SEBI has revoked the restraint it had imposed on Trendline Traders Academy and its founder from the capital markets for offering unauthorised portfolio management services and mobilising funds from investors with a promise of high returns.
On November 18, the SEBI had barred Trendline and its founder/director Sunil Laxman Kale, from capital markets and had asked them “to cease and desist” from undertaking portfolio management activities. Kale is a registered sub broker and is affiliated with India Infoline.
In its latest order dated December 31, SEBI has said that while Trendline and Kale’s debarment from securities market need not continue, they would have to cease and desist from undertaking any unregistered activity including portfolio management services.
Securities and Exchange Board of India (SEBI) had come across an advertisement by Trendline in April claiming to double the money invested by an investor through it in a year’s time.
A preliminary probe by the regulator found that Trendline and Kale were offering the portfolio management services to investors without necessary registration from SEBI.
Accordingly, SEBI had prohibited them from dealing in the capital markets.
However, in its latest order SEBI has noted that Kale and Trendline had not raised any money from the investors and that the advertisement and the representations on the website with respect to portfolio management activities were “solitary instances“.
Among others, the market regulator also said that both had not got any client on the basis of such representations.
”...it appears that the noticees did not intend to cause any harm to the investors or securities market and the advertisement and representations on website in question might have been made by Sunil Laxman Kale, being involved in his academic pursuit merely out of curiosity and enthusiasm and without properly appreciating the regulatory requirements.”
SEBI noted further that the entities have already undergone the debarment for a period of about one and half month which “is commensurate with the prima facie violations“.
The regulator also took into account the background of Kale and the fact that “no injury has been caused to investors by his actions“.
As per the order, Kale is a small trader in the market, he is also a patient of ‘Cerebral Ataxia’ and has difficulties in speaking, walking and writing, among others.