The Securities and Exchange Board of India (SEBI) has imposed a Rs 4 lakh penalty on Basant Maheshwari Wealth Advisers LLP for breaching investment adviser regulations, including violations related to misleading advertising practices, CNBC TV18 reported.
A finding from SEBI’s inspection, conducted on December 29, 2023, covering the period from October 19, 2023, to December 31, 2023, was the firm’s use of exaggerated captions in its YouTube videos. SEBI’s advertising code prohibits investment advisers from making misleading claims or using exaggerated promotional content to attract investors. The firm’s marketing practices, particularly on digital platforms, were found to be non-compliant with these guidelines.
Additionally, the firm violated SEBI’s fee regulations by charging advisory fees under both an asset under advice (AUA)-based model and a fixed-fee model from 32 clients—contravening Regulation 15A of SEBI (Investment Advisers) Regulations, 2013. SEBI mandates that advisers can charge clients using only one mode per year, and any changes to the fee structure must be made after at least 12 months.
As per the regulatory order, the firm has been given 45 days to pay the fine. Failure to comply could trigger recovery proceedings, including the attachment and sale of movable and immovable assets under Section 28A of the SEBI Act.