SEC crackdown on rogue market advisors intensifies

• Fires off first- ever scam alert
• Declares ‘Blue Ocean Securities’ not licensed to trade securities in Sri Lanka. Its Chief Analyst and assistant are not registered investment advisors

Capital market regulator, the Securities and Exchange Commission (SEC) has escalated its enforcement drive as it yesterday issued its first-ever scam alert. It named Blue Ocean Securities Ltd as an unlicensed and unauthorised operator posing a direct risk to investors as it is operating entirely outside the law.

In a hard-hitting statement, the SEC declared that Blue Ocean Securities is not licensed to trade securities in Sri Lanka and that its Chief Analyst and assistant are not registered investment advisors. 

The regulator also confirmed that the firm does not appear on the UK Financial Conduct Authority’s Financial Services Register, affirming that it lacks authorisation in the UK as well. The SEC called the situation a “serious threat to investor safety” and shared it has already activated regulatory action in coordination with the Criminal Investigation Department (CID) and local banks. Investors have been strongly warned to cut all ties immediately, avoid transactions, stop deposits, and exit any WhatsApp groups or online channels linked to the company.

The SEC stressed that investors must only deal with licensed stockbrokers and open a CDS account before making any trades. Lists of authorised brokers are available on the SEC and Colombo Stock Exchange websites.

Just last week, the SEC posted a rare, pointed message on its official social media channels, cautioning that unregistered investment advice is a criminal offence punishable by minimum fines of Rs. 10 million or up to 10 years in prison.

The SEC told Mirror Business that it is ready to “come down hard” on those driving the latest surge in misinformation and market manipulation. 

The watchdog has observed a rapid rise in unregulated voices across Facebook, X, WhatsApp, Telegram, TikTok, Instagram and YouTube, many of which are pushing aggressive recommendations to unsuspecting retail investors.  (SAA)