It appears that the Securities and Exchange Board of India (SEBI) is now wary of influencers giving unsolicited advice as it recently put a ban on Mohammad Nasiruddin Ansari, the owner of 'Baap of Chart,' and has asked him to deposit Rs 17 crore, allegedly collected for providing "investment advice."
SEBI has ordered Mohammad Nasiruddin Ansari, the owner of "Baap of Chart" on social media, to deposit approximately Rs 17.21 crore in an escrow account.
Why? This action was taken as they were accused of collecting money by providing unregistered and fraudulent advisory services.
Nasir's YouTube channel, @Baapofchart, boasts over 4.43 lakh subscribers and more than seven crore views. His Instagram account also has over 73,000 followers where he often engages in discussions about stock markets and promotes his workshops to earn money.
dailyO checked his website, where he offers his course, and his courses were priced at Rs 5,100.
This is a temporary directive, awaiting a final confirmation order to be issued by SEBI once the investigation concludes.
During the period of scrutiny from January 1, 2021, to July 7, 2023, SEBI assessed whether Nasir was involved in providing investment advisory services without SEBI registration through social media or other means.
The investigation uncovered that Nasir was positioning himself as a stock market expert on various social media platforms, enticing investors to enroll in various 'educational courses' and persuading them to invest in the securities market by promising near-certain profits if they followed the recommendations.
Rahul Rao Padamati, an associate of Ansari, and Golden Syndicate Ventures, one of their companies, were also barred by the regulator until further notice.
Nasir refuted the claims of earning profits and stated that he actually incurred a loss of 2.1 crore in the market.
If you are wondering how SEBI is regulating these finance influencers, this regulation comes in the form of SEBI banning or passing similar orders to admins of similar accounts.
For instance, in April, SEBI passed another similar order where admins of a Telegram Group were asked to pay Rs 5.6 crore fine.
The first such case, where a renowned finfluencer was fined, was on May 25 this year when YouTuber and options trader PR Sundar was fined and barred from trading for a year over alleged violation of investment advisers' norms.
PR Sundar's case actually dates back to 2022 when his company Mansun Consulting, and co-promoter of the company Mangayarkarasi Sundar settled with the SEBI complaints alleging they were providing investment advisory services without the requisite registration from the regulator.
The case was put to rest when the accused agreed to pay a settlement amount of Rs 46.80 lakh and to disgorge Rs 6 crore of profits.
People who believe you, need no explanation.— P R Sundar (@PRSundar64) May 27, 2023
People who do not believe you, no amount of explanation will help.
So keeping silence, at least for some time, is the best response.
What do you think about these crackdowns?