ORDER UNDER SECTION 11(1), 11(4) AND 11B OF SEBI ACT, 1992 IN THE MATTER OF PROFIT MOUNT ADVISORY SERVICE
IN RESPECT OF
| Serial No. | Name of Entity | PAN |
| 1 | Profit Mount Advisory Service (Prop: Mr. M Ashok Kumar) | AWIPA1302K |
Background
1. The present proceedings emanate from receipt of a complaint against one entity namely Profit Mount Advisory Services (hereinafter referred to as 'Noticee no. 1'/'firm') by Securities and Exchange Board of India (hereinafter referred to as
"SEBI"), subsequent to which SEBI conducted an examination with respect to the activities of the firm which led to the passing of an ex-parte ad-interim order cum show cause notice dated December 09, 2020 (hereinafter referred to as "Interim Order") against the firm and its sole proprietor Mr. M Ashok Kumar (hereinafter referred to as 'Noticee no. 2' and hereinafter collectively referred to as
"Noticees"). It was prima facie observed in the Interim Order that the Noticees were engaged in providing investment advisory services without obtaining a certificate of registration from SEBI, thereby violating the provisions of Section 12(1) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as
"SEBI Act") read with Regulation 3(1) of the Securities and Exchange Board of
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India (Investment Advisers) Regulations, 2013 (hereinafter referred to as "IA Regulations, 2013").
2. I note that the Interim Order contained the following observations with respect to the Noticees:
a. The firm was operating a website under the domain name -
https://profitmount.com/ wherein various schemes offered by the firm were advertised and the prices/fees charged were also listed out along with a link to the payment gateway for making payments for subscribing to its services. b. The firm held itself out as an Investment Advisor and collected subscription fees from investors for providing stock tips/recommendations without obtaining registration under IA Regulations, 2013.
c. From the bank accounts of the firm for the period April 16, 2015, to November 17, 2020, it was noted that a deposit of approximately INR 40.92 lakh had been made by way of 546 credit transactions in relation to the investment advisory activities carried on by the firm.
3. Accordingly, in order to protect the investors at large from the above unauthorized acts of the Noticees, to restrain the firm from continuing to act as an unregistered investment advisor, to prevent further mobilisation of funds from the innocent and gullible public and also to prevent diversion of money already collected from investors, the following directions were issued in the matter vide
the said Interim Order:
"a. Profit Mount Advisory Service and its proprietor, Mr. M Ashok Kumar are directed to:
i. Cease and desist from acting as an investment advisor including the activity of acting and representing through any media (physical or digital) as an investment advisor, directly or indirectly, and cease to solicit or undertake such activity or any other activities in the securities market, directly or indirectly, in any matter whatsoever, until further orders.
ii. Not to divert any funds raised from investors, kept in bank accounts and/or in their custody until further orders.
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iii. Not to dispose of or alienate any assets, whether movable or immovable, or any interest or investment or charge on any of such assets held in their name, including money lying in bank accounts except with the prior permission of SEBI.
iv. Immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, communications etc., physical or digital in relation to their investment advisory activity or any other unregistered activity in the securities market until further orders.
v. Not to access the securities market and buy, sell or otherwise deal in securities in any manner whatsoever, directly or indirectly, until further orders.
vi. To provide a full inventory of all assets held in their name, whether movable or immovable, or any interest or investment or charge on any of such assets, including details of all bank accounts, demat accounts and mutual fund investments, immediately but not later than 5 working days from the date of receipt of this order.
vii. To submit the number and details of clients who have availed their investment advisory services and to submit details of fees collected from each such client, immediately but not later than 5 working days from the date of receipt of this order.
viii. If Profit Mount Advisory Service or its proprietor have any open positions in any exchange traded derivative contracts, as on the date of the order, they can close out/ square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. Profit Mount Advisory Service and its proprietor are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order. b. HDFC Bank Ltd. (A/c no.: 50XXXXXXXXXX11) and Axis Bank Ltd. (A/c no.: 91XXXXXXXXXXX55) wherein Profit Mount Advisory Service is holding an account, are directed not to permit any debits / withdrawals and not to allow credits to the said accounts, without the permission of SEBI. CC Avenue where Profit Mount Advisory Service is holding an account, is directed to deactivate the said account till further orders. The
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Banks and payment gateway are directed to ensure that all the above directions are strictly enforced.
c. The Depositories are directed to ensure that till further directions not to permit any debits and not to allow any credits in the demat account of Mr. M Ashok Kumar, held jointly or individually.
d. The Registrar and Transfer Agents are also directed to ensure that till further directions the securities, including mutual fund units, held in the name of Profit Mount Advisory Service are not transferred or redeemed. Further, Registrar and Transfer Agents are also directed to ensure that till further directions the securities, including mutual fund units, held in the name of Mr. M Ashok Kumar, held jointly or individually, are not transferred or redeemed."
4. The Interim Order also called upon the Noticees to show cause as to why the services offered by them should not be held as "Investment Advisory Services" in terms of IA Regulations, 2013 and, thereby, their activity be treated as unregistered activity. The Noticees were also asked to explain as to why the appropriate directions, under Sections 11(1), 11B(1) and 11D of the SEBI Act and relevant SEBI Regulations shall not be issued, including direction for continuation of the directions already issued to prohibit them from buying, selling or otherwise dealing in the securities market, either directly or indirectly, in any manner whatsoever, for a particular period or any direction under Sections 11(1) and 11B of SEBI Act to refund the amount collected from the investors/clients.
5. I note from the records that the Interim Order was served upon the Noticees vide SEBI letter dated December 09, 2020. In response to the same, the Noticees have submitted their common reply vide letter dated December 21, 2020. Thereafter, in order to ensure due compliance with the principles of natural justice and to accord fair opportunity to defend the allegations levelled under the Interim Order, an opportunity of personal hearing was granted to the Noticees on September 21, 2021, during which Mr. M. Ashok Kumar appeared in person on behalf of the
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Noticees, via videoconferencing and reiterated the submissions made vide letter dated December 21, 2020.
6. The oral and written submissions made by the Noticees are summarized below :-
i. The investment advisory activities have already been shut down and even the office has been closed w.e.f. June 01, 2020.
ii. They had no intention of violating the provisions of any laws and the alleged violations have occurred due to the lack of awareness and understanding about the applicable laws.
iii. When the Noticees started providing investment advisory services, the IA Regulations, 2013 were not in force and there was no restriction in carrying out such activities.
iv. Only small amounts were collected for providing tips. Further, it was mentioned on the firm's website itself that investment is at the client's own risk and before making any trades the clients were advised to consult their registered investment financial advisers.
v. The Interim Order was passed without granting any opportunity to the Noticees to present their case.
vi. The Noticees in the end have denied all allegations made in the show cause notice and have stated that they have never violated any provisions of the SEBI Act or the IA Regulations, 2013.
CONSIDERATION
7. I have carefully considered the facts narrated in the Interim Order, the submissions advanced by the Noticees and other materials available on record. I note that the only issue that arises for consideration in these proceedings is whether the Noticees have acted as unregistered investment adviser in violation of the provisions of the SEBI Act, 1992 and the IA Regulations, 2013.
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8. Before moving forward to address this issue, it will be appropriate to refer to the relevant provisions of the SEBI Act and IA Regulations, 2013 alleged to have been violated by the Noticees.
SEBI Act, 1992 "Registration of stock brokers, sub-brokers, share transfer agents, etc.
12 (1) No stock broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act:
IA Regulations, 2013 "Application for grant of certificate.
3. (1) On and from the commencement of these regulations, no person shall act as an investment adviser or hold itself out as an investment adviser unless he has obtained a certificate of registration from the Board under these regulations:
Provided that a person acting as an investment adviser immediately before the commencement of these regulations may continue to do so for a period of six months from such commencement or, if it has made an application for a certificate under sub-regulation (2) within the said period of six months, till the disposal of such application."
9. I note that the present proceedings emanate from certain information received by SEBI stating that the Noticees were providing investment advisory services without obtaining registration from SEBI. Pursuant to the same, SEBI conducted an examination wherein it was prima facie observed that the Noticees were engaged in providing investment advisory services for consideration; hence, in order to prevent further loss to the investors and to protect the integrity of the securities market, the Interim Order was passed.
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10. I note from the records that the office of the firm is located at Madurai in Tamil Nadu. Further, it is noted that SEBI had examined the website hosted by the Noticee no. 1 under the address https://profitmount.com/ and it was observed that the following claims were made on the said website:-
i. We are one of the leading Stock Market advisory service companies in India, located in Tamil Nadu with an office in Bangalore. We top the ranks with our tips in the following segments:
Stock Futures Intraday
Premium Stock Futures (where you hold positions for 2 to 3 days and get top notch returns)
Intraday Stock Options (Call and Put)
Nifty Futures
Nifty Options
Commodity (MCX Bullion Intraday/MCX Bullion Premium Service) Bullion Metals
Energy Metals
Jackpot
ii. Why we provide the vast set of services above is because we know each of us is different, in terms of risk taking ability, time we can spend in front of the terminal, capital we have at this point (knowing that for sure with profit mount your capital will only multiply) and various other factors.
iii. We assure you accuracy over 94% in all our packages.
iv. We specialize in day trading strategies that looks at trading in a holistic manner, we look at over 12 triggers before a single recommendation is made to ensure our calls always work.
v. We have a set of analysts working round the clock looking not just at the Nifty and Sensex, but at the International markets and commodities markets, as they are all inter related and the ripple effect from one market filters into the other markets.
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11. On a further perusal of the website, it is observed that the firm was providing investment advisory services in the cash and commodities segment of the securities market in the form of various packages publicized on its website. Pricing of some of the packages offered by the firm as per its website was as under:
| S. No. | Package | 2 Weeks Fee (in INR) | Monthly Fee (in INR) | Quarterly Fee (in INR) | Half Yearly Fee (in INR) |
| 1. | Intraday Stock Future | 5000 | 10000 | 30000 | 60000 |
| 2. | Nifty Future | 4000 | 8000 | 24000 | 48000 |
| 3. | Premium MCX Bullion | 6000 | 12000 | 36000 | 72000 |
| 4. | Jackpot Tips | 7500 | 15000 | 45000 | 90000 |
| 5. | MCX Energy Tips | 4000 | 8000 | 24000 | 48000 |
| 6. | MCX Base Metals | 4000 | 8000 | 24000 | 48000 |
b. Some of the features of services provided by the firm, as observed from its website,
are as under:
i. Intraday Stock Future: Service Features
1. Daily 3-4 Accurate Intraday Future Tips.
2. Earn profit Rs. 5000+ in any market scenario per day.
3. 100 percent Intraday Stock Future Calls with 90% Accuracy.
4. Loss Recovery Calls will be given on same day or next day.
5. Proper follow-ups for all entry and exit calls to our paid customers.
6. Required investment is minimum Rs. 50k with 10 times exposure.
7. Calls delivery mode - SMS or G-talk.
8. Live support - 9.15AM to 3.30PM.
9. At a time Maximum 2 calls will be open. Stock Future Premium: Service Features
ii. Intraday MCX Energy Tips
1. Intraday MCX Energy Calls only will be given
2. 1 or 2 calls on daily.
3. Daily Profit Rs. 4000+.
4. Our Calls will be Genuine and Transparent with 100% Accuracy.
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12. In this respect, it is noted that the IA Regulations, 2013 define the terms 'investment advice' and investment advisor as follows
2(l) "investment advice" means "advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products, whether written, oral or through any other means of communication for the benefit of the client and shall include financial planning". Provided that investment advice given through newspaper, magazines, any electronic or broadcasting or telecommunications medium, which is widely available to the public shall not be considered as investment advice for the purpose of these regulations; 2(m) "investment adviser" means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes any person who holds out himself as an investment adviser, by whatever name called."
13. It is observed from the firm's account opening form with HDFC Bank that under the heading "Details of Activity", it is mentioned that the firm carries out
"Stockbroking Share Advisory" activity. Further, from the merchant details submitted by Avenues (India) Pvt. Ltd. (Payment Gateway: CC Avenue) to SEBI, it is observed that under the heading "Business Description", it is mentioned that the firm falls under the service category of "Advisory Service" and the "Product Description" is mentioned as "Indian National Stock Exchange Market Stocks Buy Sell Tips and Advise provider".
14. It can therefore be noted that advisory services which were being offered by the Noticees and publicized on the aforementioned website of the firm squarely falls within the definition of 'investment advice' under the IA Regulations, 2013. Further, it can be noted from the definition of 'investment adviser' that any person who provides 'investment advice' for consideration comes within its ambit. As already stated in the preceding paragraphs, the website of the firm had clearly listed out the fees being charged for the various investment advisory packages being offered. It was further provided on the firm's website that payments can be made
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to the firm's bank accounts maintained with HDFC Bank (A/c. No. 50XXXXXXXXXX11) and Axis Bank (A/c No. 91XXXXXXXXXXX55).
15. The transactions observed in the abovementioned bank accounts are summarized as under:
| Transaction Period | Bank Name and account number | No. of transactions | Amount Collected in INR |
| November 21, 2015 to November 17, 2020 | Credits by CC Avenue to HDFC Bank (A/c. No. 50200011186011) | 136 | 13,37,469 |
| April 16, 2015 to November 16, 2020 | Direct Credits to HDFC Bank A/c. No. 50200011186011 | 240 | 16,84,578 |
| October 14, 2015 to November 17, 2020 | Direct Credits to Axis Bank A/c. No.915020049484055 | 170 | 10,70,839 |
| Total | 546 | 40,92,886 |
16. From further analysis of the Bank statements, the following is observed:
i. The total credit received in the aforesaid accounts aggregated to approximately Rs. 40.92 lakh during the period April 16, 2015, to November 17, 2020.
ii. It is observed that there are 546 credit transactions received in the said bank accounts. From the narrative of those transactions, it can be concluded that the transfers were made by various investors/clients. An illustrative list of narrations in support of those credit entries found in the HDFC Bank account of the firm is as under:
| Transaction Date | Narration | Credit (INR) |
| 28/7/2017 | IMPS-720907444556-NAUSHAD I ANSARI-HDFC- XXXXXXXX2426-OPTION AND PUT | 8,000 |
| 11/9/2017 | IMPS-725421189561-DIBIN KOSHY SAMUEL- HDFC-XXXXXXXXXX7313-SUBSCRIPTION FEE | 7,000 |
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| Transaction Date | Narration | Credit (INR) |
| 15/2/2018 | 50200025945519 - TPT-PREMIUM FUTURE SANDIP | 10,000 |
| 26/2/2018 | 50200025945519 - TPT-STOCK OPTION FOR SUMIT | 8,000 |
17. In the present matter, I note that there is no dispute to the fact that the Noticees
were engaged in providing investment advisory services to the public for investment in various products pertaining to the securities market. There is also no dispute that above noted investment advisory services were provided against consideration. From the oral and written replies, it is observed that no document has been furnished to controvert the findings in the Interim Order that the Noticees were providing such advisory services and for which they had not obtained SEBI registration. The Noticees have further not disputed receiving monies from clients/investors in their reply. The defence that has been offered in this regard is that small amounts have been charged as fees from investors. Another defence advanced by the Noticees has been that they had started offering investment advisory services prior to the coming into force of the IA Regulations, 2013 when there were no restrictions on carrying out such activities or any mandate to get registered with SEBI and they were not aware about the notification of the IA Regulations, 2013 and the mandate thereunder requiring investment advisers to get registered with SEBI.
18. It is a cardinal principle of law that ignorance of the law is no excuse and same cannot be relied upon as a defence in any proceedings to avoid liability in case of breach. The IA Regulations, 2013 were notified by SEBI in the year 2013 and it come into force w.e.f. April 21, 2013. From such date, it was imperative for any person carrying out investment advisory activity to get registered with SEBI. The IA Regulations, 2013, as it stood when it was notified, had a transitionary
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provision enabling persons carrying on investment advisory activities prior to the notification of the IA regulations, 2013 to seek registration with SEBI. The proviso to Regulation 3(1), as it stood then, provided that such persons could continue to do investment advisory activity for a period of 6 months from the date of commencement of the IA Regulations, 2013 without obtaining SEBI Registration. It was further provided that in case such a person makes an application for registration before SEBI within the said six months, then they could continue with the investment advisory activity till the application is disposed of by SEBI.
19. In view of the same, I find from the perusal of the bank account statements of Noticee no. 1 that the Noticees started receiving funds for Investment Advisory Services in their bank accounts from April 2015. Therefore, the facts of the case don't support the submission of the Noticees that they had started investment advisory services prior to the IA Regulations, 2013 coming into force. Therefore, it was imperative for the Noticees to obtain registration as Investment Advisor under the IA Regulations, 2013 prior to starting their investment advisory services. However, I note that the Noticees continued receiving funds during the whole period i.e. from April 2015 to November 2020 without making any attempt to apply for registration and it was only after passing of the Interim Order that the Noticees stopped their operations as unregistered investment advisors. In this respect, the submission of the Noticees that the firm's operations were stopped w.e.f. June 01, 2020, doesn't appear to be acceptable as the firm was receiving monies in its bank accounts till November 2020. In view of the same, I do not find any merit in the contentions advanced by the Noticees.
20. The IA Regulations, 2013 were notified by SEBI in furtherance of its statutory mandate under Section 11 of the SEBI Act to protect the interest of investors in the securities market. Mandatory registration requirement under the IA Regulations, 2013 is an important safeguard put in place by SEBI to ensure that
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only registered entities, satisfying the qualification criteria and conducting business in accordance with the IA Regulations, 2013 are engaged in providing advisory services to the investors. Registration ensures that a registered Investment Advisor will carry out its activities in compliance with the terms and conditions of the certificate of registration and by fulfilling the prudential norms, risk profiling measures, disclosure and other requirements mandated under the Regulations.
21. From the aforesaid, I note that the firm, which was a sole proprietorship, was engaged in providing investment advisory services for consideration, and consequently in contravention of the provisions of Section 12(1) of SEBI Act, 1992 read with Regulation 3(1) of the IA Regulations, 2013.
22. In order to ensure the protection of investors who receive investment advice, it is imperative that any person carrying out investment advisory activities should be competent enough to deal with investors' monies and SEBI as a regulator, has made it necessary for anyone to conduct Investment Advisory service to first obtain registration after acquiring the relevant qualification, as prescribed by SEBI, and such person has to conduct its activities in accordance with the provisions of the relevant SEBI Regulations.
23. In my view, unregistered investment advisors like the Noticees in the present case can put the interest of the common investors at great risk by misleading them or misutilising their funds to the detriment of the interest of such investors as well as others in the securities market. In the present case, the Noticees, on the aforementioned website have, inter alia, mentioned that M/s. Profit Mount Advisory Services offers advices in stocks, futures and options (F&O), as well as commodity derivatives. The Noticees on their website have further presented the firm to be one of the leading stock market advisory service companies. The firm has also claimed to have topped the ranks with its stock tips in all the segments it provides advices to the investors. The firm's vision is stated to provide more than
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90% success ratio in the stock market, based on Fundamental and Technical Analysis.
24. I find it relevant to mention here that unregistered investment advisory services are a menace to the securities market and SEBI has been fighting hard to curb this evil since long. In that direction, SEBI has also enacted IA Regulations, 2013, and has been conducting investment awareness seminars throughout the country alerting the public about the mushrooming growth of unregistered investment advisors. Curbing this breed of unregistered investment advisors is a necessity to make the securities market more reliable for retail investors so that they get an opportunity to approach the persons who are qualified and eligible to give such kind of advisory service to them. Permitting the investors to receive an investment advisory service from an unregistered entity, in effect means, the same is received from an unqualified person without following the safeguards prescribed in the IA Regulations, 2013. An investor receiving a service from an unregistered investment advisor stands at a disadvantageous position in respect of his protection as an investor, as envisaged under the IA regulations, 2013 vis-a-vis an investor who receives such service from a registered investment adviser in consonance with the IA Regulations, 2013. An unregistered investment adviser is a person who has not satisfied the Regulator that he is a fit and proper person to hold the certificate of registration as an investment adviser. Availing of service from such a persons is detrimental to the interest of investors and such unqualified advisory services would result in irreparable damage, as the investors' money is invested based on advice given by an unqualified and un-regulated advisor. Exposing investors to such unauthorized and unregulated services also has the effect of interfering with the development of the securities market, as victims of such services, as well as their close ones, also tend to lose faith in the securities market. Such an injury/detriment to the development of the securities market also qualifies as an "irreparable injury". The objective of SEBI as enshrined in the SEBI
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Act is not only the protection of investors but also orderly development of securities market. Therefore, the investment advisory services should only be allowed to be dispensed by persons who are deemed fit under the IA Regulations, 2013 after following the safeguards mentioned therein.
25. As stated above, SEBI Act and IA Regulations, 2013 mandate that an investment advisor has to hold a certificate of registration to act as such. However, as already pointed out above, I find that the Noticees were not holding any certificate of registration from SEBI to act as investment advisor. The Noticees were also promising "100% Intraday Stock Future Calls with 90% Accuracy" to their prospective clients' with promised profit as high as 'INR 50000/- in any market scenario per day' knowing fully well that every investment in the securities market is subject to market risks and the said investment made by the client can also run into losses. Thus, the claims/representations made by the Noticees through their website www.profitmount.com were blatantly misleading and were made only to allure the investors to avail their unauthorized investment advisory services. The Noticees have knowingly misrepresented on their website that they (their team) are well versed in derivatives as well as with commodities. The Noticees offered the investment advisory services through various plans floated on their aforementioned website in an illegal manner to investors, with the objective of raising money from the investors by way of subscriptions to such plans.
26. I note that the materials available on record do not indicate the exact amount of fees collected by the Noticees, as a result of providing investment advice to investors in violation of the provisions of the IA Regulations, 2013. However, I find from the Interim Order that the Noticees have received total credits worth of INR 40.92 lakhs (INR 40,92,886/-) in their HDFC Bank Account and Axis Bank Account, both belonging to M/s Profit Mount Advisory Service, either directly through account transfer of funds or through various other payment mediums such as CC Avenue. I also find that these account numbers were also published
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on the abovementioned website being run by the Noticees in order to enable the investors to make payment to the Noticees.
27. Further, in view of the failure of the Noticees to provide satisfactory information related to the nature of the transactions reflected in the bank accounts mentioned above, and taking into account the packages/fees listed out for various types of services on their websites coupled with the credit entries from the bank account statements as detailed out in preceding paragraphs, I am constrained to hold that the amounts as alleged in the Interim Order are nothing but the amounts received by the Noticees, by rendering unauthorised investment advisory services. Accordingly, the sum total of all the transactions/credit entries aggregating to INR
40,92,886/- found in the bank accounts are held to have been paid by the clients into the accounts of Noticees through different channels in lieu of investment advisory services.
ORDER -
28. In view of the foregoing discussions and observations/findings about the activities engaged in by the Noticees in rendering investment advisory in an unauthorized and illegal manner, as has been established in facts & circumstances of the case, and in order to achieve the avowed object of SEBI Act, 1992, I, in exercise of the powers conferred upon me in terms Sections 11, 11(4),11B (1) and 11D, read with of Section 19 of the SEBI Act, 1992 and regulation 11 of the PFUTP Regulations, 2003, while disposing of the allegations levelled in the Interim Order cum SCN hereby direct the following:
28.1. The Noticees shall within a period of three months from the date of this Order, refund the money received from the clients/investors/complainant, as fees or consideration or in any other form, in respect of their unregistered investment advisory activities;
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28.2. The Noticees shall issue public notice in all editions of two National Dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including the details of their contact person such as names, addresses and contact details, within 15 days of coming into force of this Order;
28.3. The repayments to the clients/investors shall be effected only through Bank Demand Draft or Pay Order or electronic fund transfer or through any other appropriate banking channels, which ensures audit trails to identify the beneficiaries of repayments;
28.4. The Noticees are prevented from selling their assets, properties and holding of mutual funds/shares/securities held by either of them in demat and physical form except for the sole purpose of making the refunds as directed above. Further, the banks are directed to allow debit only for the purpose of making refunds to the clients/investors who were availing the investment advisory services from the Noticees, as directed in this Order, from the bank account of the Noticees; wherein debit has been frozen by virtue of Interim Order dated December 09, 2020;
28.5. The Noticees shall resolve all the complaints pending against them and file a report of such resolution with SEBI addressed to the Division Chief, Investment Management Department, SEBI Bhavan, Plot No. C4 A, G Block, Bandra Kurla Complex, Bandra (East) Mumbai - 400051, within a period of 30 days from the date of this Order.
28.6. After completing the aforesaid repayments, the Noticees shall file a report of such completion with SEBI addressed to the Division Chief, Investment Management Department, SEBI Bhavan, Plot No. C4 A, G Block, Bandra Kurla Complex, Bandra (East) Mumbai - 400051, within a period of 15 days, after completion of three months from the coming into force of this Order, duly certified by an independent Chartered Accountant. The
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restraint on sale of assets in paragraph 28.4 shall cease to operate once the refund to the investors is complete and the report as contemplated herein is filed;
28.7. The Noticees are debarred from accessing the securities market, directly or indirectly and are prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in any manner whatsoever, for a period of 06 (six) months from the date of this Order or till the expiry of 06 (six) months from the date of completion of refunds to investors as directed in paragraph 28.1 above, whichever is later;
28.8. The Noticees are also restrained from associating with any company whose securities are listed on a recognized stock exchange and any company which intends to raise money from the public, or any intermediary registered with SEBI in any capacity for a period of 06 (six) months from the date of this Order or till the expiry of 06 (six) months from the date of completion of refunds to investors as directed in paragraph 28.6 above, whichever is later;
28.9. The Noticees shall not undertake, either during or after the expiry of the period of debarment/restraint as mentioned in paragraphs 28.7 and 28.8 above, either directly or indirectly, investment advisory services or any other activity in the securities market without obtaining a certificate of registration from SEBI as required under the Securities Laws;
28.10. The Noticees shall not divert any funds collected from investors, kept in bank account(s) and/or in their custody except for the purpose of refund as directed in paragraph 28.1 above;
28.11. The Noticees shall not dispose of or alienate any assets, whether movable or immovable, or any interest or investment or charge on any of such assets held in their names, including money lying in bank accounts except for the purpose of refund as directed in paragraph 28.1 and until the refund is
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completed and a report as mandated under sub-paragraph 28.6 is filed with
SEBI.
29. The direction for refund, as given in paragraph 28.1 above, does not preclude the clients/investors of Profit Mount Advisory Services or of Noticee no. 2, M Ashok Kumar from pursuing the other legal remedies available under any other law, against the Noticees for refund of money or deficiency in service before any appropriate forum of competent jurisdiction.
30. This Order shall come into force with immediate effect.
31. Obligation of either of the Noticees, in respect of settlement of securities, if any, purchased or sold in the cash segment of the recognized stock exchange(s), as existing on the date of this Order, can take place irrespective of the restraint/prohibition imposed by this Order, only in respect of pending unsettled transactions, if any. Further, all open positions, if any, of either of the Noticees in the F & O segment of the stock exchange, are permitted to be squared off, irrespective of the restraint/prohibition imposed by this Order.
32. A copy of this Order shall be served upon the Noticees, all the recognized Stock Exchanges, Depositories, registrar and transfer agents and Banks for necessary compliance with the above directions.
Sd/-
Place: Mumbai S. K. MOHANTY
Date: March 28, 2022 WHOLE TIME MEMBER
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