If you have recently opened a demat account, then you might have received a call from a real or fake advisor offering account handling in share market.
But the truth is, SEBI does not allow any registered or unregistered body to handle the account of a client. Only Portfolio Management Service providers can, and that too for the accounts with a value of ₹50 lakh or above.
However, most of the traders are unaware of this regulation and eventually end up losing money in such a fraudulent scheme.
So here comes the question, “What action does SEBI take on account handling?”
If you are a victim of any such service, then it is important to take quick action and complaint in SEBI. After a proper investigation and validation, the regulatory body takes necessary action. acc
Recently, SEBI has passed a final order against Mr. Shivprasad Pattiya and Mr. Alkesh Narware, exposing a coordinated fraud involving unauthorized trading, fake promises of algo-based profits, and account handling.
Let’s break down the case — and learn how to protect yourself.
What Action Does SEBI Take On Account Handling in India?
Now, what brings SEBI’s attention to this case?
Well, regular complaints from traders and investors.
Also, the regulatory body noticed unusual trading patterns. SEBI went deeper into the case and uncovered a deeply manipulative scheme carried out over several months between 2021–2022.
How the Scam Was Run
- A Caller Group, working for the accused, used WhatsApp messages and fake names to lure retail investors with promises of guaranteed profits through software-based trading.
- Victims were persuaded to avail trading account handling with profit sharing services, where they were asked to share(including passwords, OTPs, and SIMs).
- The accused, Mr. Shivprasad Pattiya and Mr. Alkesh Narware, formed the Operator Group. They:
- Took full control of these accounts.
- Placed coordinated trades using front entities — accounts opened in the name of daily wage earners who did not know about trading.
- Through these controlled accounts, they executed fraudulent trades in illiquid, out-of-the-money (OTM) stock options.
- They used victim accounts to buy options at inflated premiums.
- Front entities would sell the same options, locking in guaranteed profits.
- These options would always expire worthless, ensuring victims lost money and Operator Group gained.
SEBI’s Investigation and Findings
Here’s how SEBI nailed the fraud:
- Call Data Records (CDRs) and IMEI analysis showed constant communication between:
- The accused,
- The fake callers,
- And the front entity account holders.
- Front entity account holders gave statements admitting:
- They were daily wage laborers,
- They handed over their login credentials and ATM cards,
- They were paid small commissions (₹3,000–₹50,000).
- Trade analysis showed:
- Buy orders from victims were matched almost instantly with sell orders from front entities at inflated premiums.
- The options always expired OTM, resulting in 100% loss for victims and 100% gain for the accused’s network.
- Money from profits was traced to:
- The accused’s own trading and bank accounts,
- Other front entity accounts for margin funding,
- Withdrawn in cash or routed through UPI and cheque.
Final Verdict
In this case, SEBI took exemplary action under:
- Section 11 and 11B of the SEBI Act, 1992
- PFUTP Regulations, 2003 (Prohibition of Fraudulent and Unfair Trade Practices)
The Penalties Include:
- Disgorgement of profits (wrongful gains must be returned) of ₹4,83,11,996 jointly.
- Monetary penalties ₹25 lakh each under Section 15HA,
- Trading restrictions and likely market bans,
- Declaring the parties guilty of fraudulent and unfair trade practices.
Despite multiple notices, the accused did not respond to SEBI’s show cause notices or attend hearings, leading SEBI to pass an ex-parte final order, effectively confirming the charges.
How to Identify Account Handling Scams?
These scams usually follow a predictable pattern:
- You receive unsolicited WhatsApp messages with high-profit offers.
- You’re often told to share login credentials for algo/software trading.
- The person may ask to “just execute trades for you” while you sit back and earn.
- You start noticing strange trades, often in OTM options or illiquid contracts.
How to Stay Safe?
So, if you are ever approached for account handling services, then stay away from such offers and follow tips below to prevent yourself from financial losses:
- Never share your trading credentials even with friends, mentors, or so-called experts.
- Avoid “guaranteed return” schemes as they are illegal and almost always scams.
- Avail SEBI registered account handling services only from registered PMS only when your investment portfolio of ₹50 lakh or above
- If someone trades on your behalf without a PMS license, they are breaking the law.
- Keep your trading activity private and never let others operate your account.
Final Thoughts
This case is a textbook example of unauthorized account handling, and SEBI’s action is both strict and justified. When you ask, “What action does SEBI take on account handling?”, this is your answer: SEBI penalizes and bans such practices, recovers profits, and protects investor interests.
But as a trader or investor, your best defense is awareness. The moment you share your login details, you hand over your control — and possibly, your capital.
