SEBI Censures Eqwires Research Analyst Over Misleading Claims and Client Account Handling — October 1, 2026

The Securities and Exchange Board of India (SEBI) has issued a regulatory censure against registered research analyst firm Eqwires Research Analyst following enquiry proceedings that uncovered multiple breaches of regulatory norms. The violations include unauthorized operation of a client’s trading account, misleading representations of its registration status, and promoting services using fake client testimonials and return promises.

The order was passed by SEBI’s Quasi-Judicial Authority (QJA) Biju S under Section 12(3) of the SEBI Act, 1992, read with the SEBI (Intermediaries) Regulations, 2008.

Dual Proceedings and Earlier Penalty

The regulatory action originated from an inspection conducted by SEBI covering the period between April 1, 2020, and November 25, 2021. The regulator's Designated Authority (DA) had recommended regulatory censure after discovering systemic infractions.

Eqwires had previously faced a monetary penalty of ₹6 lakh imposed jointly and severally on the firm and its partners—Bansri Pankajbhai Thakkar and Pranay Dineshbhai Morakhiya—via an adjudication order dated August 13, 2025, which the noticees subsequently paid. Addressing the noticee's arguments, SEBI affirmed that adjudication proceedings and enquiry proceedings under the Intermediaries Regulations are independent, allowing regulatory directions such as censure to proceed even if monetary fines have been cleared.

Key Violations Identified

SEBI's investigation highlighted several severe infractions under the Research Analysts Regulations, Investment Advisers Regulations, and Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations:

Unauthorized Trading Account Access * SEBI found that Eqwires took an "authorisation letter" from a client and operated her trading account to execute trades over a nine-month span. * The entity pitched this arrangement as an "add-on service" on grounds that the client lacked time to trade on her own. * The market regulator reiterated that research analysts are strictly prohibited from holding or managing client trading credentials, rejecting the argument that the client provided the access voluntarily.

Holding Out as an Investment Adviser * Despite holding only a Research Analyst (RA) certificate of registration, Eqwires promoted itself across its official website and Telegram channel (which held over 10,000 subscribers) as a "stock advisory company" and the "best investment advisor in India". * The firm received client payments where bank narration remarks recorded terms like "advisory service," "market tips," and "advisory fees". * The regulator noted that issuing client-specific recommendations without adequate registrations and disclosures crossed into the domain of investment advisory.

Fabricated Testimonials and Lack of Disclosures * The firm displayed fabricated testimonials and exaggerated profitability claims on social media, such as generating ₹1 lakh monthly returns on ₹2.5 lakh capital. * While the entity claimed these testimonials were handled by an external marketing agency, SEBI dismissed the defense, ruling that intermediaries remain directly accountable for misleading promotional material. * Trading recommendations posted on public communication channels lacked required disclosures concerning conflicts of interest and terminology definitions as mandated under Regulations 19 and 20 of the SEBI (Research Analysts) Regulations, 2014.

Implications for Market Participants

The censure serves as a stern reminder to retail investors in India against sharing trading credentials, Demat passwords, or power-of-attorney arrangements with research firms. Under SEBI regulations, research analysts are mandated solely to provide published research reports and objective calls, while investment advisers assess risk profiles without directly operating trading terminals. The ruling underscores the capital market watchdog’s intensifying scrutiny of social media marketing, aggressive tip generation, and unauthorized portfolio control by registered intermediaries.

Tags: SEBI Eqwires Research Analyst Wealth Management Regulatory Compliance Capital Markets