Invest Rs 30,000, get assured Rs 24 lakh daily: An offer that got an investment advisor barred by Sebi

Synopsis

Sebi has cancelled the registration of Shilpa Garg’s Highlight Investment Research for fraud and mis-selling after she promised astronomical returns, failed to redress grievances, and went unresponsive. She is barred from offering investment advisory services.

Investment Advisor Shilpa Garg has landed in regulatory crosshairs after promising the moon to an investor and allegedly disappearing after the investor incurred losses. She had assured that an investment of just Rs 30,000 would generate a daily turnover of Rs 24 lakh — implying astronomical returns of nearly 8,000%.

Market regulator Securities and Exchange Board of India (Sebi) on Friday cancelled the registration certificate of her proprietary firm Highlight Investment Research, directing her to prominently disclose about the cancellation on the company's website. It has also barred her from holding out to be a Sebi registered investor advisor and undertake any investment advisory service.

"Considering that a registered IA and its employees/representatives, being persons associated with investment advice, are appropriately qualified and certified to provide investment advice, I find that the statements pertaining to assured high returns to the complainant constitute deliberate misrepresentation and mis-selling. The statements were made with the objective to induce the
complainant to deal in securities to earn advisory fees and, therefore, were an act of fraud," the Sebi order read.

The 16-page order came following a complaint made against her on January 28, 2022 through Sebi's Complaints Redressal System (SCORES), where the complainant alleged that she took fees for 4 months and promised assured return. It was alleged that Garg became incommunicable after the complainant incurred loss.

The complainant had transferred Rs 1.18 lakh between November-December 2019 to Garg's company.

Sebi ordered an investigation in which she was found to be violating securities norms by promising assured returns, not redressing investor grievances and not obtaining membership from BSE Administration and Supervision Limited (BASL).

The regulator also sent her a show cause notice (SCN) as to why action should not be taken against her for the alleged violations. Sebi order noted that she was unresponsive to the SCN.

Promising the moon: Excerpts from recorded call

Here are excerpts from the call:

“Single call pe kaam karke yadi apan accha profit nikal sakte hai, single time pe entry le rahe hain matlab apan single time pe risk le rahe hai market mein haina toh jaha apan 4 time risk le rahe the wi one time risk rahega aur profit use jyada his earn kar sakte hain, right!.. Kyuki momentum call pe surety base pe karenge toh apne liye quality bhi rahegi jyada best rahegi.”

“Personally aap mere saath agar working kar rahe hain to apko 80%-90% accuracy easily mil jaegi lekin fir bhi mai ye nahi bolta hu market ki wo condition jo bilkul minimum se minimum ho”

"... 50% accuracy se market ki condition kaisi bhi rahegi to apan 50% call se profit nikal sakte jo iss type se strategy bnake working krenge to mera commitment hai ki apko kabhi koi dikkt nhi aegi.”

“Toh yadi aap isme supreme services mai yadi working karte hain, jaise aap mjhe bata rahe hain 20 se 30 thousand ka investment karenge, yadi aap 30 thousand ka investment karte hain toh apna daily ka 24 lac ka turnover hoga, yadi apan 10 days ki baat kare to 2 Crore 40 Lac ka apna turn over hoga. Yadi apan 1 month ki baat karein 5 Cr ka aspass ka turnover hoga toh aur 3 month mein Jo apna turn over hoga wo 15 Crore ka turnover hoga.”

SCORES complaint

Highlight Investment Research took Rs 1.56,000 + 28% GST amounting to total of Rs 1,75,000/- as a fees and committed profit if Rs 5,00,000 within 4 months. After giving profit of Rs 5200/-the IS made loss of Rs. 50,000 in complainant’s de-mat account. After incurring losses to the complainant, the IA switched off their phones. The complainant has also sought his money to be refunded and to take strict action against that firm.

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