2024 (6) TMI 1522 - AT - SEBI

Order on unregistered investment advice partly upheld, quantum remanded, appellants to deposit admitted Rs 60 lakh

SAT upheld SEBI's findings that appellants had provided unregistered investment advisory services and affirmed the directions in the impugned order. ... Seeking liberty to produce the evidence before the SEBI - Unregistered investment advisory services - no documentary proof of source -​​​​​​​ limitation - monies received under various different services - HELD THAT:- While affirming the violations and directions issued by the SEBI in the impugned order, we remit the matter to WTM only on the question to decide as to what is the actual amount that was received by the appellants towards the investment advisory services. Appellant shall be at liberty to produce evidence within an outer limit of two months from today and thereafter the WTM shall pass an order within an outer limit of three months. Learned Advocate for the SEBI, submitted that the appellants have admitted receipt of about Rs. 60 lakh as monies received from investment advisory services. Since it is the admitted sum the same may be secured pending consideration of the appellants case by the WTM. The submission is fair and accepted. Accordingly, we direct that the appellants shall place a sum of Rs. 60 lakh in a fixed deposit in a nationalized bank with a lien marked in favour of SEBI within a period of four weeks from today. Having considered the appeals on both delay and merits, the same is disposed of with the aforesaid directions. Appellants challenged the WTM, SEBI order dated 29.11.2022; appeals heard together and similarity to Appeal No. 171 of 2023 acknowledged. Undisputed facts: first appellant is an unregistered investment advisory company, connected appellants are directors, and SEBI alleges Rs. 6.13 crore in the bank account with no documentary proof of source. Tribunal affirmed the 'violations' and directions in the 'impugned order' but remitted the matter to WTM 'only on the question to decide as to what is the actual amount that was received by the appellants towards the investment advisory services.' Appellants are granted 'liberty' to produce evidence within an outer limit of two months; WTM to pass order within an outer limit of three months thereafter. As appellants admitted receipt of about Rs. 60 lakh, the Tribunal directed that Rs. 60 lakh be placed in a fixed deposit in a nationalized bank with a lien in favour of SEBI within four weeks. Appeals disposed of on delay and merits; pending applications disposed; no costs.