In the stock market, where there is a lot of opportunities to trade & invest in shares of listed companies, there are a lot of service providers too. One among them is a registered Research Analyst who provides tips & recommendations to their clients.
So, just like your registered stock brokers there are Research Analysts whom you can trust and trade in the market. Now before taking any service, what do clients do?
- Ask for the details like registration number.
OR
- They check the details on the website of the firm run by RA.
These are the general steps that any client would follow before paying for advisory services, Right?
But what if, your RA instead of providing services himself, rented out his registration number and there is not one but multiple websites using his number to give advisory services.
This means the website you checked for detail might not belong to that RA. This is something that is happening nowadays and we covered one such case where Shekhar Diwedi, a SEBI registered Research Analyst has rented his registration number to 5 different websites or might be more.
We came to know about this when we received similar complaints from different victims. Now the major turn in this case was when we tried to report this case in SEBI we found all the details of the RA in the SEBI website but when tried to report it in SCORES there was no such RA name in the list.
This seemed odd and really strange.
Our team then raised the concern to SEBI Email ID by providing all the details of different victims including Sushant who lost ₹1,45,000 (₹45,000 fees + 1,00,000 loss in trade) in that scam.
Nothing much happened. But we had to file all these complaints and the SEBI RA’s name was to be displayed at SCORES.
We did something unique.
We filed an RTI and reached out to multiple Whole time members of the regulator, pointing out this gap.
Within the next 1 week, his name started appearing on SEBI’s SCORE portal.
Our team then took the next step and reported a complaint of all the victims on the SCORES portal including Sushant’s case.
Sushant came across his services on Facebook, and gave ₹45,000 as a fee for the advisory services.
As soon as the complaint was registered, the RA got paranoid. He was obviously not expecting this to happen. There is a huge chance that he was aware of this gap at the SCOREs portal. Nonetheless, he approached Sushant to refund the fees amount. He first gave an assurance on email and then after 4-5 days of filing a complaint he refunded the 100% fees amount i.e. ₹45,000 out of ₹1,45,000.
However, the loss amount of ₹1,00,000 is still not recovered and our team is still doing proper follow-ups to get recovery of the same.
Now, this leaves a question, Whom to Trust?
Honestly, no one. Always be on your toes even if you are working with a SEBI-registered entity.
In such cases, it is always better to follow your instincts and stop as soon as you identify any of the red-flags like:
- RA giving assurance of guaranteed returns.
- He offers you a profit sharing model.
- Asks for your login credentials for account handling.
- Convinces you to avail his services by showing PnL of his clients.
These are direct violations of SEBI-guidelines and your awareness of the same can protect you from losing your hard-earned money.
So stay safe & stay alert!
