Description

SEBI adjudication order against Research Analyst Abhishek Kumar Singh for violations including promising assured returns, fraudulent practices, and non-compliance with Research Analyst Regulations during 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 for the period February 01, 2024 to November 30, 2024. The inspection investigated whether the Research Analyst was promising assured returns to clients. Based on findings and 44 SCORES complaints from 18 unique complainants, prima facie violations were observed under SEBI Act 1992, PFUTP Regulations 2003, and Research Analyst Regulations 2014. An Adjudicating Officer was appointed on June 30, 2025, and a Show Cause Notice was issued on July 31, 2025.

Key Points

  • Thematic inspection conducted for period February 01, 2024 to November 30, 2024 focusing on assured returns promises
  • 44 SCORES complaints received from 18 unique complainants during inspection period
  • Prima facie violations of SEBI Act, PFUTP Regulations, and Research Analyst Regulations observed
  • Adjudication proceedings initiated on June 04, 2025; Adjudicating Officer appointed June 30, 2025
  • Show Cause Notice issued on July 31, 2025 (Notice No. SEBI/HO/EAD/EAD1/P/OW/2025/20571/1)
  • Violations include promising 15-20% daily gains, inducing clients to increase positions, soliciting 50-70% profit sharing, and posting misleading profit screenshots

Regulatory Violations Observed

Specific Violations from SCORES Complaints:

  1. Assured Returns - Provided assurance to client Abhishek Dharmesh Gandhi regarding earning 15-20% gains on a daily basis

  2. Inducement and Recovery Promises - Induced client Narayana to increase position size and average existing positions; assured recovery of fees on same day through trading

  3. Excessive Profit Sharing - Solicited 70% and 50% share from profits made by client Sachin Solanki as fees for research services

  4. Misleading Promotions - Induced complainant Mukul by posting screenshots of profits allegedly earned by existing clients without indicating risks involved

  5. Direct Recommendations - Personally providing recommendations to client Ambuj Kumar (complaint description appears truncated in source)

Compliance Requirements

  • Research Analysts must not promise or guarantee assured returns to clients
  • Must comply with SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
  • Must adhere to SEBI (Research Analysts) Regulations, 2014
  • Must not induce clients through misleading representations or screenshots without proper risk disclosure
  • Fee structures must be transparent and not based on excessive profit-sharing arrangements
  • All client communications and marketing materials must include appropriate risk warnings

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

Impact Assessment

Market Impact: Medium - This enforcement action reinforces SEBI’s zero-tolerance approach toward Research Analysts making assured return promises and engaging in fraudulent practices. It sends a strong deterrent message to the research analyst community.

Investor Protection: High - The action protects retail investors from being misled by false promises of guaranteed returns and excessive fee structures based on profit sharing.

Regulatory Precedent: The case highlights SEBI’s proactive thematic inspection approach and use of SCORES complaints as evidence in enforcement actions. The violations span multiple regulatory frameworks (SEBI Act, PFUTP Regulations, and RA Regulations), demonstrating comprehensive regulatory oversight.

Industry Impact: Research Analysts and investment advisors should review their client communication practices, fee structures, and marketing materials to ensure compliance with regulations prohibiting assured returns and requiring proper risk disclosures.

Impact Justification

Enforcement action against a registered Research Analyst for serious violations including promising assured returns and fraudulent practices. Medium impact as it affects one intermediary and serves as regulatory precedent for Research Analyst conduct.