Nishant Singh Stock Market Scam | SEBI Ask 16.2 CRORE Refund

Case study: Nishaan Singh Scam

The scam of investment and trading has led many to get quick profits without putting in the necessary effort. Recently, SEBI uncovered a fraudulent scheme orchestrated by Nishaan Singh, involving fake returns and deceitful practices under the guise of a portfolio management service (PMS) through his company, Sanbun Investments and along with that, SEBI has asked to return 16.2 crore rupees."In this blog we will try to explain this scam as a case study for our readers to get aware of scams like these in future .

 

Who is Nishaan Singh?

Nishaan Singh, a young trader from Delhi, began his journey at the tender age of 16. Soon, he formed Sanbun Investments and, through the power of social media, gained over 200,000 followers on Instagram. His followers didn't realise that the fancy company and lifestyle were just a cover for a big scam.

 

SEBI's Discovery

The story took an unexpected turn on October 6, 2022, when SEBI received a complaint from Kaif Khan, revealing the insights of Nishaan Singh's fraud activities. Dr. Anita Kapoor, SEBI's Chief General Manager, shared that Nishaan Singh attracted customers with promises of swing recommendations, online courses, hedge funds, and positive returns to customers and investors.

 

 

The Fake Business Model

Nishaan Singh, posing as the founder of Sanbun Investments, claimed SEBI registration and set a minimum investment of 1 crore for his services promising a 50% profit share. The agreement, however, revealed a different reality, as Kaif Khan's 1.2 crore portfolio decreased to a mere 24 lakh in just one month.

 

SEBI's Investigation

SEBI independently investigated Nishaan Singh's claims, examining transaction details and chat logs between Kaif Khan and Nishaan Singh. Screenshots from Nishaan Singh's website, now shut down, further revealed the fraudulent nature of his services. Which included Discussions about buying and selling quantities, price manipulations, and misleading promises.

In these SEBI-provided chats as evidence, the person making the complaint is identified as Kaif Khan, and the accused is referred to as Nishaan Singh.

 

Chat No. 1: Stock Manipulation

Nishaan Singh (Noticee): Buy 500 shares once at 14600, then check if funds are received or not.  

Kaif Khan (Complainant): Yes, it's done.  

Noticee: Now, sell 300 shares at 450. Give it a try.  

Complainant: What's the item?  

Noticee: 15450.  

Complainant: Noticee: Unable to sell 300 shares, insufficient funds. Trying with 100.

 

Noticee: All big players are adjusting their positions in BSE. Kaif, how much is your capital?  

Complainant: Sir, let me tell you the total.  

Noticee: Tell me the total.  

Complainant: As much as I can.  

Noticee: I can help you make money.  

Complainant: Up to 1.2 crore.  

Noticee: Call me.

 

 

Chat No. 2: Planning and Execution:

Noticee: There might be a gap-up tomorrow.  

Complainant: Elections?  

Noticee: Yes, so let's book it tomorrow and then start. Tell me your total capital.  

Complainant: Around 1.2 crore.  

Noticee: I'll try to make 2.4 crores by next year.

 

Chat No. 3: Insider Trading Discussions

Complainant (shares an image of the price of certain scripts):

Noticee: Book this at 15700.  

Complainant: Okay.  

Noticee: Book it quickly. Give me your ID and password.  

Complainant: Done.  

Noticee: Hurry up, we need to change the hedge. Provide ID and password; I'll get it done fast. Send the pin as 9Tra*************.

 

 

SEBI's Action and Nishaan Singh's Defence:

SEBI issued notices to Nishaan Singh in October 2022, receiving no response for two months. After reminders, Nishaan Singh replied in September 2023, denying allegations. Investigations revealed Nishaan Singh's AP status with Angel One and transactions indicating a 52 lakh fee for portfolio management services.

 Despite multiple notices and reminders, Nishaan Singh delayed responses. His lawyer cited medical issues, leading to rescheduled hearings. Nishaan Singh's defence claimed his firm provided only educational content, not portfolio management services. SEBI uncovered inconsistencies in his statements.

SEBI's Verdict:

SEBI has instructed Nishaan Singh to return all funds which sums up to about rupees 16.2 crore to his clients within three months as a penalty for violating SEBI regulations. The blog encourages readers to share their thoughts on the case and the lessons they've drawn from it.

 

 

Conclusion

This case serves as a reminder that investors should approach investments with caution and always verify the legitimacy of financial service providers before entrusting them with your money.

The Nishaan Singh scam also reflects the importance of SEBI's role in protecting investors and maintaining the integrity of the financial markets.