Authority: Securities and Exchange Board of India (SEBI), Quasi Judicial Authority

Order Date: August 21, 2026

Case Overview

This final order emanates from a show cause notice dated January 01, 2026, issued to M/s Trade Nexa Research Investment Advisor (Proprietor Minakshi Asavani) (Noticee), a SEBI-registered Investment Advisor (Registration No. INA000009083). The proceedings were initiated based on findings from a surprise onsite inspection conducted by SEBI on March 05, 2024, covering the period from April 01, 2020, to December 31, 2023. The inspection revealed multiple violations of the SEBI (Investment Advisers) Regulations, 2013 (IA Regulations), the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations), and the SEBI Act, 1992.

A Designated Authority (DA) was appointed, who issued a pre-enquiry show cause notice on January 16, 2025. After considering the Noticee's reply and a personal hearing, the DA submitted an Enquiry Report on August 12, 2025, concluding that violations were established and recommending regulatory censure. A subsequent show cause notice was issued on January 05, 2026, based on this report. The Noticee submitted a reply and was granted a personal hearing on February 17, 2026.

The principal allegations and findings against the Noticee are:

  • Charging Fees Without Agreement: The inspection found 90 instances of fee-related violations. This included 74 instances where agreements were not signed by the client or the Noticee, and 15 instances where fees were collected before the agreement was formally entered into (payment date preceded agreement date). One specific instance involved a complainant, Binu Jacob (SCORES Complaint No. SEBIE/MP23/0000275/1, received April 26, 2023), from whom fees were charged and advice rendered without any signed agreement. This violated Regulation 19(1)(d) of the IA Regulations and related SEBI circulars/master circulars.
  • Failure to Maintain Call Records: The Noticee failed to maintain records of telephone interactions with clients, as mandated. During the inspection, these records were not made available to the SEBI team. The Noticee's defense that interactions were minimal and primarily via email/SMS was rejected due to a lack of supporting evidence and their own admission of non-maintenance. This violated Regulation 19(1) of the IA Regulations and related guidelines.
  • Providing Free Trial: Evidence from WhatsApp chats revealed the Noticee offered a one-day free trial to a prospective client on January 16, 2023, and provided a recommendation on the same day. This contravened SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2019/169 dated December 27, 2019, which explicitly prohibits free trials.
  • Assurance of Returns / Mis-selling: Call recordings obtained during the inspection (forwarded by the Noticee's ex-employee to the inspection team) contained promises of assured profits and loss recovery. Specific excerpts included promises like "Me aapko profit nikal kar deti hu" (I will get you profit), "Aaj hi aapko 10k nikal kar aa jayega" (You will make 10k today itself), "Daily ka profit 2k-3k nikal sakte he" (You can make a daily profit of 2k-3k), and "Loss recover karake de denge" (We will recover the loss and give it to you). This constituted mis-selling and fraudulent, unfair trade practices, violating Regulations 3(a-d), 4(1), and 4(2)(k), (o), & (s) of the PFUTP Regulations, Sections 12A(a), (b), & (c) of the SEBI Act, and Clauses 1 & 8 of the Code of Conduct under the IA Regulations.

The Noticee contested the allegations, arguing that email confirmations sufficed for agreements, call recordings were unnecessary, the free trial complaint was false, and statements about recovering losses were not guarantees but mere marketing gimmicks. These defenses were rejected based on the evidence on record. The Authority also noted that a separate adjudication order (Order/AK/GN/2025-26/31587 dated August 12, 2025) had already imposed a monetary penalty of ₹7,00,000 (Seven Lakh) on the Noticee for the same set of violations. The Noticee had not paid this penalty, leading SEBI to initiate recovery proceedings via a Notice of Attachment dated December 23, 2025.

Final Outcome

The Authority concluded that all alleged violations were established. Disagreeing with the DA's recommendation for a mere regulatory censure, the Authority imposed a stronger sanction. Under Section 12(3) of the SEBI Act, 1992, and Regulation 27(5) of the SEBI (Intermediaries) Regulations, 2008, the Noticee, M/s Trade Nexa Research Investment Advisor, is prohibited from taking on any new clients or investors for a period of one (1) month, effective immediately from the date of the order (August 21, 2026).

Topics: SEBI Enforcement, Investment Advisor Misconduct, Client Onboarding Ban