Description

SEBI order against Research Analyst Parag Salot for mis-selling services, fraudulent fund collection, and multiple regulatory violations.

Summary

SEBI has issued an order under Section 12(3) of the SEBI Act against Research Analyst Parag Salot (SEBI Registration No.: INH000000115) for violations during the inspection period April 2022 to February 2024. The order addresses fraudulent practices including mis-selling services, assured return promises, and multiple compliance failures under RA Regulations and PFUTP Regulations.

Key Points

  • Research Analyst Parag Salot found guilty of mis-selling services and fraudulent fund collection
  • Violations include providing assured returns to clients
  • Failed to maintain proper records of research recommendations
  • Did not conduct mandatory annual audits from FY 2014-15 to FY 2023-24
  • Failed to intimate SEBI about office address changes
  • Provided false information regarding office locations for RA activities
  • Advertisement violations - missing mandatory details like RA name, registered office address, SEBI registration number
  • Failed to display investor charter and complaints on website
  • Conducted RA activities without valid NISM certification
  • Complaint filed by client Mr. Pramod Kumar Mishra regarding assured returns

Regulatory Changes

This order reinforces existing compliance requirements for Research Analysts and highlights enforcement of regulations against fraudulent practices.

Compliance Requirements

  • Research Analysts must maintain proper records of all recommendations
  • Mandatory annual audits must be conducted and submitted
  • Any change in office address must be promptly communicated to SEBI
  • Advertisements must include complete mandatory disclosures
  • Valid NISM certification required for RA activities
  • Investor charter and complaint details must be displayed on websites
  • Assured returns or guaranteed profits cannot be promised to clients

Important Dates

  • Inspection Period: April 01, 2022 to February 29, 2024
  • Initial Registration: March 02, 2015
  • Inspection findings communicated: March 18, 2024
  • Noticee reply submitted: March 25, 2024

Impact Assessment

This enforcement action serves as a warning to Research Analysts about strict compliance requirements and consequences of fraudulent practices. It emphasizes SEBI’s commitment to protecting investor interests and maintaining market integrity through proper supervision of intermediaries.

Impact Justification

Enforcement action against individual research analyst with implications for RA compliance standards