In a significant move, the Securities and Exchange Board of India (SEBI), the regulatory authority for the Indian stock market, has taken strict measures against individuals providing investment advice through social media platforms, known as “Financial Influencers.”
After an increase in incidents of misleading and incorrect advice given by such individuals, SEBI has initiated legal proceedings against Mohammad Nasiruddin Ansari, popularly known as the “Bap of Charts .” SEBI has directed Ansari to refund the amount of 172 million Indian Rupees (INR) raised from his followers through the sale of educational programs related to stock trading, as reported by the Economic Times.
Ansari, operating under the name “Bap of Charts (BOC),” has been active on various social media platforms such as Twitter, where he runs profiles providing recommendations for buying and selling shares. Notably, Ansari has amassed over 4.43 lakh subscribers on YouTube alone. SEBI has accused Ansari of operating without registration and working as an investment advisor in the form of a financial influencer.
Ansari, through different social media channels, encouraged investment enthusiasts to participate in the stock market, assuring them of profits by sharing his expertise in various educational programs. SEBI has emphasized that Ansari’s actions were aimed at motivating investors to engage in stock market transactions and earn profits through his advice.
Additionally, Ansari offered private group memberships to his clients, where he provided recommendations for buying and selling shares. SEBI has revealed that these services were made available to his clients without proper authorization.
Recently, financial influencers in India have come under scrutiny due to the risk they pose to the financial well-being of common investors. These individuals use public social media platforms to share their personal experiences and offer advice on investments, including insights into their own financial portfolios.
In addition to SEBI’s actions, there are established regulations in India for financial advice and investment consultancy, which include mandatory registration. SEBI has warned that providing advice on buying or selling shares on social media without proper registration is illegal.
The regulatory body’s decisive action against misleading financial influencers aims to safeguard the interests of investors and maintain the integrity of the Indian stock market. This development underscores the importance of seeking advice from registered and authorized financial advisors before making investment decisions.