The order was issued after an inquiry report was filed with the regulator on November 18, 2024, following certain complaints against Jain on the SCORES portal. Sebi investigated the complaints to determine whether the applicable regulations were complied with by the accused.
In his defense, Jain told SEBI that his company does not accept customer fees into third-party bank accounts, a policy clearly stated in the agreements, invoices and on the website. He denied allegations that money was being funneled into employees’ personal accounts, claiming that certain former employees had misused company credentials to conduct illicit activities without the company’s knowledge.
Jain argued that the company cannot be held responsible for the independent actions of ex-employees, citing absence of vicarious liability, and said SEBI had already been made aware of persons issuing fake invoices under the company’s name.
On charging fees for overlapping periods, Jain said the allegation that a customer had been sold services for overlapping periods was due to a lack of understanding of the billing system before the 2020 change as a combined invoice was issued for all services at that time. “The customer has subscribed to a combination of services and that does not mean that the customer has been charged for overlapping periods,” the order said, referring to Jain’s statement to the regulator.
He further submitted that the company had made all reasonable efforts to maintain and provide the call recordings required by Sebi, but certain data became unavailable due to technical glitches beyond his control. However, Sebi rejected the arguments.
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