The regulator imposed a penalty of Rs 1 crore on Vivek Kanwar, head of private wealth management, and Rs 50 lakh each on Ashish Nasa and Jasjit Singh Banga.
Sebi said it had received several complaints from investors in AT-1 bonds issued by Yes Bank. It said it conducted an investigation and found that AT- 1 bonds of Yes Bank were sold to retail investors between December 1, 2016 and February 29, 2020.
The regulator 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”.
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.
“Risk profiling of individual clients was not done especially investors more than 70/80/90 years old. Lot size of the bond was reduced to facilitate down sale to individual investors. Push from the MD & CEO (Rana Kapoor) of Yes Bank to down sell the AT1 bonds which led the private wealth management team to recklessly sell the bonds to individual investors,” said Sebi.
