In A First, Sebi Acts Against Finfluencer Pr Sundar, Options Trader Not Allowed To Trade For A Year

In a first case of action against a finfluencer (financial influencer), market regulator Securities and Exchange Board of India (SEBI) on May 25 penalised and barred renowned youtuber and options trader PR Sundar from trading for a year over alleged violation of investment advisers norms.

(A financial influencer or ‘FinFluencer’, is a person who gives information and advice to investors on financial topics — usually on stock market trading, personal investments like mutual funds and insurance, primarily on various social media platforms.)

The three have agreed to pay a settlement amount of Rs 46.80 lakh and to disgorge Rs 6 crore, which includes profit earned from advisory services and the interest on it. Apart from this, they have also agreed to refrain from buying, selling or dealing in securities for one year from the passing of the Settlement Order.

Following SEBI’s crackdown, PR Sundar on May 27 tweeted, “People who believe you, need no explanation. People who do not believe you, no amount of explanation will help. So keeping silence, at least for some time, is the best response.”

According to SEBI’s order, there were two references alleging that PR Sundar and his company were providing advisory services without obtaining the necessary registration from the regulator. Multiple complaints received by the market regulator also claim PR Sundar ran a website through which he offered various packages to provide investment advice.

Sebi noted that the firm recommended purchasing, selling, and dealing in securities, which was communicated to the clients — all of which comes under the purview of a registered investment advisory business.

SEBI’s order against PR Sundar and his firm comes at a time when many registered investment advisors (RIAs) have been raising the issue of disparity in regulations for them and finfluencers.

Last month, Finance Minister Nirmala Sitharaman too addressed concerns related to financial influencers in India and warned of the dangers of Ponzi apps offering financial solutions.