SEBI drops advisory charge against Investocare noticee on remand

The Enforcement Action

On 15 July 2026, the Securities and Exchange Board of India (SEBI) passed a fresh order in the matter of Investocare Financial Research & Others, disposing of proceedings against Mr Ramesh Babu on remand from the Securities Appellate Tribunal (SAT). The order, bearing reference QJA/SS/WRO/WRO/32487/2026-27 and signed by Santosh Shukla, Quasi-Judicial Authority, at Mumbai, gave Mr Babu the benefit of the doubt and held that the charge of acting as an unregistered investment adviser was "not established" against him.

The order directs Mr Babu to pay only Rs 410 to SEBI within 45 days - a sum SEBI treated as consideration that had reached his bank account for advisory activity carried out by others - so it can be refunded to the complainant. SEBI also said it may take steps to de-freeze his bank and demat accounts, which had been frozen under an earlier order.

This fresh order replaces an ex-parte order dated 25 May 2023, under which SEBI had debarred Mr Babu from the securities market for two years and imposed penalties of Rs 4 lakh on him. That earlier order also debarred Investocare Financial Research and its proprietor, Mr Ravish Kandhari, from the market for one year and imposed penalties of Rs 2 lakh on them, taking the total penalties in the matter to Rs 6 lakh. Mr Babu appealed, and SAT, by an order dated 5 May 2026, set aside the 2023 order as it related to him and remitted the matter to SEBI for fresh disposal in accordance with law.

How the Scheme Worked

According to the order, the proceedings began with a complaint dated 14 January 2021 from one Mr Pankaj Kumar. He alleged that an agent of Investocare had contacted him to invest in the share market, claiming the firm could help him earn Rs 1,000 a day on an investment of Rs 5,000 to Rs 10,000, for a commission of 50 per cent of the benefit, and that it had experts who traded with a 20 per cent stop loss. The complainant said that after a few trades the firm had used up all his money and he suffered losses.

The order records that Investocare ran a website, investocares.com, operative from 1 December 2013 to 1 December 2021, which offered investment advisory services with, in the order's words, "assured accuracy of 80-90%" in stocks, commodities and forex, through packages such as Stock Cash, Stock Future and Intraday Options. The website's pricing ran from a minimum of Rs 6,800 to a maximum of Rs 1,51,200 for durations ranging from monthly to yearly. SEBI's case was that Investocare offered these services without holding a certificate of registration as an investment adviser, over the period from 9 March 2019 to 11 July 2021.

The 2023 order had treated Mr Babu as connected to Investocare because a bank account in his name - into which SEBI counted 890 credit entries totalling about Rs 60.94 lakh between November 2015 and July 2021 - had been given to the complainant for depositing money. On remand, however, SEBI examined Mr Babu's submissions and bank statement in detail. It found that an employee of Investocare, named in the order as Yatender Singh, had given the complainant that account for three small UPI transfers - Rs 150, Rs 160 and Rs 100 in December 2020, totalling Rs 410. The remaining credits, the order records, were traced to Mr Babu's own transfers between his accounts, salary, interest, refunds and cashback, credit-card loans, and the online sale of gift cards through his digital-services firm. SEBI concluded these credits were "not in respect of any investment advisory services".

The Law Invoked

The order is passed under Sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2), read with Sections 15HA and 15EB, of the SEBI Act, 1992. Sections 11 and 11B give SEBI its broad powers to protect investors and issue directions, while the penalty provisions - Section 15EB for defaults by an investment adviser and Section 15HB as a residuary penalty, with Section 15HA covering fraudulent and unfair trade practices - were the basis for the monetary penalties recorded in the 2023 order.

The core charge turned on registration. SEBI alleged that the activity fell within the definition of an investment adviser under Regulation 2(1)(m) of the SEBI (Investment Advisers) Regulations, 2013, and that carrying it on without registration breached Section 12(1) of the SEBI Act read with Regulation 3(1) of those Regulations, which requires anyone acting as an investment adviser to hold a SEBI certificate of registration.

On the facts as re-examined, SEBI held that "the violation of Section 12(1) of the SEBI Act and Regulation 3(1) of the IA Regulations have not been established" against Mr Babu, and gave him the benefit of the doubt.

What Happens Next

For Mr Babu, the order is largely closure. Once he pays the Rs 410 and forwards proof to SEBI's Western Regional Office in Ahmedabad, SEBI will refund the sum to the complainant, and it has indicated it will move to de-freeze his accounts. The two-year debarment and Rs 4 lakh penalty from the 2023 order no longer apply to him.

For the other parties, the position is different. The findings in the 25 May 2023 order against Investocare Financial Research and Mr Ravish Kandhari were not the subject of this remand and continue to stand as SEBI recorded them. Any SEBI order of this kind is appealable to the Securities Appellate Tribunal, and from there, on a question of law, to the Supreme Court. The order does not record any public response from Investocare or Mr Kandhari beyond Mr Kandhari's stated denial of any connection with Mr Babu. The 2023 order against Mr Babu was passed ex-parte, meaning without his participation, which is precisely what the SAT remand corrected.

What It Means

The episode is a useful, undramatic illustration of how India's securities-market enforcement is meant to work: an ex-parte order, an appeal, a tribunal remand, and a fresh order that follows the evidence - here, to the point of clearing a noticee the regulator had earlier debarred. It is a reminder that a SEBI order is a finding subject to appeal, not a final and unchallengeable verdict.

The more practical lesson lies in the conduct SEBI examined. Any offer promising "assured accuracy of 80-90 per cent", fixed daily earnings, or a profit-share on your trades is a warning sign: registered investment advisers cannot guarantee returns, and legitimate advice is never sold on a promise of certain profit. Before paying anyone for stock tips or advisory packages, investors can verify registration on SEBI's own list of registered investment advisers and research analysts at sebi.gov.in, and check that payments go only to a verified business account, never to an individual's personal account.

If money has already gone to an unregistered adviser, the SCORES complaint platform and, where an order with refund directions exists, SEBI's escrow-and-refund mechanism are the formal routes to pursue. The Investocare matter itself shows both sides of that process - directions to refund investors, and, on closer scrutiny, care not to penalise the wrong person.

FAQ

What exactly did SEBI order on 15 July 2026?

On remand from the Securities Appellate Tribunal, SEBI passed a fresh order disposing of proceedings against Mr Ramesh Babu in the Investocare matter. It held that the charge of acting as an unregistered investment adviser was not established against him, dropped the earlier debarment and penalty, and directed him only to pay Rs 410 to SEBI for refund to the complainant.

Does this order mean anyone has been found guilty?

No. SEBI gave Mr Babu the benefit of the doubt and found no violation established against him. The registration findings in the separate 25 May 2023 order against Investocare Financial Research and its proprietor stand as SEBI recorded them, and any such SEBI order remains appealable to the Securities Appellate Tribunal. A regulatory order is a finding open to appeal, not a criminal conviction.

Can a SEBI order like this be appealed?

Yes. Orders of SEBI can be challenged before the Securities Appellate Tribunal within the prescribed period, and SAT's decision can in turn be appealed to the Supreme Court on a question of law. This matter itself reached SEBI a second time precisely because SAT set aside the earlier order and sent it back for fresh disposal.

How can I check whether an investment adviser is registered?

SEBI publishes lists of registered investment advisers and research analysts on its website, sebi.gov.in. You can search for the name or registration number before paying for any advice. Registered advisers cannot promise guaranteed or "assured" returns, and their fees are payable to a disclosed business entity, not to a personal account.

What should someone do if they have paid an unregistered adviser?

Keep all records - messages, payment receipts and bank details - and lodge a complaint through SEBI's SCORES platform. Where SEBI has passed an order carrying refund directions, follow the modalities it specifies. Reporting the account and transactions to your bank, and if warranted to the police, may also help recover money or prevent further loss.

This report is based on the official SEBI order dated 15 July 2026 in the matter of Investocare Financial Research & Others, reference QJA/SS/WRO/WRO/32487/2026-27, published by the Securities and Exchange Board of India.