Description

SEBI adjudication order imposing penalties on Research Guru (Registration No. INA000005507) and its associates for multiple violations of Investment Advisers Regulations including fraudulent practices and unauthorized operations.

Summary

SEBI has issued Adjudication Order No. Order/SM/SM/2025-26/31989-31990 against Research Guru (Investment Adviser Registration No. INA000005507), its proprietor Mrs. Veena Sharma, and Mr. Abhishek Sharma for multiple violations of SEBI regulations. The order follows a surprise inspection conducted from July 14-18, 2022, triggered by complaints alleging unethical practices including unauthorized franchise distribution allowing unregistered entities to conduct investment advisory activities.

Key Points

  • SEBI initiated adjudication proceedings against Research Guru (Noticee 1), Mrs. Veena Sharma (proprietor), and Abhishek Sharma (Noticee 2)
  • Complaint received from former employee alleging proprietor never visited office since obtaining registration
  • Entire operations allegedly carried out by Mr. Abhishek Sharma who was distributing franchises to unregistered entities
  • Connection established with Capital Vista case where it was revealed Mr. Abhishek Sharma was the actual person behind operations
  • Surprise inspection conducted at registered office covering period from April 1, 2021 onwards
  • Multiple regulatory violations charged under SEBI Act Section 15-I

Regulatory Changes

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

  • SEBI (Investment Advisors) Regulations, 2013
  • SEBI (Intermediaries) Regulations, 2008
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003

Compliance Requirements

Investment Advisers must ensure:

  • Compliance with Regulation 15(12) regarding operational standards
  • Adherence to Third Schedule Code of Conduct clauses 1-8 under Regulation 15(1) and 15(9)
  • Compliance with Schedule II of Intermediaries Regulations
  • No fraudulent or unfair trade practices under PFUTP Regulations
  • Proper compliance with Regulations 7, 13(a), 13(b), 16, 17, and 18(1) of IA Regulations 2013
  • No unauthorized sub-delegation or franchise arrangements for investment advisory activities

Important Dates

  • April 1, 2021: Start of inspection period
  • July 11, 2022: Hearing before Competent Authority in Capital Vista matter
  • July 14-18, 2022: Surprise inspection conducted at Research Guru’s registered office
  • 2025-26: Adjudication order issued (Order No. Order/SM/SM/2025-26/31989-31990)

Impact Assessment

Market Impact: Medium - Affects investors who engaged with Research Guru and highlights risks of dealing with non-compliant investment advisers. Serves as warning to investment advisory industry about regulatory enforcement.

Regulatory Impact: High - Demonstrates SEBI’s strict enforcement against investment advisers operating through unauthorized persons or franchise models. Sets precedent for action against registered entities allowing unregistered persons to conduct advisory activities.

Investor Protection: Significant concern for clients of Research Guru who may have received advice from unregistered entities operating under the firm’s registration. Investors should verify their investment adviser’s registration status and ensure direct engagement with registered persons.

Impact Justification

High importance due to serious regulatory violations by registered investment adviser including fraudulent practices, unauthorized franchise operations, and non-compliance with multiple SEBI regulations. Medium market impact as it affects one specific investment adviser firm rather than broader market operations.