SEC warns rogue market influencers

Tells investors to ’ride the bull, not become one’

Actual social media posts by self-styled market gurus as compiled by the Securities and Exchange Commission 

• Dispensing investment recommendations without being a Registered Investment Advisor is a prosecutable offence carrying fines of at least Rs.10mn or up to 10 years in prison
• Regulator says it has been observing a surge in social media accounts and groups providing investment advice and recommendations, especially in recent weeks
• Says some have gone as far as predicting share prices with promises of guaranteed returns

By Shabiya Ali Ahlam
The capital market regulator, the Securities and Exchange Commission (SEC), yesterday sounded its sternest warning yet, as a new breed of self-styled “market gurus” tighten their grip on social media. 
The alert, tagged pointedly as “Ride the Bull, Don’t Become One”, took direct aim at those pushing unvetted stock tips and falsely packaged “education” to unsuspecting investors.
In an unusually blunt alert, the SEC took to its social media platforms to caution that dispensing investment recommendations without being a Registered Investment Advisor is a prosecutable offence carrying fines of at least Rs.10 million or up to 10 years in prison.
Speaking to Mirror Business, the SEC asserted it is prepared to come down hard on those fuelling the latest wave of market misinformation.
According to SEC Officer-in-Charge and Deputy Director General Tushara Jayaratne, the regulator has been observing a surge in social media accounts and groups, on platforms such as Facebook, X (formerly Twitter), WhatsApp, Telegram, TikTok, Instagram and YouTube, providing investment advice and recommendations, especially in recent weeks.
“Some individuals and groups have gone as far as predicting share prices, with promises of guaranteed returns, while others are hosting forums and issuing investment recommendations. Some individuals and groups are operating social media accounts anonymously,” shared Jayaratne. 
He went on to stress that “no one” is permitted to give investment advice unless they are a Registered Investment Advisor affiliated with a licensed stockbroker firm.
“One of the core objectives of the SEC is to safeguard investor interests. Therefore, we will take strict action against anyone who violates the SEC Act,” he said.