Sebi’s crackdown on finfluencers widens; Avadhut Sathe latest to face action

The Securities and Exchange Board of India (Sebi) conducted raids at the premises of trader and finfluencer Avadhut Sathe this week for misleading investors and using live data to trade.

In a recently held event by FICCI-CAPAM in Mumbai, Sebi's whole-time member Kamlesh Chandra Varshney hinted that the market regulator conducted a "big search operation on a big name in this industry". However, Varshney did not name anyone. He only said that finfluencers violating Sebi’s guidelines should be aware that they are being closely monitored to ensure compliance with the law.

Varshney noted that while many financial influencers provide genuine education to investors, some misguide young people under the garb of education by using live data from the equity market.

Sebi targets high-profile finfluencers in widening crackdown

According to a Moneycontrol report, Sebi conducted search and seizure operations at Karjat, a popular weekend getaway in the Sahyadri Hills, on 20 and 21 August. Sathe runs the Karjat Trading Academy and boasts 9,36,000 subscribers on YouTube.

Sebi has been cracking down extensively on unregistered finfluencers violating securities laws. The regulator is leveraging technology to flag violations in real time and is also investing in specialist talent to keep pace with market manipulation tactics such as algorithmic trading abuses and gamma manipulations.

Meta’s financial ads go SEBI-verified: A leap toward safer investment advertising?

In January this year, Sebi issued restrictions on finfluencers providing stock tips on social media platforms as part of its investor education measures.

Finfluencers are also prohibited from making claims about returns or performance of any security. The restrictions extend to advertisements, branding, and promotional material sourced through third-party marketing agencies.

SEBI slaps Rs 25 lakh penalty on BSE for granting early access to corporate disclosures

Last year, Sebi removed more than 15,000 content sites created by finfluencers spreading misleading financial advice. The regulator has also banned several finfluencers, including Mohd Nasiruddin Ansari, who ran unauthorised investment advisory services under the name Baap of Chart, and YouTuber Asmita Jitesh Patel, popularly known as the “She Wolf,” from accessing the securities market.