Global Advisors was involved in providing unauthorized investment advisory (UIA) services.
MUMBAI (India CSR): In a groundbreaking ruling, the Securities and Exchange Board of India (SEBI) has ordered Global Advisors to refund an estimated INR 73,87,303 that the firm had accrued through unauthorized investment advisory services.
This stern action demonstrates SEBI’s commitment to protecting the rights of investors, particularly those most vulnerable in the securities market.
The decision, according to the regulatory body, will help compensate investors who had been drawn into Global Advisors’ unauthorized schemes. The money, amassed in three bank accounts, must be returned within a three-month window, according to the SEBI order.
SEBI had received complaints dated October 17, 2020, and October 19, 2020, wherein it was stated that the complainant had lost INR 60,000/-in trading based on the tips provided by Global Advisory, SEBI Order said.
“As per the intermediary database on the SEBI website, Noticeeswere (Global Advisors) not registered with SEBI in any capacity.”, SEBI said.
To ensure transparency and efficiency, Global Advisors must publicize the modalities of refunds, including contact details of the assigned person, in national dailies and local newspapers. Refunds will be executed through bank demand drafts, pay orders, electronic fund transfers, or other traceable banking methods.
Global Advisors has also been ordered to resolve all pending complaints and submit a report to SEBI within 30 days. Following this, the firm must file a completion report, verified by an independent chartered accountant, providing details of the refunds made.
Any remaining balance after making these refunds will be kept in an escrow account for one year for potential redistribution to clients or investors. After that period, the remaining amount will be deposited in the Investor Protection and Education Fund maintained by SEBI.
Unauthorized investment advisory services
As part of the order, Global Advisors is barred from selling any of their assets, including mutual funds, shares, or securities, except for the purpose of making the mandated refunds. Banks have been instructed to only allow debits from the firm’s bank accounts for the purpose of refunding clients and depositing the balance amount with SEBI. The restriction on the sale of assets will be lifted once the refunds are complete and the completion report is filed with SEBI.
Who is Vusa Ravi?
Vusa Ravi is the proprietor of Global Advisors. Based on the GST registration certificate it was noted that the certificate was obtained under the trade name of Global Advisors on July 16, 2019, while Global Advisor was registered as a commercial establishment under the Karnataka Shops and Commercial Establishments Act, 1961 on August 20, 2019.
The website is not currently active
The website of the firm, www dot globaladvisors dot in was created on August 30, 2019. Though the website is not currently active, from the cached pages of the website it was noted that the firm was offering various investment advisory packages in equity and derivative segment of the stock market, SEBI order said. The site was active till October 28, 2021.
Who is M Nithin Raj?
It was noted that some investment advisory fees were credited to the bank account of one Nithin Raj who as per the submission of the proprietor of the firm was an employee of the firm.
It was noted that Vusa Ravi and Nithin Raj had cumulatively collected fees in the amount of INR 33,35,576 vide 192 transactions during the period July 25, 2019, to November 30, 2020.
SEBI Findings
“….it is evident that the Noticeeshave knowingly engaged themselves into activities with the sole objective of fraudulently misleading the gullible investors to play with their hard-earned money by making them follow their random stock tips which were provided to them by the Noticees, without the backing of any research or any risk profiling of clients or any qualification of the staff to perform the job of an Investment Advisor. In fact, they have successfully conducted such unauthorized advisory activities for a quite long period of time until they stopped after receiving a letter dated November 19, 2020, from SEBI.” SEBI Order said.
“In view of the aforesaid discussion, I find that a cumulative amount of INR 73,87,303 (INR 31,71,196 +INR 24,63,901 + INR 17,50,206) is the amount collected by Global Advisors by way of subscription towards its unauthorized investment advisory services.”, order revealed.
