Market regulator Securities and Exchange Board of India (SEBI) has issued a regulatory censure against Investopher Research Services Pvt Ltd, a SEBI-registered research analyst (RA), for making misleading claims and failing to comply with key regulatory requirements. The action follows an inspection and enquiry process initiated under the SEBI Intermediaries Regulations, 2008, based on an enquiry report submitted by the designated authority (DA) on 13 December 2024.
In an order, Amarjeet Singh, whole-time member (WTM) of SEBI, says, “I find it pertinent to note that although Investopher Research Services had made misleading claims on its website, it has, as on date, taken corrective measures to rectify the same. Thus, I am of the view that issuing a regulatory censure to the RA would be commensurate with the violations committed by Investopher Research Services.”
SEBI conducted an inspection of Investopher Research Services operations for the period from 1 April 2022 to 31 January 2024.
During the inspection, one of the key issues identified was a misleading claim made on the Investopher Research Services website. In the frequently asked questions (FAQ) section, the company had described itself as the ‘Best SEBI registered Research Analyst’, a self-proclaimed assertion that was not supported by any formal recognition or evidence.
SEBI observed that such a statement had the potential to mislead investors into believing the firm had an officially endorsed status or superior standing compared to its peers. Although Investopher Research Services argued that the claim did not influence investor decisions and that no complaints had been received, it acknowledged the presence of the claim and confirmed that it had been removed from the website.
Despite the removal of the statement, SEBI emphasised that registered entities must avoid making promotional claims that could create a false impression among investors. The regulator held that the RA, as a SEBI-registered intermediary, was expected to maintain a high standard of conduct in all its public communications.
Another serious compliance issue emerged during SEBI’s onsite inspection of Investopher Research Services' registered office in Mumbai. The office was found to be non-functional, with no research analyst activity taking place. At the time of inspection, the office was closed, had no signage displaying the company’s name, and only four employees were present.
Furthermore, SEBI found that several desks were occupied by individuals from unrelated entities, suggesting that the co-working space was not exclusively being used by Investopher Research Services. The company stated that its core research and accounting functions were based in Mumbai, while the Indore office managed client services. However, this explanation did not satisfy SEBI, which concluded that the company’s actual operations were based in Indore.
Importantly, Investopher Research Services had failed to inform SEBI about this shift in its principal place of business a material change that should have been disclosed in accordance with regulatory norms. This omission was found to be in violation of Regulation 13 and Regulation 24(2) of the SEBI (Research Analysts) Regulations, 2014, along with several clauses of the Code of Conduct applicable to registered research analysts.
Last year in March, SEBI slapped a penalty of Rs7 lakh on the Indore-based RA for non-compliance. In its investigation, SEBI found that the noticee committed serious contraventions, including non-disclosure of the material change in the principal place of business, non-usage of the term RA in the correspondences, and failure to act with honesty and good faith. (Read:
SEBI Slaps Rs7 lakh Penalty on Investopher Research Services for Non-compliance)
