SEBI Slaps Rs6 Lakh Penalty on Eqwires Research Analyst and Partners for Regulatory Violations

Moneylife Digital Team 14 August 2025

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs6 lakh on Eqwires Research Analyst (Eqwires) (noticee 1) and its partners, Bansri Pankajbhai Thakkar (noticee 2) and Pranay Dineshbhai Morakhiya (noticee 3). The penalty follows multiple violations of securities laws, including misrepresentation, unauthorised investment advisory activities and operating a client’s trading account.

In an order, Amit Kapoor, adjudicating officer (AO) of SEBI, emphasised that registered intermediaries are under a statutory obligation to comply with applicable circulars, rules and regulations. He stated that the purpose of these regulations is to deter wrongdoing and promote ethical conduct in the securities market, adding that a suitable penalty was necessary to ensure greater care in the future.

SEBI inspection of Eqwires Research Analyst’s registered office covered the period from 1 April 2020 to 25 November 2021.

Despite being registered only as a research analyst (RA), Eqwires promoted itself as an ‘investment advisor’ and a ‘SEBI registered advisory company’ across its website, Telegram channel and client communications. Payments received were often labelled as advisory fees or charges for market tips. The firm also issued client-specific trading recommendations without necessary disclosures, which amounted to investment advisory services requiring separate registration. SEBI rejected the defence that such references were accidental or due to system limitations.

The regulator also found that Eqwires had operated a client’s trading account for nine months using login credentials provided through an ‘authorisation letter’ prepared by the firm. This was presented as an ‘add-on service’ when the client indicated she lacked time to trade.

SEBI noted that RAs are prohibited from handling clients’ accounts or funds. Although an allegation of pressuring a client’s relative to remove a negative review could not be proven, the act of managing a client’s account was deemed a clear violation of Regulation 13(i) and the RA Regulations’ Code of Conduct.

Further, Eqwires was found guilty of publishing fabricated client testimonials on its website and social media platforms, including Quora. These testimonials, created by paid marketing agents and unrelated to actual clients, portrayed inflated profits and exaggerated satisfaction. SEBI classified this as deliberate misrepresentation designed to mislead potential clients, constituting ‘fraud’ under the PFUTP Regulations.

Eqwires defence that these testimonials were handled by an external agency or predated SEBI’s April 2023 circular on misleading testimonials was dismissed. SEBI clarified that registered intermediaries are expected to uphold honesty and integrity at all times, regardless of when or by whom such content was created.

As partners of Eqwires during the inspection period, Ms Thakkar and Mr Morakhiya were found equally liable under Section 27 of the SEBI Act. This provision holds partners responsible for violations committed by the firm when they are in charge of its operations.

The adjudicating officer concluded that all three noticees had engaged in conduct detrimental to investor protection. Consequently, a cumulative penalty of Rs6 lakh was imposed to deter similar misconduct in the future.

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