Excerpt from Moneylife Article, Published on Aug 19, 2024.
Market Regulator Securities and Exchange Board of India (SEBI) has imposed a hefty fine of Rs39 lakh on Podium Market Research proprietor Suman Kumar, along with associated individuals Prakash Kumar and Roshni Kumari, for multiple regulatory violations. This action underscores SEBI’s commitment to maintaining the integrity of the securities market and protecting investor interests.
The violations encompass several critical areas, including lapses in certification, improper record-keeping, excessive fee collection, breaches of confidentiality, and fraudulent Goods and Services Tax (GST) practices. According to Barnali Mukherjee, SEBI’s adjudicating officer, these non-compliances highlight a failure in fiduciary duties and warrant substantial penalties.
One primary issue was Suman Kumar’s expired National Institute of Securities Markets (NISM) certification. From October 22, 2022, to February 26, 2024, Kumar’s certification lapsed, violating Regulation 15(13) of the SEBI Investment Advisers (IA) Regulations. Additionally, SEBI found significant deficiencies in record-keeping, with Kumar unable to provide client agreements for registrations since April 2021, revealing a critical compliance failure.
Kumar was also found to have collected fees exceeding Rs1.25 lakh from seven clients, a breach he did not contest. SEBI’s inspection further revealed serious confidentiality breaches, with clients reporting fraudulent activities from unregistered email addresses. This failure to maintain client confidentiality was a major concern.
SEBI discovered that Kumar collected GST from clients without proper registration during FY18-19 and FY19-20, a practice deemed fraudulent. Despite attributing this to guidance from a GST consultant, Kumar admitted to the breach.
Investigations uncovered fraudulent activities involving Prakash Kumar, a relationship manager, and Roshni Kumari, who provided back-office support. They, along with Suman Kumar, engaged in a scheme that deceived clients about refunds related to investment advisory fees and GST payments. This included creating fake email IDs to impersonate SEBI and mislead clients.
SEBI imposed a fine of Rs25 lakh on Podium Market Research led by Suman Kumar. Prakash Kumar and Roshni Kumari each face a penalty of Rs7 lakh. This action serves as a stark reminder of the critical importance of regulatory compliance in maintaining the integrity of the securities market and protecting investor interests.
To delve deeper into this topic, please read the full article on Moneylife.
