The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 25 crore on Yes bank and three senior executives of its private wealth management team.
It has been imposed on Vivek Kanwar, head of private wealth management, and Rs 50 lakh each on Ashish Nasa and Jasjit Singh Banga for allegedly perpetrating fraud on its customers by influencing them to alter their investment positions from fixed deposits(FD) to risky AT-1 (additionaltier-1) bonds.
Sebi has informed that it conducted an investigation against several complaints from investors in AT-1 bonds issued by Yes Bank between December 1, 2016 and February 29, 2020.
It observed down-sell of AT-1 bonds were not negotiated between buyers and sellers individually but facilitated by Yes Bank for about 1,300 individual investors, most of whom were existing customers of Yes Bank. It also noticed that Yes bank represented the product as “Super FD” and “as safe as FD”.
Further, the term sheet was not shared with many investors and no confirmation was taken from the investors on their understanding of the features and risks associated with the bond, said the regulator.