Summary: SEBI inspected Eqwires Research Analyst and its partners, revealing multiple regulatory violations between April 2020 and November 2021. The investigation found that Eqwires impersonated an unregistered investment advisor by using phrases like “Best investment adviser” on its website and social media. The firm also provided research recommendations on platforms like Telegram without the required disclosures concerning conflicts of interest and risks. Additionally, Eqwires handled a client’s trading account, which is prohibited for research analysts, and used fake testimonials and exaggerated profit claims to mislead investors. SEBI determined that these actions constituted fraudulent and unfair trade practices. Consequently, SEBI imposed a joint and several penalty of ₹600,000 on Eqwires and its partners. The case highlights key takeaways for research analysts and investment advisors, emphasizing the need for proper disclosures, accurate representation, and strict adherence to SEBI regulations.
Matter Involved
SEBI carried out inspection of Eqwires Research Analyst and its partners (Ms. Bansri Pankajbhai Thakkar & Mr. Pranay Dineshbhai Morakhiya) for the period April 2020 – November 2021.
Multiple violations were noted:
1. Holding out and acting as Investment Adviser (IA) without registration
Eqwires projected itself as “Best investment advisor in India / stock advisory company” on its website, Telegram groups and social media channels.
Its Telegram group (10,000+ subscribers) repeatedly used statements like “India’s top-notch SEBI registered Research Analyst” and “Best investment adviser”.
Payments received from clients also carried narrations like “advisory service”, “market tips”, “advisory company”, showing that clients considered them as IA services.
Though Eqwires argued that it only provided buy/sell/hold recommendations (covered under Research Analyst), SEBI found that the firm was impersonating as IA without registration.
2. Research Recommendations without mandated disclosures
Eqwires provided “stock tips” without disclosures mandated under Regulation 19 & 20 of RA Regulations (conflict of interest, risks, analyst’s holding, etc.).
SEBI clarified that all research recommendations (including those on Telegram/WhatsApp, not only detailed reports) are included in the definition of Research Reports and must carry proper disclosures.
3. Handling of client trading accounts
A complaint revealed that Eqwires obtained login details & an authorization letter from a client and executed trades on her behalf for ~9 months.
SEBI held this to be a serious violation since RAs are not permitted to operate client trading accounts or funds.
4. Misrepresentation through website & social media
Eqwires displayed fake testimonials, fabricated client reviews, and exaggerated claims such as “Highly profitable services, 1 lakh profit in a month with 2.5 lakh capital.”
The firm admitted that these were managed by a marketing agency and not actual clients.
SEBI held this as fraudulent misrepresentation under PFUTP Regulations since such reviews can influence investor decisions.
Applicable Provisions Violated
1. Section 12(1) SEBI Act, 1992 r/w Regulation 3(1) of IA Regulations, 2013 – Acting as IA without registration.
2. Regulation 19 & 20 of SEBI (Research Analysts) Regulations, 2014 – Disclosures & content requirements in research reports.
3. Regulation 13(i) & Code of Conduct under Regulation 24(2) of RA Regulations – Responsibility of RAs & senior management.
4. Regulations 3(a)-(d) & 4(2)(k),(r),(s)(i) of PFUTP Regulations, 2003 – Fraudulent and unfair trade practices.
5. Section 27 SEBI Act – Liability of partners.
SEBI’s Decision
SEBI held all charges established.
Eqwires and its partners were jointly and severally penalised INR 6,00,000.
(INR 1,00,000 under Section 15EB for RA/IA violations + INR 5,00,000 under Section 15HA for fraudulent misrepresentation).
Key Takeaways for RAs / IAs
1. If you are a Research Analyst, never impersonate as an Investment Adviser, avoid words like best investment advisor, stock advisory company, etc.
2. Avoid exaggerated claims on website (No. 1 analyst, guaranteed profits).
3. Never publish fake testimonials or fabricated client reviews.
4. Do not display past performance/returns without proper approvals & disclaimers.
5. Ensure proper website disclosures (SEBI registration details, disclaimers, conflict of interest).
6. Most Important, SEBI clarified that all BUY/SELL/HOLD recommendations – whether sent through reports, Telegram, WhatsApp, SMS, or email – are deemed to be “Research Reports”. Hence, they must carry full disclosures as per Regulation 19 & 20 of RA Regulations (analyst interests, risk factors, conflicts, etc.).
If you are a SEBI-registered RA and require help with compliance execution, audits, or client documentation, don’t hesitate to reach out for tailored support. Author can be reached at +91 90159 33164 \ info.compliancebuzz@gmail.com.
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