SEBI issues interim order against Stark Investments for unregistered investment advisory services

Who it concerns: Surabhi Chauhan, Zahin Ismail Jessani, Stark Investments, Starkblue Ventures LLP, and Shakuntala Davendra Singh.

What SEBI found or ordered

• SEBI received 16 unique complaints alleging unregistered Investment Advisory (UIA) and unregistered Portfolio Management Services (UPMS).
• SEBI observed that the entities solicited investments by claiming to use proprietary quantitative models, algorithm-based trading, and assured downside protection.
• SEBI noted that investors were made partners in Starkblue Ventures LLP, with funds pooled into a common corpus managed by the designated partners (Surabhi Chauhan and Zahin Ismail Jessani).
• SEBI found that investors were prompted to open trading accounts with registered brokers (e.g., IIFL, Zerodha) and then shared their login credentials, passwords, and OTPs with the entities.
• The order is issued under Section 11(1), 11(4), 11B(1), and 11D of the SEBI Act, 1992.
• The order is designated as an 'Ex Parte Interim Order'.

Also in the document

• The order is interim and ex parte, meaning it is a preliminary step in the enforcement process rather than a final judgment.
• SEBI noted that the entities marketed themselves as having a team with over 50 years of cumulative experience and qualifications including CFA, CFT, and MBA.
• The activities allegedly began in September 2020 with onboarding clients for UIA services, followed by the incorporation of Starkblue Ventures LLP in February 2022.