SEBI Flags Nearly 9,000 Misleading Social Media Posts on Securities Market

The Securities and Exchange Board of India (SEBI) is the regulatory framework that helps maintain the integrity of the stock market by enforcing strict guidelines and rules that govern the conduct of market traders and investors. By monitoring and supervising the activities of various entities involved in the securities market, SEBI aims to prevent fraudulent practices, insider trading, market manipulation and the dumping of stocks. In addition to its regulatory role, SEBI also plays a key role in promoting investor education and awareness. Through various initiatives and programs, SEBI aims to empower investors with knowledge and information that can help them make informed investment decisions. By fostering a culture of transparency and accountability in the securities market, SEBI contributes to building trust and confidence among investors, which is essential for the growth and development of the Indian financial system. SEBI is playing the middleman role for traders and investors to secure their funds from different scams. With their scrutiny process and timely actions against individuals and companies involved in scams, investors’ money is secure and safe.  Overall, SEBI’s efforts are instrumental in creating a fair, efficient, and transparent securities market that benefits all stakeholders, from individual investors to institutional players. By upholding high standards of governance and compliance, SEBI plays a crucial role in safeguarding investors’ interests and maintaining stability.

Misleading more than 9000 posts on social media:

The Securities and Exchange Board of India (SEBI) has identified and flagged 8,890 instances of unlawful or misleading content related to securities markets on social media for legal action, Pankaj Chaudhary, minister of state for finance, said in reply to a parliamentary query.

Action against misleading posts on social media

Capital market regulator SEBI has flagged nearly 9,000 pieces of content from various social media sites such as Facebook, Instagram, YouTube, and Telegram as false claims related to the securities market.  SEBI has officially notified relevant platforms and apps, including Facebook, Instagram, Telegram, YouTube, etc., seeking firm legal action against those promoting false claims around the stock market.Rajya Sabha was informed on July 30 that, as of July 17, 2024, SEBI had notified the relevant social media platform providers of more than 9,000 unlawful or misleading social media posts pertaining to the securities market for legal action.

Increased Finfluencers

In the past year, SEBI has consistently gotten involved to curb the spread of illegal stock advice or misleading posts on finance by financial influencers, or so-called finfluencers.

Many of these influencers are sharing fake profit screenshots on social media platforms such as Telegram and Instagram. According to sources, over 70% of people believe in them, with 30% placing complete trust in such content. Consequently, many individuals are falling into the trap and incurring significant losses. It is important to note that these influencers are not registered with SEBI.

Recent action by SEBI

As per the circular dated May 27th from SEBI, all investment advisors are required to update their social media pages, various channels, social presence, blogs, and pages twice a year. In a recent move, SEBI has taken action against influencers such as P. R. Sundar, Syyed Shujauddin, Ruchit Gupta, Ansari (Baap of Charts), and Ravindra Balu Bharti. They have been prohibited from trading and fined heavily for misleading profit commitments and selling finance courses.

Conclusion: SEBI is now taking strong action against scammers who are highly active on social media, promoting false profits and selling financial courses that result in heavy losses for traders and investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.