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

Order Date: September 30, 2026

Case Overview

The proceedings emanate from a surprise onsite inspection conducted by SEBI on M/s Eqwires Research Analyst (SEBI Registration No. INH000007465) from November 22-25, 2021, covering the period from April 1, 2020, to November 25, 2021. The inspection revealed multiple violations of SEBI regulations, leading to enquiry proceedings and the issuance of a show cause notice dated January 5, 2026, under Regulation 27(1) of the SEBI (Intermediaries) Regulations, 2008.

The principal allegations against the Noticee included:

1. Publishing false and misleading testimonials on its website and social media platforms (Quora, Telegram, etc.), where individuals depicted as clients provided glowing reviews and claims of significant profits, which the Noticee admitted were bogus and managed by a paid marketing agency.

2. Handling/operating the trading account of a client, despite being registered only as a Research Analyst, an activity not permitted under the SEBI (Research Analysts) Regulations, 2014.

3. Potential holding out as an Investment Adviser without registration, based on website content and payment narrations from clients using terms like "advisory service" and "market tips."

The Designated Authority (DA) in the enquiry report dated August 13, 2025, concluded that violations of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations) and the SEBI (Research Analysts) Regulations, 2014 (RA Regulations) were established. The DA recommended the issuance of a regulatory censure.

The Noticee submitted replies and was granted a personal hearing. Key defenses included:

  • The false testimonials were managed by a third-party agency and were removed upon SEBI's inspection; no clients were onboarded based on them.
  • Handling of a client's trading account was a rare instance facilitated by an authorization letter and did not involve fees; the prohibition was explicitly introduced by SEBI later.
  • The use of the term "advisory" in payment narrations was client-driven and did not reflect the actual nature of the services (research recommendations).
  • A separate adjudication order (Order/AK/DS/2025-26/31592-31594 dated August 13, 2025) had already imposed a monetary penalty of ₹6 lakh on the Noticee and its partners for similar violations, which had been paid.

SEBI considered the matter and noted that the violations of PFUTP Regulations (specifically Regulation 3(a),(b),(c),(d) and Regulation 4(2)(k),(r),(s)(i)) were established due to the knowing misrepresentation through false testimonials to attract clients. However, on the allegation of acting as an unregistered Investment Adviser, SEBI gave the Noticee the benefit of the doubt due to insufficient evidence of risk profiling or suitability assessments. The handling of the client trading account was confirmed as a violation of RA Regulations.

A supplementary show cause notice was issued seeking disgorgement of fees collected (₹2.29 crore), but SEBI concluded that no quantifiable disproportionate gain or client loss was established, and the demand for refund was not sustained.

Final Outcome

SEBI issued a regulatory censure against M/s Eqwires Research Analyst under Section 12(3) of the SEBI Act, 1992, and Regulation 27(5) of the SEBI (Intermediaries) Regulations, 2008. The order takes immediate effect. SEBI considered the prior payment of a ₹6 lakh penalty in the adjudication proceedings but held that enquiry and adjudication are separate, and a regulatory censure was commensurate with the violations.

Topics: SEBI Enforcement, Research Analyst Compliance, Fraudulent Practices