SEBI Probing False Stock Tips On Telegram, YouTube Channels; Orders Likely Soon
SEBI is investigating several instances but directions are likely in four to five cases in the coming two to three months, people in the know said.
The Securities and Exchange Board of India is looking into several stock manipulation violations taking place on social media platforms, such as Telegram and YouTube channels, according to people familiar with the matter.
The regulator is investigating several instances but directions are likely in four to five cases in the next two to three months, the people told NDTV Profit on the condition of anonymity.
The regulator is worried about the volume of such cases and is scrutinising unregistered finfluencers using social media platforms to give false tips to innocent investors. Several investors have likely been affected through such channels and groups, the people said.
The regulator already has stringent measures in place to deal with instances of manipulative stock advice by unregistered advisors.
In simple words, the entities registered with SEBI have been prohibited from associating with non-registered entities, which give stock market recommendations or imply guaranteed returns.
This association includes any financial back and forth, client referrals, sharing of customer information and using services for marketing or promotions. In fact, SEBI has also mentioned that working with an agency that partners with influencers is also banned.
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Investor protection remains an exception as SEBI has tightened its grip around what the educator can and cannot do. Any investor educator cannot recommend specific stocks and securities, use market data from the last three months to indicate future trends, or make any claims of investor returns.
Another interesting impact of the guardrails might be on advertising and marketing. All SEBI-registered firms are allowed to run advertisements if they have control over where they end up. If they are not able to control where the ads end up and find association with finfluencers, it would constitute a violation.
In cases of violation, SEBI can impose penalties, cancel registrations or bar violators from the market. These regulations came up on Aug. 29, 2024 and a further advisory came out on Oct. 22, 2024. The regulator asked the registered participants to get their act in order, within three months of the October circular and hence these regulations are already in force.
