In a startling discovery that caught the regulator off guard, the Securities and Exchange Board of India (SEBI) has annulled the registration of an individual officially credentialed as a research analyst, who was actually managing a small grocery store in Madurai.
The regulator cancelled the license held by Purooskhan after establishing that he had zero active participation in the securities market.
During the adjudicating proceedings, it was revealed that Purooskhan runs a compact 100-square-foot provision shop, selling snacks and daily necessities, rather than providing investment advice or market research. The case was presided over by Santosh Kumar Shukla, SEBI’s quasi-judicial authority, who voiced disbelief regarding how such an individual managed to secure registration as a research analyst in the first place.
Key Findings from the Hearing In his official order, Shukla highlighted that during the virtual hearing, Purooskhan seemed completely unversed in stock market operations. The grocer explicitly admitted that he was engaged in running a small retail business and was not performing any duties related to a research analyst. Consequently, SEBI moved to cancel his registration.
Origins of the Case The investigation was triggered in June 2022 following a grievance filed on SEBI’s SCORES platform regarding a website named optionresearch.in.
- The website made fraudulent claims, promising investors “sure shot” trading tips.
- It advertised a “zero risk” environment.
- It guaranteed that investors would see their capital double.
The individual who filed the complaint had paid Rs 50,000 for these advisory services but ultimately incurred financial losses totaling approximately Rs 4 lakh.
The Investigation Upon closer scrutiny, SEBI discovered that the website was selling various paid investment packages while masquerading as a SEBI-registered body. Crucially, the site prominently featured Purooskhan’s official SEBI registration number to establish credibility.
Defense and Liability When confronted by the regulator, Purooskhan argued that he had no association with the website and that his credentials were being exploited without his consent. To support his claim, he provided documentation of police complaints lodged with the Cyber Cell and the Tamil Nadu Police regarding online financial fraud.
However, SEBI’s investigation pointed to negligence on Purooskhan’s part:
- The regulator noted that the Option Research Company had allegedly been granted permission to utilize his registration details.
- Significant concerns were raised after it was discovered that Purooskhan had voluntarily shared his email address and password.
Purooskhan explained that a company partner had originally contacted him while pretending to be a bank official, claiming there was a job opening for a research analyst. He alleged that his documents were harvested under this false pretense and subsequently misused.
He further stated that once SEBI launched its inquiry, the company attempted to cover its tracks by issuing him an appointment letter. This letter designated him as a compliance officer with the authority to issue trading calls—a role he claims to have rejected.
