SEBI Bans Ajay Kumar Chaddha for 2 Years from Markets for Providing Illegal Investment Advisory
Moneylife Digital Team 08 August 2024
Market regulator Securities and Exchange Board of India (SEBI) has barred Ajay Kumar Chaddha (noticee) for two years for providing illegal investment advisory services. While slapping a fine of Rs6 lakh, SEBI also asked Mr Chaddha to refund over Rs25 lakh collected as fees from clients or investors.
 
In the order, G Ramar, chief general manager (CGM) of SEBI, says, "The scheme employed by the noticee to induce unsuspecting investors to deal in recommended stocks by claiming that his advice had the accuracy of 80%-85% while not having the minimum qualification required for an investment adviser (IA) under the IA Regulations, is fraudulent in nature. Further, noticee, by assuring guaranteed returns by investing in shares, has violated the fundamental canon of the securities market, i.e. investments are subject to market risks and therefore, has knowingly misled the investors at large by engaging in acts, practices, course of businesses which operated as 'fraud' as defined  under Regulation 2(1)(c) of the PFUTP Regulations."
 
SEBI received a complaint against Mr Chaddha for providing intra-day calls without SEBI registration. The complainant shared Mr Chaddha's account details and WhatsApp chat screenshots. It was found that Mr Chaddha charged Rs950 monthly for premium equity calls, claimed 80%-85% accuracy, and shared his bank account details for payments. 
 
SEBI further observed that on the mentioned account, Mr Chaddha had 3,241 credit transactions totaling Rs41.72 lakh. Out of these, 316 transactions amounting to Rs3.11 lakh included words like tips, crude, services, stock, options, banknifty, commodity, trading, equity, MCX, rocket and premium. Most of these transactions were around Rs950, matching the cost of packages offered by Mr Chaddha.
 
The CGM of SEBI, Mr Ramar, also noted that the disputed Telegram group created by Mr Chaddha had around 35,000 members. This sizable operation has the potential to fraudulently mislead a large number of unsuspecting investors into dealing in securities.
 
"Mr Chaddha shall not undertake, either during or after the expiry of the period of restraint and prohibition, either directly or indirectly, investment advisory services or any activity in the securities market without obtaining a certificate of registration from SEBI as required under the securities laws," the market regulator says.
 
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