Have you ever received a message that promised “100% guaranteed profit” in the stock market, and wondered if it was too good to be true?
If you’ve been trading for even a short while, chances are you’ve seen them. The Telegram group with “zero-risk calls.” The YouTube channel is flashing screenshots of massive profits.
The WhatsApp tip that promises you’ll double your money in a month. These claims are everywhere. They’re loud, confident, and often very convincing.
But here’s the reality: in a market where returns are never guaranteed, and risk is always present, any advisory service that promises otherwise is not just misleading; it may be breaking the law.
In this blog, we cover exactly that: what makes an advisory service misleading, what SEBI has done about it, and a clear step-by-step guide on how to file a complaint and take action.
What Is a Misleading Stock Advisory Service?
Before you can report something, you need to understand what you’re reporting. Not every bad stock tip is illegal, markets are unpredictable, and even good analysts get calls wrong.
The issue is different and more serious.
A stock advisory service becomes misleading when it uses false or deceptive claims to attract investors, such as promising guaranteed profits, fabricating past performance, or operating without SEBI registration while pretending to be a legitimate entity.
Under SEBI’s Investment Advisers (IA) Regulations, 2013, and the Research Analyst (RA) Regulations, 2014, anyone who gives personalised investment advice or stock recommendations for a fee must be registered with SEBI.
This isn’t optional; it’s the law.
Operating without that registration is a direct violation, no matter how big the advisor’s Telegram channel is or how many YouTube subscribers they have.
Now that you understand the boundary between bad advice and illegal advice, here are the specific red flags you should watch for before it’s too late.
How Investors Lose Money Through Misleading Advisory Services?
SEBI’s investigations consistently find the same patterns across fraudulent advisory operations.
If you notice any of the following, treat it as a serious warning sign:
- Promises of “guaranteed returns,” “100% profit,” or “zero risk” calls in any form.
- No SEBI registration number displayed, or a fake/unverifiable registration number.
- Sharing screenshots of other clients’ supposed profits to attract new subscribers.
- Pressure tactics: “Only 5 seats left!” or “Special offer ending tonight!”
- “Account handling” where they ask for your demat login credentials or direct funds.
- Subscription fees are collected through personal UPI IDs, cash, or crypto instead of traceable banking channels.
- No formal client agreement, risk profiling, or disclosure documents.
- Operating under names like “SEBI-certified team” or “NISM-approved experts” without actual credentials.
- Profit-sharing arrangements where the advisor takes a cut of your trading gains.
Before paying for any advisory service, verify their registration on SEBI’s official website under the Investment Advisers or Research Analysts section.
Every legitimate IA carries a registration number starting with “INA”, and every RA with “INH.” If you can’t find the entity there, step back.
Recognising the warning signs is important, but taking action matters just as much.
If you believe a stock advisory service has misled you, made prohibited promises, or violated SEBI regulations, there are formal channels available to report the issue and seek resolution.
SEBI Action Against Misleading Stock Advisory Services
SEBI doesn’t just issue warnings; it takes concrete enforcement action. Here are three recent cases that every Indian trader should know about.
These cases show exactly what the regulator considers a violation, and what consequences follow.
1. Lifeinspire Knowledge Solutions Private Limited
Entity Involved: Lifeinspire Knowledge Solutions Pvt Ltd (LKSPL) & its Directors, MS Ahammed Ali & MS Mohammed Ali
- Website: bankniftyoption.in.
- Period of Misconduct: September 2020 – 2024.
- Total Penalty: ₹35 Lakh (LKSPL & directors combined).
- Refund Ordered: ₹1.83 Crore (jointly & severally).
- Market Ban: 2 Years for the company & both directors
SEBI’s investigation, which began while looking into a related entity, Option Research Consultancy, found suspicious credits flowing into LKSPL’s bank account.
The company’s website openly advertised investment advisory packages, promising returns as extraordinary as “₹30 lakh to ₹1 crore per month” along with claims of “200% profit calls.”
Violations found: Unregistered investment advisory (Section 12(1), SEBI Act & Regulation 3(1), IA Regulations, 2013), fraudulent and misleading claims (PFUTP Regulations, 2003 – Regulations 3, 4(1), 4(2)(k)).
If SEBI has ordered a refund, affected investors should monitor SEBI’s official website and the public notices directed to be published by such entities for details on the refund process and contact information.
2. Abhishek Kumar Singh: Supreme Investrade and Research Services
Entity Involved: Abhishek Kumar Singh research analyst, Proprietor, Supreme Investrade and Research Services (Reg. No. INH000008747)
- Registration No.: INH000008747
- Category: Registered Research Analyst (RA)
- SEBI Order Date: December 15, 2025
- Nature of Order: Adjudication Order (AO)
- Total Penalty: ₹2,00,000
SEBI initiated adjudication proceedings against Supreme Investrade and Research Services following findings of non-compliance with Research Analyst Regulations.
The order was issued despite the firm holding a valid SEBI Research Analyst registration, underscoring that registration does not exempt an entity from ongoing conduct obligations.
SEBI’s investigation found that the firm was circulating screenshots of other clients’ profits through its communication channels to attract new subscribers.
SEBI clarified that this practice crosses the line between a legitimate research recommendation, which must include a buy or sell call with a defined target and stop-loss, and misleading promotional activity designed to entice prospective clients through selective and potentially unverifiable profit claims.
Violations Found: Non-compliance with Research Analyst Regulations, including conduct and advertising norms applicable to SEBI-registered Research Analysts; misleading promotional practices through profit screenshot circulation.
Being SEBI-registered does not exempt an entity from compliance obligations. Research analysts must follow strict advertising and conduct norms, and violations attract adjudication proceedings regardless of registration status.
3. Yash Garg: Yash Trading Academy (YTA)
Entity Involved: Mr. Yash Garg, Proprietor, Yash Trading Academy (YTA)
- Telegram channels: YTA Premium, Yash Trading Academy, Intraday Blaster
- Period of Misconduct: November 2019 – April 2023
- Fees Collected: ₹92.98 Lakh from investors
- Penalty Imposed: ₹16 Lakh (₹10L for fraud + ₹6L for regulation violations)
- Market Ban: 2 Years (or until full refund completed, whichever is later)
Yash Garg ran a network of Telegram channels where he offered paid trading tips, charged subscription fees (₹5,000/month to ₹25,000/month), and provided “account handling” services, including direct demat account access and profit-sharing arrangements where he retained up to 50% of clients’ gains.
He falsely projected himself as SEBI-registered while making claims of “100% guaranteed profit” and promoted a 50/50 profit-sharing model.
SEBI found that “account handling”, managing client funds and demat accounts, squarely falls under Portfolio Management Services, which requires separate registration.
Paid trading calls constitute investment advisory services, also requiring SEBI registration. Garg had neither.
He failed to respond to SEBI’s show cause notice, so SEBI proceeded on the available evidence, ordering him to refund the entire ₹92.98 lakh within three months and publish a public refund notice in national newspapers.
Violations found: Unregistered investment advisory (IA Regulations), unregistered portfolio management (PMS Regulations), fraudulent and unfair trade practices, including guaranteed profit claims (PFUTP Regulations, 2003).
These cases, each different in scale and structure, all point to the same lesson: misleading advisory services exist across the spectrum, from anonymous Telegram groups to registered analysts who push boundaries.
The common thread is investor harm. And the most powerful tool against that harm is you, the investor, choosing to report it.
How to File a Complaint Against Misleading Stock Advisory Services?
If you’ve encountered a misleading advisory service, or worse, lost money to one. You have a clear path to complain. SEBI’s complaint mechanism is accessible, trackable, and has actual teeth.
Here is how to use it effectively.
Step 1: Collect All Evidence First
Before filing anything, gather your proof.
This includes screenshots of the Telegram/WhatsApp messages, any advertisements making profit claims, payment receipts, transaction records from your bank showing fees paid, any agreements or contracts signed, and records of actual trades executed based on the tips.
The stronger your evidence, the stronger your complaint.
Step 2: Verify the Entity’s Registration Status
Visit sebi.gov.in and check the “Intermediaries” section. Search for the name or registration number of the advisory service.
If they claim to be registered but their name doesn’t appear, that itself is a violation you should mention in your complaint.
Step 3: Approach the Entity Directly First
SEBI expects complainants to first attempt resolution with the entity itself. Send a written complaint via email to their official grievance address. Keep a record of when you sent it and what response (if any) you received.
If they don’t respond within 30 days or the response is unsatisfactory, you are ready to proceed to SEBI.
Step 4: File a Complaint in SCORES
Visit: scores.sebi.gov.in. SEBI’s official Complaints Redress System. Create an account using your email ID and mobile number.
After registration, log in, navigate to “Lodge a Complaint,” select the correct category (Investment Adviser, Research Analyst, or Unregistered Entity), and fill in all details clearly.
Attach your evidence.
You will receive a unique complaint number for tracking.
If SCORES does not resolve the matter satisfactorily, SEBI itself may initiate a formal examination if the complaint reveals serious regulatory violations.
Step 5: Register a Complaint with SMART ODR
If SCORES fails to produce a satisfactory outcome, move to SMART ODR, SEBI’s Online Dispute Resolution platform for structured conciliation and arbitration between you and the stock advisor.
SEBI mandates that all registered entities participate. Many investors recover advisory fees at this stage through conciliation settlements, avoiding the time and complexity of full arbitration proceedings.
Step 6: Stock Market Arbitration
If all prior steps fall short, file for formal arbitration where an independent panel reviews your documented evidence and delivers a legally binding award.
Investors should promptly report any suspicious, misleading, or non-compliant advisory practices, as timely complaints can help regulators examine the issue and take appropriate action.
In several instances, regulatory intervention by SEBI has played an important role in addressing investor grievances and improving accountability within the advisory industry.
Now, let’s look at some SEBI actions against misleading stock advisory services.
Need Help?
Trying to report a misleading or non-compliant stock advisory service on your own can quickly become confusing and stressful.
From gathering evidence and identifying regulatory violations to filing complaints with the right authorities, the process often feels overwhelming for investors already dealing with financial losses.
Our team helps simplify the entire process and supports you at every stage of the complaint journey.
Register with us today and take the first step toward reporting misleading stock advisory practices professionally, strategically, and with the support you need.
Conclusion
India’s market regulator has been sending a consistent message through its enforcement actions: there is no place for guaranteed profit claims, unregistered advice, or misleading marketing in the securities market.
The cases of Lifeinspire Knowledge Solutions, Supreme Investrade, and Yash Trading Academy show that SEBI is watching, on Telegram, on websites, on YouTube, and it acts.
But SEBI cannot be everywhere at once. When traders report suspicious services, investigations begin. When investors file complaints on SCORES, data gets built.
When enough people speak up, enforcement follows. Your complaint is not a small thing; it is part of how the market gets cleaner.
So if something doesn’t feel right about an advisory service you’ve used or seen, trust that feeling. Verify the registration. Save your evidence. And report it. You have the tools. Use them.
