Using its newly-granted powers to access call data records and conduct surprise visits, capital markets watchdog Sebi has unearthed a large-scale SMS scam wherein fraudsters were luring gullible investors with promise of daily returns of up to Rs 75,000 through mobile messages.
As an interim measure, Sebi has restrained two individuals and four entities associated with them from direct or indirect dealings in securities markets till further direction, while they have also been asked to cease and desist from acting as investment advisors and portfolio managers.
Besides, they have also been asked to immediately withdraw and remove all their advertisements, representations, websites and other materials in relation to their advisory services.
Sebi swung into action last month after it noticed that certain entities were offering intra-day tips and stock advisory services through Short Message Services (SMSs) via mobile phones.
The messages being circulated by them included promises of Rs 5,000-75,000 daily earnings in "equity and MCX market with our confirm intraday tips" and the investors were asked to call on given numbers for "sure shot call".
After noticing these messages, Sebi began its investigation and obtained details of the call data records of the telephone numbers used for sending such SMSs.
Thereafter, Sebi conducted a surprise visit on the premises of one Imtiyaz Hanif Khanda and his maternal uncle Vali Mamad Habib Ghaniwala.
This is the first major case where Sebi has used its newly granted powers to access call data records of suspected persons, which it has got through changes made in the regulations governing the securities markets through an Ordinance. Besides, Sebi has also got powers to conduct search and seizure operations, among others.
Passing an order against in the present case, Sebi said its investigations prima-facie found that the said persons through their proprietary concerns, Right Trade, Sai Traders, Bull Trader and Laxmi Traders, were providing unauthorised investment advice.
Besides, Right Trade was also soliciting business of portfolio management services from the general public without being registered as a portfolio manager. The entities had also made misrepresentations by making unrealistic claims, false statements such as having office in various countries, FII based calls, jackpot calls, etc.
"They also made representation in reckless and careless manner in their messages and website suggesting facts which
are not true," Sebi said.
Sebi said the entities "were engaged in providing intraday tips for a consideration/profit sharing under a plan under which the trading