients to increase positions without adequate risk disclosure
  5. Personal trading recommendations violating regulatory standards

Compliance Impact: Research analysts and similar intermediaries should review their client communication practices, fee structures, and marketing materials to ensure compliance with RA Regulations and PFUTP Regulations.

Impact Justification

Enforcement action against individual research analyst for regulatory violations. High severity due to fraudulent practices but low market impact as it affects one registered analyst. Important for regulatory compliance awareness.