Why retail investors fall prey to fake advisers

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Editor's note: On 30 August, the Securities and Exchange Board of India barred three people from the securities market: Lakhan Chauhan, Rohit Soni and Shivani Thakur. The profiles of the three people make the case interesting. Chauhan was a worker at a petrol pump, Soni ran a gas distribution agency and Thakur was a former manager at a research company. Despite their varying backgrounds, they were proprietors of Indore-based RBS Global Capital, and acted as stock market advisers.  Despite not being a SEBI-registered investment adviser, or RIA, the three managed to convince gullible investors and pocketed hefty commissions. An investigation by the regulator showed that bank accounts of the three got deposits of Rs 1.2 crore between October 2017 and July 2020. Apart from the ban on operating in the market, the three have also been ordered to return this money to investors.  SEBI was not done. A couple of days later, on 1 September, Piyush Shambharkar of The Profit Sharing was also barred from the securities market, and was told to refund Rs 1.98 crore that he had received between 23 …