SEBI reimposes Rs 5 lakh penalty on unregistered adviser Mohit Gupta

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has reimposed a penalty of Rs 5,00,000 on Mr Mohit Gupta, the proprietor of an outfit called Safe Trading, for acting as an investment adviser without registration. The direction sits in a final order dated 31 July 2026 (reference QJA/BS/NRO|RRD-NRO/32544/2026-27), passed at Mumbai by the quasi-judicial authority Biju S. The penalty was levied under Section 15HA of the SEBI Act, 1992, and Mr Gupta has been given 45 days from receipt of the order to pay it.

The order closes a loop that began with an earlier SEBI order dated 27 March 2025. That order held that Mr Gupta "was acting as an investment advisor without holding the registration certificate", a fact the order records he admitted. SEBI further held that he "collected funds from investors by fraudulently assuring guaranteed returns". On that basis SEBI directed him to refund Rs 23,94,574.50 to investors, debarred him from the securities market for one year, and imposed two penalties: Rs 5,00,000 under Section 15HA and Rs 1,00,000 under Section 15EB.

SEBI's findings are a regulator's determination, appealable to the Securities Appellate Tribunal (SAT), and Mr Gupta did in fact appeal. Per the order he does not contest the refund direction or the Section 15EB penalty, and the order records no fresh public denial beyond the legal arguments he advanced against the penalty. This latest order deals only with the one issue the tribunal sent back to SEBI, namely whether the Rs 5 lakh penalty under Section 15HA should stand.

How the Scheme Worked

Per the March 2025 order summarised in the current document, Mr Gupta ran an investment advisory business under the brand "Safe Trading" without ever holding the certificate of registration that the law requires of anyone who gives investment advice for consideration. The order records that he collected money from investors and, in SEBI's words, did so "by fraudulently assuring guaranteed returns", a promise no genuine market adviser can honestly make, because returns on securities are never guaranteed.

The quantum gives a sense of scale. SEBI put the money to be refunded to investors at Rs 23,94,574.50, the sum it identified as having been received in respect of the unregistered advisory activity. That figure, rather than any notional profit, is what the regulator ordered returned to the people who paid it.

The procedural history is central to this matter. SEBI passed its substantive order on 27 March 2025. Mr Gupta challenged it before the SAT, but narrowly: he did not dispute the refund of Rs 23,94,574.50 or the Rs 1 lakh penalty under Section 15EB, contesting only the Rs 5 lakh penalty under Section 15HA. By its order dated 21 August 2025 the tribunal sustained the refund and the Rs 1 lakh penalty and remitted the single question of the Section 15HA penalty to SEBI for reconsideration after granting a hearing.

SEBI then issued a hearing notice, received Mr Gupta's written reply dated 19 January 2026, and heard his authorised representatives on 5 February 2026. A significant thread in the current order is compliance. SEBI records that Mr Gupta "has not, till date, complied with the directions of SEBI's order to refund investors". The order notes he issued a public notice offering a refund on 28 November 2025, roughly eight months after the original order, and that SEBI advised him by email on 3 February 2026 to open an escrow account for the refundable amount, a direction the order says he "failed to comply" with.

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, the provisions that give SEBI its powers to protect investors and to issue remedial and penal directions.

The underlying violations, as the order sets them out, are the running of investment advisory activity without registration under Section 12(1) of the SEBI Act read with Regulation 3(1) of the SEBI (Investment Advisers) Regulations, 2013, and fraudulent conduct under Section 12A(a), (b) and (c) of the SEBI Act read with Regulations 3(a), (b), (c) and (d) and 4(2)(k) and (s) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. The first set of provisions bars anyone from advising on securities for a fee without SEBI registration; the second prohibits fraudulent and deceptive dealing in the securities market.

The specific penalty confirmed in this order sits under Section 15HA, the penalty for fraudulent and unfair trade practices. The order quotes it: a penalty "which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of such practices, whichever is higher". SEBI settled on the statutory minimum of Rs 5 lakh. The separate Section 15EB penalty of Rs 1 lakh, for a registration-related default, was not in issue here.

What Happens Next

For Mr Gupta, the order requires payment of the Rs 5 lakh within 45 days of receipt through SEBI's online payment facility. The debarment and refund directions from the March 2025 order continue to bind him; the order records that the one-year market debarment runs from the date of that order or until he files a repayment report, whichever is later, so non-payment of the refund keeps that clock running.

The order is a SEBI determination and, like any such order, is appealable to the Securities Appellate Tribunal, and from there on a question of law to the Supreme Court under Section 15Z of the SEBI Act. Mr Gupta has already used the SAT route once, which is how the Section 15HA question returned to SEBI. The reasoning in the order suggests the room to reduce a Section 15HA penalty below the Rs 5 lakh floor is narrow: SEBI cites Supreme Court orders that stayed tribunal decisions which had substituted or lowered the minimum penalty.

Because this is a regulatory finding and not a criminal conviction, the matter proceeds through this civil enforcement channel rather than through a trial. The directions take effect immediately.

What It Means

The practical lesson for ordinary investors is the oldest one in the book, and it is easy to act on. Anyone who gives investment advice for a fee in India must be registered with SEBI as an investment adviser. Registration can be checked in minutes on SEBI's own website, which publishes a searchable list of registered advisers, and concerns can be raised on the SEBI SCORES portal. If the person taking your money is not on that list, the protection of the regulatory framework, and much of your practical recourse, simply is not there.

The second red flag is even plainer. The order turns on an assurance of "guaranteed returns". No registered adviser, mutual fund or legitimate market product can promise a guaranteed return on market-linked securities. A guarantee is not a sign of confidence; per this and countless similar orders, it is among the most reliable markers of an unregistered operator.

Finally, the case is a reminder that a SEBI refund direction is only as good as its enforcement. Even here, with the amount fixed at Rs 23,94,574.50 and the debarment tied to repayment, the order records that the money had not been returned. Investors who suspect they have paid an unregistered adviser should preserve payment records and lodge a complaint on SCORES early, rather than waiting for an order to make them whole.

FAQ

What exactly did SEBI order?

Per the final order dated 31 July 2026, SEBI reimposed a penalty of Rs 5,00,000 on Mr Mohit Gupta, proprietor of Safe Trading, under Section 15HA of the SEBI Act, payable within 45 days. This followed SEBI's earlier order of 27 March 2025, which had also directed a refund of Rs 23,94,574.50 to investors and a one-year market debarment.

Why did the penalty come back to SEBI a second time?

Mr Gupta appealed only the Rs 5 lakh Section 15HA penalty to the Securities Appellate Tribunal. By its order dated 21 August 2025 the tribunal upheld the refund and the Rs 1 lakh penalty but sent the Section 15HA penalty back to SEBI to reconsider after a hearing. This order is SEBI's reconsideration, and it confirmed the Rs 5 lakh figure.

Can the order still be appealed?

Yes. A SEBI order is appealable to the Securities Appellate Tribunal, and a further appeal on a question of law lies to the Supreme Court under Section 15Z of the SEBI Act. SEBI's findings are a regulator's determination reached through its own quasi-judicial process, and Mr Gupta retains his statutory right of appeal.

How can I check if my adviser is registered?

SEBI maintains a public, searchable list of registered investment advisers on its website, and you can raise concerns through the SEBI SCORES portal. Anyone advising on securities for a fee must hold SEBI registration. If they are not listed, treat that as a serious warning and avoid paying them.

What should affected investors do?

Keep records of every payment and communication, and file a complaint on SEBI's SCORES portal. Where an order directs a refund, follow the compliance process it lays out. The order in this matter records that the refund had not been paid, so early complaints and thorough documentation improve the chances of recovery.

Where can I read the official order?

The full order is published on SEBI's website in its enforcement orders section for July 2026, in the matter of the unregistered investment adviser Mr Mohit Gupta (Safe Trading).

This report is based on the official SEBI final order dated 31 July 2026 in the matter of Mr Mohit Gupta (Safe Trading), published on SEBI's website in its enforcement orders section.