Description

SEBI adjudication order against Research Analyst Abhishek Kumar Singh for violations including promising assured returns, inducing clients, and soliciting profit-sharing arrangements during February-November 2024.

Summary

SEBI has issued Adjudication Order No. Order/AK/DS/2025-26/31837 against Research Analyst Abhishek Kumar Singh (Proprietor of Supreme Investrade and Research Services, Registration No. INH000008747) under Section 15-I of the SEBI Act, 1992. The order follows a thematic inspection covering February 1, 2024 to November 30, 2024, which revealed multiple violations including promising assured returns to clients, inducing clients to increase position sizes, and soliciting profit-sharing arrangements. The Show Cause Notice (SCN) was issued on July 31, 2025, based on 44 SCORES complaints from 18 unique complainants.

Key Points

  • Thematic inspection conducted for period February 1, 2024 to November 30, 2024
  • 44 SCORES complaints received from 18 unique complainants against the Research Analyst
  • Prima facie violations of SEBI Act, 1992, PFUTP Regulations, and Research Analysts Regulations, 2014 observed
  • Adjudication proceedings initiated on June 4, 2025; Adjudicating Officer appointed on June 30, 2025
  • Show Cause Notice No. SEBI/HO/EAD/EAD1/P/OW/2025/20571/1 issued on July 31, 2025
  • Noticee provided assurances of 15-20% daily gains to clients
  • Noticee induced clients to increase position sizes and average out existing positions
  • Noticee solicited 50-70% profit-sharing from clients as fees for research services
  • Noticee allegedly posted screenshots of profits without risk disclosures to induce clients

Regulatory Changes

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

  • SEBI Act, 1992 (Section 15-I)
  • 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 guarantee assured returns to clients
  • Research Analysts must not induce clients to increase position sizes or average out positions with assurances of recovery
  • Research Analysts must not solicit profit-sharing arrangements that deviate from standard fee structures
  • Research Analysts must provide adequate risk disclosures when sharing performance information
  • Research Analysts must comply with all provisions of RA Regulations, 2014 and PFUTP Regulations

Important Dates

  • February 1, 2024 to November 30, 2024: Inspection period
  • April 9, 2025: Inspection findings communicated to Noticee
  • April 17, 2025: Noticee’s reply submitted
  • June 4, 2025: SEBI approved initiation of adjudication proceedings
  • June 30, 2025: Adjudicating Officer appointed
  • July 31, 2025: Show Cause Notice issued

Impact Assessment

Market Impact: Low - Action is specific to one registered Research Analyst and does not affect broader market operations or trading.

Investor Impact: Medium - Demonstrates SEBI’s active enforcement against Research Analysts engaging in unethical practices, particularly promising assured returns. Provides investor protection through regulatory oversight of Research Analyst conduct.

Regulatory Significance: High - Reinforces prohibition on assured return promises and highlights scrutiny of Research Analyst practices based on SCORES complaints. Sets precedent for enforcement against profit-sharing arrangements and misleading client inducements.

Compliance Impact: Medium - Serves as a reminder to all registered Research Analysts to strictly adhere to RA Regulations, 2014 and avoid practices such as guaranteed returns, aggressive client solicitation, and inappropriate fee structures. Research Analysts should review their client communication and fee arrangements for compliance.

Impact Justification

Enforcement action against individual research analyst; limited market-wide impact but highlights regulatory scrutiny on assured return promises and unethical practices by research analysts.