SEBI fines Alliance Research proprietor Mudassir Hasan Rs 6 lakh

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 6,00,000 on Mr Mudassir Hasan, sole proprietor of the Jabalpur-based investment advisory firm Alliance Research, for a series of violations of the rules governing registered investment advisers. The direction is contained in a final order dated 18 August 2026 (order reference WTM/AS/WRO/WRO-DIV-5/32666/2026-27), signed by Whole Time Member Amarjeet Singh.

The penalty is split into two parts: Rs 1,00,000 under Section 15EB of the SEBI Act, 1992, and Rs 5,00,000 under Section 15HA. Mr Hasan (PAN AGDPH7770D) had been registered as an investment adviser since 16 April 2015 under registration number INA000002934. SEBI found that, across an inspection period running from 1 April 2018 to February 2020, and in the run-up to his registration, he carried on advisory activity without registration, made a false declaration to obtain registration, kept improper client records, and charged fees SEBI held to be unfair.

The order caps a proceeding that began with an inspection of Alliance Research during 11-15 February 2020. SEBI recorded that Mr Hasan, appearing with his authorised representative at a hearing on 13 February 2026, denied the core allegations and argued, among other things, that any lapse before registration was an unintentional mistake made under a misconception of the law. SEBI rejected that defence on the unregistered-advisory charge but, as set out below, did not uphold every allegation against him.

How the Scheme Worked

According to the order, SEBI's inspection focused on whether Alliance Research complied with the SEBI Act, the SEBI (Investment Advisers) Regulations, 2013 (the IA Regulations) and related circulars. The regulator found several established failings.

First, on unregistered activity, SEBI observed from archived pages of the firm's website and from bank statements that credits described as advisory fees were received from 16 January 2015, whereas the registration application was filed only on 4 February 2015 and the certificate granted on 16 April 2015. The order records that Mr Hasan, in a statement taken during the inspection, admitted operating an unregistered advisory business before registration, accepting advisory fees "to the tune of Rs 6,71,650" for offering tips and paying salaries to 15 employees. SEBI held this established a breach of Regulation 3(1) of the IA Regulations read with Section 12(1) of the SEBI Act, noting that "ignorance of law is no excuse" and that a later registration "cannot cure the default committed during the material period".

Second, SEBI found that the firm had, in its Form A application, described itself as "actively engaged in the field of advisory services" while later denying any prior advisory work, which the order treated as a false declaration.

Third, on client protection, SEBI examined a sample of 46 clients drawn from SCORES complaints, fee quantum and random sampling. The order records that risk-profiling or suitability records were absent for 14 clients, that for 21 of 32 documented clients products meant for "High" risk investors were sold to those categorised as medium or low risk, and that fees received exceeded the client's stated annual income for 19 clients and the proposed investment amount for 17. SEBI held that charging fees bearing "no rational nexus" to a client's financial capacity was "inherently unfair" given an adviser's fiduciary duty, even before precise fee caps took effect in September 2020.

Not every allegation survived. SEBI held that the charge of promising assured or guaranteed returns was "not established", because a call recording relied upon in the notice lacked forensic verification and independent corroboration. The regulator also declined to uphold allegations about advance fees and non-uniform fees, and a charge concerning employee eligibility. The procedural history is long: an interim order dated 6 January 2021 barred Mr Hasan from the securities market; it was confirmed on 29 July 2022; a settlement application was rejected on 11 July 2025; and a show-cause notice followed on 3 December 2025.

The Law Invoked

The final order is passed under Sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the SEBI Act, 1992, which empower the regulator to issue directions and impose penalties to protect investors and the securities market. The monetary penalties are levied under two specific heads the order cites: Section 15EB, which penalises defaults by an investment adviser, and Section 15HA, which addresses fraudulent and unfair trade practices.

The substantive breaches SEBI held established rest on Regulation 3(1) of the IA Regulations (the bar on acting as an adviser without registration) read with Section 12(1) of the SEBI Act; Regulation 13(b) and the Code of Conduct in Schedule III read with Regulation 15(9) (honesty and fair dealing); and Regulations 15(8), 16 and 17 on KYC, risk profiling and suitability. The order also refers to Regulations 3(a) to (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, read with Section 12A of the SEBI Act.

In fixing the amount, SEBI applied Section 15J of the SEBI Act, which lists the factors relevant to quantum, and cited the Supreme Court's ruling in Adjudicating Officer, SEBI v Bhavesh Pabari that those factors are illustrative, not exhaustive.

What Happens Next

A SEBI whole-time member's order is appealable. The order is subject to challenge before the Securities Appellate Tribunal (SAT) within the statutory limitation period, and from there, on a question of law, to the Supreme Court. Mr Hasan is required to pay the Rs 6,00,000 penalty within 45 days of receiving the order, through the designated payment link on SEBI's website.

This final order does not stand alone. The order records that separate enquiry and adjudication proceedings, decided on 7 and 10 October 2025, had already suspended Mr Hasan's registration for two months and imposed a penalty of Rs 6 lakh, and that summary proceedings for non-payment of renewal fees culminated in an order dated 21 July 2026 cancelling his certificate of registration as an investment adviser. Citing proportionality and the "cumulative regulatory action" already taken, SEBI confined the present order to the minimum monetary penalty and issued no further market-access directions. The market restraints imposed by the January 2021 interim order have now been vacated, though the directions in the other proceedings remain in force.

What It Means

For retail investors, the order is a reminder that the label "research" or "advisory" means little without a live SEBI registration and a record of conduct behind it. The single most practical safeguard it points to is verification. Before paying any adviser, an investor can check the firm's registration status and number on SEBI's public register of investment advisers, and can confirm that the entity's name, address and registration number match what is advertised. Here, SEBI found advisory fees were being collected months before the certificate was granted, a gap a registration lookup at the time would not have flashed, but one that underlines why dealing only with a currently registered, verifiable adviser matters.

The order is also a caution about fees. SEBI's finding that charges exceeding a client's own annual income or intended investment are "inherently unfair" gives investors a plain yardstick: an advisory fee that dwarfs the sum you plan to invest is a warning sign, whatever discounts or bundled "multiple services" are cited to justify it. Equally, an adviser who categorises a client as low or medium risk and then steers them into high-risk derivative or commodity products is acting against the suitability duty the IA Regulations impose. Investors who believe they have been mis-sold to can raise a complaint through SEBI's SCORES platform.

FAQ

What exactly did SEBI order?

SEBI imposed a total monetary penalty of Rs 6,00,000 on Mr Mudassir Hasan, proprietor of Alliance Research, comprising Rs 1,00,000 under Section 15EB and Rs 5,00,000 under Section 15HA of the SEBI Act. It found established violations relating to unregistered advisory activity, a false declaration, improper KYC and risk profiling, and unfair fees. The order vacated the earlier market-access ban but left other proceedings' directions in force.

Does this mean Mr Hasan is guilty of the assured-returns allegation?

No. SEBI's order expressly held that the charge of promising assured or guaranteed returns was "not established", because the call recording relied upon lacked forensic verification and independent corroboration. A SEBI final order records the regulator's findings on the charges it did uphold; those findings are administrative determinations, appealable to the Securities Appellate Tribunal, not criminal convictions.

Can the order be appealed?

Yes. An order passed by a SEBI whole-time member can be challenged before the Securities Appellate Tribunal within the prescribed limitation period, and an appeal from SAT lies to the Supreme Court on a question of law. Until any such appeal succeeds, the penalty and the order's findings stand, and the Rs 6,00,000 penalty is payable within 45 days.

How can I check if my investment adviser is registered?

SEBI maintains a public list of registered investment advisers on its website, searchable by name and registration number. Confirm that the registration is current, that the number (in the format INA followed by digits) matches the entity, and that the name and address correspond. Registered advisers must also follow KYC, risk-profiling and suitability norms and charge fees within SEBI's prescribed limits.

What should investors do if they have been charged unfair fees or mis-sold products?

Investors can lodge a complaint on SEBI's SCORES platform, which records the grievance against the intermediary and tracks its resolution. Keep documentary evidence such as payment receipts, risk-profiling forms and communications. In this matter, a SCORES complaint formed part of the record SEBI examined during its inspection.

Where can I read the official order?

The full 42-page final order in the matter of Alliance Research, dated 18 August 2026, is published on SEBI's enforcement portal under Orders of Chairperson / Members, carrying the reference WTM/AS/WRO/WRO-DIV-5/32666/2026-27.

This report is based on the official SEBI final order dated 18 August 2026 in the matter of Alliance Research, published on SEBI's enforcement portal.