SEBI warns against blindly following investment advice on social media, advising caution. While acknowledging the positive role of many experts in enhancing financial literacy and empowering investors, Securities and Exchange Board of India cautions against those exploiting their large followings for personal gains. The focus of SEBI’s recent investigation was on the conduct of guest experts appearing on Zee Business, a prominent television channel known for its financial and business news coverage.
To safeguard investors and maintain the integrity of the securities market, the Securities and Exchange Board of India (SEBI) has recently intensified its scrutiny on the dissemination of investment advice through television and social media platforms. This action underscores Securities and Exchange Board of India commitment to cracking down on unfair trade practices and ensuring that investment advice provided to the public is transparent, reliable, and in compliance with regulatory standards.
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The focus of Securities and Exchange Board of India’s recent investigation was on the conduct of guest experts appearing on Zee Business, a prominent television channel known for its financial and business news coverage. The regulatory body’s probe unearthed evidence suggesting a complex web of interactions between the guest experts and certain profit makers, who appeared to benefit from non-public, advance information shared by these experts. This information, according to Securities and Exchange Board of India, was used by the profit makers to take advantageous positions in the market, potentially undermining the fairness and integrity of the securities market.
Securities and Exchange Board of India findings pointed to a prima facie violation of the Securities and Exchange Board of India Act and the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations by various noticees involved in the case. The investigation revealed a calculated orchestration where guest experts and profit makers colluded to exploit insider information for personal gain, thereby engaging in practices that could deceive and disadvantage the general investing public.
The regulatory authority arrived at a preliminary conclusion that an amount of ₹7,41,29,648 should be impounded from the noticees, to be held jointly and severally accountable for their actions. This decision reflects SEBI’s determination to take decisive action against those who undermine market integrity and engage in fraudulent practices.
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Furthermore, SEBI has issued notices to the implicated parties, demanding an explanation as to why further punitive measures should not be enacted against them under the relevant regulations. This step is part of SEBI’s broader strategy to enforce accountability and deter future instances of market manipulation and fraud.
“During its investigation, Securities and Exchange Board of India found evidence of connections among the noticees, how the guest experts shared advance information with the profit makers, and how these profit makers took advanced positions in trades based on such non-public information. Based on its findings, SEBI found various noticees prima facie guilty of violating provisions of the SEBI Act and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations. It came to the prima facie conclusion that a sum of ₹7,41,29,648 was required to be impounded jointly and severally from the noticees. The noticees were asked to show cause as to why further action should not be taken against them under the Regulations.”
This development is a clear signal from SEBI that it remains vigilant in its oversight of the securities market, ready to take action against any entity or individual that threatens the market’s fairness and transparency. By holding market participants to the highest standards of conduct, Securities and Exchange Board of India aims to protect investors and reinforce the foundational principles of integrity and trust that underpin the securities market in India.
