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Influencer Crackdown Raises Questions on Market Oversight
Asmita Patel, a self-proclaimed “She-Wolf of the Stock Market”, built a massive following with promises to “make India trade” through her financial courses. But last month, India’s Securities and Exchange Board (Sebi) barred Patel and six others from trading, accusing them of illegally selling stock tips disguised as investor education and profiting heavily.
Her case highlights a growing challenge for Indian regulators: how to crack down on misleading financial influencers without stifling genuine market education.
Social Media’s Role in India’s Trading Boom
India’s stock market saw a post-pandemic boom, attracting millions of first-time investors. According to brokerage Zerodha, online trading accounts skyrocketed from 36 million in 2019 to over 150 million in 2023. With only 950 registered investment advisors and 1,400 financial advisors, many novice traders turned to social media for guidance, fueling the rise of self-styled investment gurus like Patel.
This trend prompted Sebi to tighten its grip on unregulated financial influencers, banning multiple individuals—including a Bollywood actor—from offering stock advice.
The Allegations Against Patel
According to Sebi, Patel and her husband, Jitesh, ran an unregistered advisory firm, directing students and investors to trade specific stocks via private Telegram channels, Zoom calls, and paid courses. Complaints from 42 participants who suffered trading losses led the regulator to investigate, and it now plans to seize millions of rupees Patel earned from course fees between 2021 and 2024.
Despite branding herself as a successful trader, Sebi’s findings revealed Patel earned just $13,700 from actual trading in five years, while making over $11.4 million from selling courses. Patel has not responded to media inquiries.
Regulators Face Backlash Over Delayed Action
While Sebi’s crackdown aims to protect small investors, critics argue it acted too late. Veteran financial journalist Sucheta Dalal called it a case of “selective regulation”, pointing out that influencers were promoting brokerages for years before authorities intervened.
Sumit Agrawal, a former Sebi officer, believes the regulator is overcompensating by introducing broad restrictions that might discourage legitimate market education.
Regulating Without Overreach
The enforcement of stricter regulations has sparked uncertainty among content creators. YouTuber Manish Singh, who has half a million followers, warns that even genuine educators might suffer, as investor confidence in social media creators declines.
Sebi’s extensive powers—which include the ability to ban trading, freeze bank accounts, and conduct searches without court approval—already make it one of the most powerful market regulators globally. A Reuters report reveals Sebi is now seeking greater authority to access call records and social media chats for investigations.
Experts caution that while clamping down on misleading financial influencers is necessary, overregulation could stifle financial literacy and genuine market education. The challenge for regulators will be striking the right balance—without discouraging responsible trading guidance.
Gill Bikram Singh