Research Analyst Manas Jaiswal Slapped with Rs5 Lakh Penalty by SEBI

Moneylife Digital Team 16 May 2025

Investor Interest

Market Regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs5 lakh on Manas Jaiswal, a SEBI-registered research analyst (RA), for multiple violations of rules and regulations. Following an inspection covering the period from 1 September 2020 to 31 July 2023, SEBI found multiple violations of SEBI Research Analysts Regulations, 2014 (RA Regulations) and the SEBI Act, 1992, relating to certification, record-keeping, disclosures and conduct.

In an order, Amit Kapoor, adjudicating officer of SEBI, says, "The non-compliances on the part of Mr Jaiswal, as brought out in the preceding paragraphs, clearly show that it had failed in its fiduciary duties owed to its clients. Mr Jaiswal being a registered intermediary is expected to take the statutory compliances seriously and take extra care to maintain a high degree of professionalism in the conduct of its business.”

SEBI found that Mr Jaiswal's National Institute of Securities Markets (NISM) certification had expired on 21 December 2019, yet he continued to act as an RA without a valid certificate until 28 December 2022. Additionally, his registration was valid only until 9 September 2020 and the renewal fees were paid late on 18 October 2022. Although Mr Jaiswal admitted that this non-compliance resulted from ignorance and a mistaken belief that registration was permanent after regulatory amendments, SEBI held that continuing to provide services without valid registration is unacceptable, and ignorance of the law is no excuse.

Mr Jaiswal also admitted to not maintaining a documented rationale for the recommendations made to clients or during public appearances. His claim that these recommendations were solely for trading, not investment, was rejected by SEBI, which emphasised that all recommendations must be backed by sound rationale, regardless of their purpose. This failure constituted a breach of regulation 18(7) and related Code of Conduct provisions.

Furthermore, while Mr Jaiswal maintained social media accounts and regularly appeared on TV channels, providing stock recommendations via WhatsApp groups, he failed to disclose his financial interests in the companies he recommended. Although he claimed he had no such interests and therefore no obligation to disclose, SEBI made it clear that regulations require disclosure of financial interests during public appearances and communications. This led to violations of regulations 19 and 21(1) and corresponding Code of Conduct clauses.

SEBI inspection also found that Mr Jaiswal’s website mentioned a “risk & reward ratio” of 1:2 without explaining its meaning, creating ambiguity that could mislead clients. Although he later removed this term, the initial use of vague terminology was deemed a violation of regulation 20(1) and relevant Code of Conduct requirements.

Lastly, Mr Jaiswal failed to comply with the mandatory annual audit requirements, citing the COVID-19 pandemic as a reason. He argued that his recommendations were technical trading calls, not research reports and thus certain regulations did not apply. However, SEBI observed that Mr Jaiswal regularly issued stock-specific recommendations, maintained records in unsigned and undated Excel sheets and lacked detailed records of public appearances. SEBI underscored that all recommendations, whether for trading or investment, require proper documentation and justification, confirming violations of regulations 25(1), 25(3), and related Code of Conduct provisions.

Comments

User

Investor Interest

SEBI Cracks Down on Varyaa IPO Misuse, Freezes Promoters' Shares, Bars Inventure over Diversion of 71% of Proceeds

Moneylife Digital Team 16 May 2025

Market regulator Securities and Exchange Board of India (SEBI) has exposed what it calls a ‘collusive’ scheme to siphon off most of the funds from Varyaa Creations Ltd’s small and medium enterprises (SME) initial public offering...

Investor Interest

NSEL Scam: Supreme Court Upholds Priority of MPID Act over RDB Act, SARFAESI and IBC

SN Thyagarajan (Bar and Bench) 15 May 2025

The Supreme Court on Thursday held that the Maharashtra Protection of Interest of Depositors (MPID) Act overrides the provisions of Central financial recovery statutes, including the Securitisation and Reconstruction of Financial...

Investor Interest

Fraser and Company, Promoters Penalised Rs5 Lakh by SEBI for Regulatory Violations

Moneylife Digital Team 15 May 2025

Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs5 lakh on Fraser and Company Ltd (noticee 1) along with Yogeeta Shivhare (noticee 2) and Omkar Shivhare (noticee 3), both promoters, as well as...

Investor Interest

Motisons Commodities Barred from On-boarding New Clients for 15 Days

Moneylife Digital Team 15 May 2025

Market regulator Securities and Exchange Board of India (SEBI) has imposed a 15-days restriction on Motisons Commodities Pvt Ltd, prohibiting the company from onboarding any new clients across all segments of the Multi Commodity...