Markets regulator Sebi on Wednesday said trading restrictions on Capital Stroke Investment Services and three persons will remain in place in a case related to flouting investment adviser rules. The latest order has been issued after assessing whether its directions passed against these entities in August 2021 need to be confirmed, revoked or modified.
“No case is made out by the noticees (Capital Stroke and three persons) to revoke or modify the directions contained in the interim order, therefore, I hereby confirm the directions issued against the noticees in the interim Order, which shall remain in force till further orders,” Sebi Whole-time member Anant Barua said in his confirmatory order. In its interim order, Sebi had asked Capital Stroke and three persons — Upendra Singh Rajput, Prashant Singh Baghel and Kamlesh Dhole — not to access the securities market and buy, sell or otherwise deal in securities or associate themselves with securities market, directly or indirectly.
Among other restrictions, they were asked to cease and desist from acting as investment advisers. After conducting an inspection in relation to the affairs of Capital Stroke, during November 2020, Sebi had found that it made false and misleading representations by promising assured profits and returns to clients. Besides, it charged unfair and unreasonable fees from clients. After conducting an inspection in relation to the affairs of Capital Stroke, during November 2020, Sebi had found that it made false and misleading representations by promising assured profits and returns to clients.
“The interim order has held that noticee no. 2, 3 and 4 (Rajput, Baghel and Dhole) are in charge of operations and compliance of Capital Stroke. I also note that the noticees have not disputed this finding of the interim order. “Thus, for the violations of provisions of Sebi Act 1992, Sebi (PFUTP) Regulations 2003 and IA Regulations, by noticee no. 1 (Capital Stroke) I prima facie find that noticee no. 2, 3 and 4 have failed in ensuring the maintenance of appropriate standards of conduct of noticee no. 1, thereby violating provision of …the Code of Conduct as mentioned in …IA (Investment Adviser) Regulations,” Barua added. “Thus, for the violations of provisions of Sebi Act 1992, Sebi (PFUTP) Regulations 2003 and IA Regulations, by noticee no. 1 (Capital Stroke) I prima facie find that noticee no. 2, 3 and 4 have failed in ensuring the maintenance of appropriate standards of conduct of noticee no. 1, thereby violating provision of …the Code of Conduct as mentioned in …IA (Investment Adviser) Regulations,” Barua added.
