Description
SEBI imposes penalty on Research Analyst Abhishek Kumar Singh (Supreme Investrade) for promising assured returns, inducing clients, and violating research analyst regulations during February-November 2024.
Summary
SEBI issued an adjudication order (Order No. Order/AK/DS/2025-26/31837) against Abhishek Kumar Singh, Proprietor of Supreme Investrade and Research Services (SEBI Registration No. INH000008747), for violations during the inspection period February 1, 2024 to November 30, 2024. The order was issued under Section 15-I of the SEBI Act, 1992 following a thematic inspection that found the research analyst was promising assured returns to clients, violating SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 and SEBI (Research Analysts) Regulations, 2014.
Key Points
- SEBI conducted thematic inspection of Research Analyst Abhishek Kumar Singh for the period February 1, 2024 to November 30, 2024
- 44 SCORES complaints were received against the Noticee from 18 unique complainants during the inspection period
- Violations included promising assured returns (15-20% daily gains), inducing clients to increase position sizes, and soliciting profit-sharing arrangements (50-70% of client profits)
- Noticee posted screenshots of profits allegedly earned by existing clients without indicating risks involved
- Show Cause Notice (No. SEBI/HO/EAD/EAD1/P/OW/2025/20571/1) was issued on July 31, 2025
- Adjudication proceedings initiated on June 4, 2025; Adjudicating Officer appointed on June 30, 2025
- Violations of SEBI Act, PFUTP Regulations, and Research Analysts Regulations were prima facie observed
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
- Research Analysts must not induce clients to increase position sizes or average out positions with assurances of profit recovery
- Research Analysts must not solicit profit-sharing arrangements from clients
- Research Analysts must indicate risks when showcasing client profits or performance
- Research Analysts must comply with conduct and disclosure requirements under RA Regulations, 2014
- All registered Research Analysts should review their client communication and service practices to ensure compliance
Important Dates
- Inspection Period: February 1, 2024 to November 30, 2024
- Inspection Findings Communicated: April 9, 2025
- Noticee’s Reply: April 17, 2025
- Adjudication Proceedings Approved: June 4, 2025
- Adjudicating Officer Appointed: June 30, 2025
- Show Cause Notice Issued: July 31, 2025
- Order Date: December 15, 2025
Impact Assessment
Market Impact: Limited direct market impact as this is an enforcement action against an individual research analyst. However, it sends a strong compliance message to all registered research analysts.
Regulatory Impact: Reinforces SEBI’s zero-tolerance approach toward research analysts who promise assured returns or engage in fraudulent practices. Sets precedent for similar violations.
Investor Protection: Positive impact on investor protection by penalizing misleading practices and demonstrating SEBI’s commitment to addressing investor complaints through SCORES mechanism.
Industry Impact: Research analysts must ensure strict adherence to conduct standards, avoid performance guarantees, and maintain transparent risk disclosure when marketing services. The high number of complaints (44 from 18 complainants) highlights the importance of proper client communication and ethical business practices.
Impact Justification
Adjudication order against individual research analyst for regulatory violations; serves as compliance warning for research analysts but has limited broader market impact