Authority: Securities and Exchange Board of India (Quasi Judicial Authority - Biju S)

Order Date: July 31, 2026

Case Overview

This final order arises from a remand by the Securities Appellate Tribunal (SAT) in its order dated August 21, 2025. The matter concerns Mr. Mohit Gupta (Proprietor of Safe Trading, PAN: BZIPG8092C) who was found to be operating as an unregistered investment advisor and engaging in fraudulent practices.

SEBI's original order dated March 27, 2025 had found that the Noticee: (1) acted as an investment advisor without registration certificate in violation of Section 12(1) of SEBI Act read with Regulation 3(1) of SEBI (Investment Advisers) Regulations, 2013; (2) collected funds from investors by fraudulently assuring guaranteed returns in violation of Section 12A(a), (b), (c) of SEBI Act and Regulations 3(a), (b), (c), (d), 4(2)(k), and (s) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market), 2003.

The original order directed the Noticee to refund ₹23,94,574.50 to investors, debarred him from accessing securities market for 1 year or until repayment (whichever later), imposed ₹5,00,000 penalty under Section 15HA, and ₹1,00,000 penalty under Section 15EB of SEBI Act.

The Noticee appealed only the ₹5 lakh penalty under Section 15HA to SAT. SAT sustained the refund direction and ₹1 lakh penalty, but remanded only the Section 15HA penalty issue back to SEBI for reconsideration with opportunity of hearing.

SEBI provided hearing notice for February 5, 2026, and the Noticee's Authorized Representatives appeared and made submissions. The Noticee claimed: (1) discriminatory invocation of Section 15HA compared to 55 warning letters issued to similar individuals; (2) absence of proportionality as Section 15HA should apply only to serious fraud cases; (3) ignorance of law due to youth and lack of formal education.

Final Outcome

SEBI upheld the ₹5,00,000 penalty under Section 15HA of SEBI Act. The authority found that: (1) the Noticee admitted violations by not challenging the underlying findings; (2) the principle of negative equality cannot be claimed as established by Supreme Court in Kotak Mahindra case; (3) ignorance of law is not a valid defense; (4) the Noticee's failure to refund investors despite 8 months since original order and 3 months since SAT order was an aggravating factor; (5) Supreme Court precedent requires imposition of minimum statutory penalty under Section 15HA, which is ₹5 lakh.

The Noticee must pay the penalty within 45 days through SEBI's online payment portal. The order is effective immediately and copies have been sent to stock exchanges, banks, depositories, and mutual fund registrars for compliance.

Topics: Unregistered Investment Advisory, SEBI Penalty