Scroll through social media for a few minutes and you’ll find endless videos promising quick profits, secret strategies, and effortless stock market success. Confident voices, flashy lifestyles, and bold claims make investing look simple and risk-free. For many new investors, these creators feel more relatable and trustworthy than regulated professionals.
The problem begins when the promises fail. Trades go wrong, money is lost, and the influencers who made the claims disappear or deny responsibility. There are no disclosures, no accountability, and no clear way for investors to seek answers. This growing gap between influence and responsibility is what finally forced regulators to step in.
Social media has reshaped how investors learn about markets, but it has also blurred the line between education and unregulated financial advice. In several cases, finance influencers crossed that line by offering stock tips, trading calls, and investment strategies without proper registration or oversight.
After mounting complaints, financial losses, and widespread misinformation, SEBI stepped in with decisive action.
SEBI action against finfluencer like Baap of Chart, Avadhut Sathe penalty order sends a clear message: popularity does not replace compliance, and influence does not exempt anyone from the rules. Financial advice carries real consequences, and it must be backed by responsibility, transparency, and regulatory accountability.
How Unregulated Finfluencers Put Investors at Risk?
In today’s digital world, many investors begin their financial journey not through books or certified advisors, but through short videos, reels, and live sessions on social media. Platforms like YouTube, Instagram, and Telegram are filled with creators who confidently talk about stocks, trading strategies, and market opportunities. They simplify complex topics, use relatable language, and often appear more approachable than traditional financial professionals.
For first-time and retail investors, this content feels educational and reassuring. Many people trust these voices long before they ever speak to a licensed financial advisor. However, as the influence of finfluencers has grown, so have concerns about where education ends and illegal financial advice begins.
Understanding how finfluencers operate is essential for investors today. Clear information helps distinguish genuine financial education from paid promotions, marketing-driven content, or unregistered advisory services. This awareness forms the foundation for evaluating risk, responsibility, and investor protection.
Who Are Finfluencers and Why Are They So Influential?
Finfluencers are digital content creators who focus on finance-related topics such as stocks, derivatives, mutual funds, cryptocurrencies, budgeting, and trading strategies. They typically operate on social media platforms and present themselves as friendly educators rather than formal experts.
Some finfluencers come from finance or market-related backgrounds, while others build credibility by showcasing their personal trading success, luxury lifestyles, or screenshots of profitable trades. Their content is designed to be engaging, emotional, and easy to consume. Storytelling, market excitement, fear of missing out (FOMO), and bold claims are commonly used to attract and retain followers.
Many finfluencers earn money through:
- Paid courses and mentorship programs
- Affiliate links and referral commissions
- Brand partnerships and promotional campaigns
- Subscription-based trading communities
Without proper regulation, these income models can influence what is promoted. This creates a serious conflict of interest, where recommendations may prioritize earnings for the creator rather than suitability or safety for the investor. When such activity crosses into personalized advice or trading recommendations, it falls under SEBI’s regulatory framework.
Complaints Against FinFluencers
As finfluencer content expanded rapidly, complaints from investors began to rise. Many investors reported losses after following risky trading tips, undisclosed promotions, and paid advisory services that were not registered with SEBI. Concerns emerged around misleading claims, lack of transparency, and absence of accountability.
SEBI observed repeated violations involving:
- Unregistered investment advisory services
- Stock tips disguised as “education”
- Inducement through LIVE trading
- Hidden advertisements and paid promotions
- Claims of assured or high returns
- Real-time trading recommendations
These patterns raised serious questions about investor safety. In response, SEBI began taking visible and strict enforcement actions to protect retail investors and reinforce regulatory boundaries.
SEBI’s Action Against ‘Baap of Charts’
One of the most prominent enforcement cases involved Mohammad Nasiruddin Ansari, popularly known online as ‘Baap of Charts’, along with Rahul Rao Padamati and Golden Syndicate Ventures Pvt. Ltd.
SEBI initiated recovery proceedings amounting to ₹18.14 crore after the individuals failed to comply with earlier regulatory orders. The regulator found that they were operating an unregistered investment advisory service under the name “Baap of Charts,” providing buy and sell recommendations while presenting the activity as educational content.
SEBI concluded that:
- Specific trading recommendations were being provided
- Claims and suggestions around returns were made
- Investors were charged fees for advisory-like services
- Prior orders for refunds and penalties were ignored
Despite demand notices issued in May 2025 and directions from the Securities Appellate Tribunal, the amounts were not paid. As a result, SEBI froze bank accounts, demat holdings, mutual fund investments, and restricted the sale or transfer of properties until recovery was complete.
This case highlighted that ignoring regulatory orders can lead to severe enforcement actions beyond monetary penalties.
Avadhut Sathe Penalty
SEBI’s largest finfluencer-related enforcement action involved Avadhut Sathe and his firm, Avadhut Sathe Trading Academy Pvt. Ltd. (ASTAPL).
In December 2025, SEBI issued an interim order barring Sathe and his firm from accessing the securities market and ordered the freezing of ₹546.16 crore, which SEBI identified as illegal gains.
The investigation revealed that:
- Over ₹601 crore was collected from more than 3.37 lakh participants
- Paid courses and mentorship programs offered real-time trading advice
- Live sessions included entry points, exit levels, stop-losses, and targets
- Performance claims highlighted only successful trades while ignoring losses
SEBI found that these activities went far beyond education and clearly qualified as unregistered investment advisory and research analyst services. The regulator also noted that these practices continued even after SEBI issued warnings in March 2024.
The funds were frozen to prevent further misuse while legal proceedings continue. This case reinforced that scale, popularity, or branding does not exempt anyone from regulatory compliance.
SEBI’s Action Against Asmita Patel
SEBI Another Big Move widely discussed case involved finfluencer Asmita Patel, whose content and paid programs came under SEBI’s scrutiny. SEBI observed that her offerings included structured trading guidance, promotional claims, and paid investor programs without proper registration.
The regulator examined whether:
- Advice crossed into personalized recommendations
- Marketing claims misrepresented potential outcomes
- Proper disclosures and regulatory registrations were in place
SEBI’s action against Asmita Patel further emphasized that even well-known educators and trainers must comply with registration, disclosure, and conduct requirements when offering financial guidance for a fee.
SEBI Guidelines and Restrictions on Finfluencers
These cases send a clear message. If someone:
- Gives financial advice without registration
- Charges fees for trading tips or recommendations
- Promises guaranteed or consistent returns
- Provides real-time buy or sell suggestions
They may face serious consequences, including heavy fines, market bans, asset freezes, and refund obligations. Popularity, follower count, or the label of “educator” does not shield anyone from regulatory action.
SEBI has laid down strict rules to control finfluencer activity:
- Registered intermediaries cannot partner with unregistered finfluencers
- Misleading promotions and hidden advertisements are prohibited
- Real-time trading tips are not allowed under the guise of education
- Finfluencers must register as Investment Advisors or Research Analysts to give advice
- Educational content may only use market data older than three months
- Guaranteed return claims are strictly prohibited
- Registration numbers and official contact details must be clearly disclosed
- All advertising and content must follow SEBI’s code of conduct
SEBI’s New Finfluencer Rules (2026)
In 2026, SEBI introduced stricter rules to strengthen accountability:
- Mandatory registration for anyone offering investment advice
- Clear disclosure of sponsorships, affiliations, and paid partnerships
- Ban on indirect commissions and referral-based incentives
- Prohibition on performance guarantees and selective result showcasing
- Responsibility placed on social media platforms to flag or restrict violative content
Violations can result in heavy penalties, bans, and reduced online visibility.
How to File a Complaint Against Finfluencer?
Investors who suffer losses due to misleading or unregistered advice should act quickly.
Steps to file a complaint:
- Collect evidence such as screenshots, videos, payment receipts, and messages
- Check whether the influencer is SEBI registered
- File a complaint on the SEBI SCORES portal if registered.
- In case of an unregistered entity, file a complaint with SEBI by sending an email along with all the proof.
- Select the appropriate category, such as unregistered advisory or misleading promotion
- Upload documents and track the SEBI complaint status
Need Help?
Many investors feel overwhelmed after losing money due to misleading online advice. Confusion, stress, and uncertainty are common reactions.
Register with us, and we help investors understand what went wrong, organize evidence, and follow the correct regulatory process. From documentation to complaint filing, we provide step-by-step guidance to reduce mistakes and delays. You don’t have to face the process alone.
Conclusion
Social media has changed how investors learn about finance, offering easy access to information but also increasing exposure to misleading advice. SEBI’s actions against finfluencers like Baap of Charts, Avadhut Sathe, and Asmita Patel make it clear that influence does not replace responsibility.
Investor safety depends on awareness, verification, and caution. Always check registrations, avoid guaranteed return claims, and maintain records of all financial interactions. Staying informed and alert helps investors protect their interests, supporting a safer and more transparent financial ecosystem.
