In a significant move, the Securities and Exchange Board of India (SEBI) has ordered the social media channel ‘Baap of Chart’ and its key figures to refund nearly ₹17.2 crore to subscribers. This decision highlights the ongoing crackdown on unregistered financial influencers, commonly known as ‘finfluencers’, who have been exploiting social media to offer unauthorized investment advice.
The primary figure behind ‘Baap of Chart’, Mohammad Nasir, has been fined ₹15 lakh and faces a year-long ban from the securities market. The order, which spans 49 pages, also imposes a penalty of over ₹30 lakh on six individuals and a company associated with the channel, with bans ranging from six months to one year.
SEBI’s investigation revealed that ‘Baap of Chart’ leveraged theatrics and showmanship in promotional videos to create the illusion of guaranteed high returns, thereby attracting and inducing uninformed viewers to join paid trading courses. This led to Nasir and his associates collecting significant fees from followers under the guise of providing expert investment strategies.
This case underlines the issues stemming from the rise of finfluencers who operate without the necessary qualifications or registrations required under the SEBI Investment Adviser Regulations (IA Regulations), 2013. The regulator noted that such influencers often engage in manipulative practices by buying shares and then promoting these stocks on social media to drive up prices before selling them at inflated prices, often at the expense of their subscribers.
In response to the growing concern over such practices, SEBI has tightened regulations for registered intermediaries in the capital markets to prevent associations with unregistered entities that claim to offer investment advice. These measures aim to protect investors from fraudulent schemes and ensure transparency in the financial marketplace.
