SEBI cancels registration of 'research analyst' running a grocery store
What's the story
In a shocking development, the Securities and Exchange Board of India (SEBI) has canceled the registration of a so-called research analyst. The individual in question, Purooskhan, was found to be running a small grocery store in Madurai instead of providing market research or investment advice. The case came to light after SEBI received a complaint about a website promising "sure shot" calls with zero risk and doubling capital.
Case details
SEBI's investigation into fraudulent investment advisory
The complaint against the website, www.optionresearch.in, was filed on SEBI's SCORES platform in June 2022. The complainant had paid ₹50,000 as fees to avail services from this site but ended up losing nearly ₹4 lakh. After receiving this complaint, SEBI launched an investigation and issued a notice to Purooskhan. He claimed that his SEBI registration number was misused and denied any association with the website.
Investigation results
Findings on option research company
During its investigation, SEBI found that the Option Research Company (ORC) website was selling various paid investment advisory packages and claimed to be a SEBI-certified entity. It even displayed Purooskhan's registration number prominently. The regulator alleged that ORC was permitted by Purooskhan to use his research analyst registration details and that he had shared his email ID and password with them.
Allegations
Purooskhan's claims of being misled by ORC
Purooskhan claimed that G Faheeth Ali, one of ORC's partners, had approached him as a bank employee seeking to fill a research analyst position. He allegedly took photocopies of certificates and personal details from Purooskhan under this pretense. After SEBI began probing the matter, ORC reportedly issued an appointment letter to Purooskhan naming him compliance officer and authorizing him to issue trading calls, an offer he said he declined.
Regulatory action
SEBI's decision to cancel registration
Despite an earlier order where the adjudicating officer had given Purooskhan the benefit of doubt and closed the case without imposing a monetary penalty, SEBI has now decided to cancel his registration. This unusual case of a "grocery store research analyst" highlights the importance of regulatory vigilance in preventing fraudulent activities in India's securities market.