SEBI Reconsiders Section 15HA Penalty in Safe Trading Investment Advisory Case

SECURITIES AND EXCHANGE BOARD OF INDIA 

FINAL ORDER

UNDER SECTIONS 11(1), 11(4), 11(4A), 11B(1) AND 11B(2) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992  

In respect of: 
Mr. Mohit Gupta (Proprietor of Safe Trading) PAN: BZIPG8092C 

A. BACKGROUND  

1. Securities and Exchange Board of India (“SEBI”) had passed an order dated March 27,  2025  (“SEBI  Order”)  in  respect  of  illegal  unregistered  investment  advisory activities carried out by Mr. Mohit Gupta (Proprietor of Safe Trading) (“Noticee”).  
2. The SEBI Order held that the Noticee was acting as an investment advisor without holding the registration certificate, which has been admitted by him. It was further held that  the  Noticee  has collected  funds  from  investors  by  fraudulently  assuring guaranteed returns. The above led to the violation of Section 12(1) of SEBI Act read with  regulation  3(1)  of  SEBI  (Investment  Advisers) Regulations,  2013  (“IA Regulations”) and section 12A(a), (b), (c) of Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and regulations 3(a), (b), (c), (d), 4(2)(k), and (s) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market), 2003 (“PFUTP Regulations”).   
3.  Accordingly, the SEBI Order inter alia issued directions against the Noticee to refund the money received  from investors amounting to  INR 23,94,574.50  in respect of unregistered investment advisory activities and further debarred him from accessing the securities market for a period of 1 year from the date of the order or until the date of the filing of repayment report, whichever is later. Further, a penalty of INR 5,00,000 was imposed under section 15HA of the SEBI Act and INR 1,00,000 under section 15EB of the SEBI Act.  
4. The  Noticee  challenged  the SEBI  Order  before  the  Hon’ble  Securities  Appellate Tribunal (“SAT”), inter alia, on the ground that the penalty imposed under Section 15HA of SEBI Act. In its order dated August 21, 2025 (“SAT Order”), Hon’ble SAT held as follows:  

• “2.The appellant is an unregistered investment advisor. He has been directed to refund a sum of Rs.23, 94,574.50 and pay a penalty of Rs. 1 lakhs under Section 15EB of the SEBI  Act. The  appellant  is  not  challenging  these  two  directions. The  appellant  is aggrieved by imposition of penalty of Rs. 5 lakh under Section 15HA of the SEBI Act for having been charged for violation of PFUTP Regulations.
• 3. After arguing the matter at the considerable length of time, Ms. Shreya Parikh, learned advocate for the SEBI, on the instructions submitted that SEBI s prepared to reconsider the matter only with regard to imposition of penalty under Section 15HA.
• 4.The appellant contended that in 23 other orders passed by the SEBI lesser or Nil penalty is imposed by the SEBI for violation of PFUTP Regulations.  Learned advocate for the appellant is agreeable for reconsideration of the matter in the hands of SEBI so far as imposition of penalty under Section 15HA is concerned.  
• 5. In view of the above, while sustaining the refund of Rs. 23,94,574.50 and imposition of penalty of Rs. 1 lakh, matter is remitted to the SEBI for reconsideration only with regard to penalty  under  Section  15HA.  SEBI  shall  reconsider  the  matter  after  granting  an opportunity of hearing to the appellant.”   (emphasis supplied) 

5. As  directed  by  the  Hon’ble  SAT,  a  hearing  notice  was  sent  to  the  Noticee  and Authorized Representatives (“ARs”) for a personal hearing before me on February 05, 2026. Further, the Noticee and ARs were also advised to submit their reply, if any. The Noticee submitted his reply dated January 19, 2026. On February 05, 2026, the ARs of the Noticee appeared before me and made their submissions.  Accordingly, I find that principles of natural justice have been complied with.

B. REPLY   

6. The Noticee’s reply dated January 19, 2026 reiterated during hearings are summarized below:  

• a)  Disproportionate and discriminatory invocation of section 15HA - SEBI had issued 55 warning letters to similar individuals running unregistered investment advisory services and the Noticee could have been let off with similar.  In more than 20 matters  involving  unregistered  investment  advisory,  SEBI  has  charged  only disgorgement or and under sections 15HB or 15EB. No Noticee has been charged with section 15HA.  
• b)  Absence of proportionality - Section 15HA is attracted in cases involving serious and aggravated conduct of fraud or unfair trade practices.