TaxTMI 
TaxTMI 
2024 (10) TMI 1730
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....rected against order dated November 9, 2022 passed by the WTM [Whole Time Member] inter alia directing the appellant to refund the money received from the clients as fees. 2. Brief facts of the case are, appellant is partner of a firm called M/s. MTF Digi Sales. SEBI [Securities and Exchange Board of India] received a reference from RBI [Reserve Bank of India] that the firm was collecting money from public promising rosy pictures of the share market intraday profits. A show cause notice was issued to the following four notices: (i) M/s. MTF Digi Sales (ii) Mrs. Anju Prakash Bhai Mata (iii) Shri Neeraj Kumar (iv) Shri Abin Tomy 3. Noticees No. 3 and 4 submitted a reply dated March 21, 2022 stating th....
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....the SEBI Act, 1992, hereby direct that: a) The Noticees shall jointly and severally, within a period of three months from the date of this order, refund the money received from any clients/complainants/ investors, as fees or consideration or in any other form, in respect of their unregistered investment advisory activities. It is clarified that liability of Noticee No. 2 for making refunds shall be for the fees collected till December 02, 2019 i.e. the date till when she was partner, and liability of Noticee No. 4 for making refund shall be for the fees collected from December 02, 2019 (i.e. the date when he joined as partner) till date; b) The Noticees shall issue public notice in all editions of two National Dailies (one....
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....nd maintained by SEBI; f) The Noticees are restrained from selling their assets, properties and holding of mutual funds/shares/securities held by them in demat and physical form except for the sole purpose of making the refunds/depositing balance amount with SEBI, as directed above. Further, the banks are directed to allow debit only for the purpose of making refunds to the clients/investors/ complainants who were availing the investment advisory services from the Noticees and depositing balance amount with SEBI, as directed in this order, from the bank accounts of the Noticees; g) The Noticees are debarred from accessing the securities market, directly or indirectly and are prohibited from buying, selling or otherwise dea....
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....nt had formed the partnership firm and started providing advisory services after obtaining a valid registration from the SEBI; • No misrepresentation was caused by the appellant to the clients; • Appellant had displayed the registration number on the website and as such all the investors were aware of the fact that they were dealing with a registered investment advisor; • No unlawful gain has been made by the appellant through his operations; • There is no difference whether the registration is in the name of individual or the firm as all the eligibility requirements are exactly similar; • Appellant has provided proper investment advisory service to every client for the fee ch....
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..... 10. We have carefully considered the rival contentions and pursued the records. 11. Undisputed facts of the case are appellant, Shri Neeraj Kumar applied to the SEBI for registration as an Investment Advisor vide application dated December 6, 2017 (Annexure III). 12. On October 15, 2018, appellant has entered into a partnership with Noticee No. 2, Ms. Anju Prakashbhai Mata. The capital of the firm was Rs. 1 lakh, out of which Ms. Anju Prakashbhai Mata has contributed Rs. 85,000 and appellant contributed Rs. 15,000. Clause 7 of the partnership deed shows both of them as Managing Partners. As per Clause 20, Ms. Anju Prakashbhai Mata was entitled for Rs. 40,000 as remuneration per month, whereas Shri Neeraj Kumar was entitled for Rs....
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....hasis supplied) 14. The above email clearly demonstrates that the amount was transferred from the firm's account. Admittedly, the registration was in the name of the appellant and not of the firm. Regulation 6 of the IA Regulations provides for the eligibility criteria. Regulation 6(d) deals with a firm. The first schedule to the Regulations contains the form in which an application is required to be filed. In case of a partnership firm, the names and beneficial ownership of all partners is required to be furnished. 15. Thus, the appellant having obtained the registration in his individual capacity has misrepresented as if the firm, MTF Digi Sales was the registered entity. The document Annexure IX produced by the appellant himself cl....