SEBI Fines Finfluencer: In a landmark decision, the Securities and Exchange Board of India (SEBI) has levied a hefty penalty of Rs 6.5 crore on a finfluencer P R Sundar for providing faulty investment advice.
This marks the first time SEBI has taken action against a finfluencer for violating investment advisory rules, sending shockwaves through the financial influencer community.
The penalty includes a 12% per annum interest charge, and Sundar has been banned from the stock market for a year. This incident raises questions about the credibility of financial influencers and the need for tighter regulations in the industry.
Background and Profile of P R Sundar: P R Sundar, a prominent figure in the world of financial influencers, boasts a substantial online following across multiple platforms. With 10.7 lakh subscribers on YouTube, 523K followers on Twitter, 70K followers on Instagram, and 11K followers on Facebook, Sundar has built a significant presence as a financial advisor.
He is the founder of Mansun Consultancy, a share marketing consultancy firm, and has been offering advisory services since 2013 through his website prsundar.blogspot.com.
SEBI’s Findings and Actions Taken: SEBI received three reports against Sundar, highlighting his violations of investment advisory rules. Firstly, he was found to have charged fees for advisory services without the necessary registration from the regulator. Secondly, he selectively posted screenshots of his profitable trades, deleting any evidence of losses. Lastly, he received two show-cause notices for his services in May and November 2022.
SEBI Fines Finfluencer P R Sunder and barred from trading
Action by SEBI: As a result of SEBI’s investigation, Sundar has been imposed with a significant financial penalty and a one-year ban from participating in the stock market.
The incident has also prompted the Indian Government to take action. The Finance Minister issued a warning about unfair schemes of financial advice, highlighting that a majority of finfluencers may lack honesty and integrity. The government plans to introduce new laws in the first week of June to regulate social media platforms, aiming to tackle such fraudulent practices.
SEBI’s imposing penalty on finfluencer P R Sundar for faulty investment advice serves as a watershed moment in the financial influencer landscape. It highlights the pressing need for enhanced regulations and investor awareness to safeguard the interests of individuals seeking financial guidance online.
As the Government prepares to introduce new laws to regulate social media platforms, it is hoped that these measures will restore trust and ensure the integrity of financial advice provided by influencers.
While SEBI’s penalty against P R Sundar serves as a strong deterrent, its effectiveness in completely eradicating unethical practices among financial influencers remains uncertain.
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