In recent months, the Securities and Exchange Board of India (SEBI) has intensified its crackdown on financial influencers (finfluencers) misleading retail investors. Two high profile cases—Ravindra Balu Bharti and Asmita Patel (“She-Wolf”)—highlight the risks of following unverified investment advice on social media. This blog explores their modus operandi, how investors fell for their schemes, and how you can invest safely.
Case 1: Ravindra Balu Bharti – The YouTube Trap
Ravindra Balu Bharti, along with his company `Ravindra Bharti Education Institute’, used his large YouTube following to promote investment advisory services without SEBI registration. His channels had over 10.8 lakh and 8.33 lakh subscribers, making his influence significant.
The company lured inexperienced investors by:
– Offering trade recommendations under different investment plans.
– Encouraging multiple subscriptions per client without full risk disclosure. – Providing limited investor control over their own trades.
How Investors Fell for It
– Trust in Social Media Popularity: Many assumed high subscriber counts equated to credibility.
– Promises of High Returns: Investors believed in “proven” stock strategies. – Lack of Financial Knowledge: Many did not verify if Bharti was SEBI-registered. SEBI’s Action
– ₹9.49 crore disgorgement order with 6% interest.
– Ban from securities markets until April 2025.
– ₹10 lakh penalty on associated entities
Case 2: Asmita Patel (“She-Wolf”) – The Trading Guru Scam
Asmita Patel, known as the “She-Wolf of the Stock Market”, built her reputation through online trading courses. Her firm, Asmita Patel Global School of Trading Pvt Ltd, ran programs like LMIT and MPAT, promising returns of up to 300%.
Her misleading claims included:
– Managing a ₹140 crore portfolio, which SEBI found exaggerated.
– A trading volume of ₹152.79 crore without corresponding profits.
– Selling expensive courses under the guise of proven stock market strategies.
How Investors fell for it
– High Returns Promised: Unrealistic returns attracted greedy investors.
– Professional Branding: Her courses and testimonials looked legitimate.
– Fear of Missing Out (FOMO): Investors wanted to capitalise on her “secret” strategies.
SEBI’s Action
– ₹54 crore seized from her company.
– Further investigation into ₹104.6 crore from course fees.
– Ban on trading in Indian stock markets
How to Avoid Falling for Finfluencer Scams
- Check SEBI Registration
– Legitimate investment advisors must be SEBI-registered. Search their name on the SEBI website ([SEBI Registered Advisors List](https://www.sebi.gov.in/)) before acting on their advice.
- Be Wary of Unrealistic Returns
– No strategy guarantees 300% returns or any return. Only fixed income instruments like Fixed Deposits and Bonds give a certain return by way of interest every year. Even this return is subject to credit risk (ie the issuer may default in the payment of interest as well as principal). Investing involves risks, and anyone promising quick profits is likely misleading you.
- Avoid Unverified Social Media Advice
– Many finfluencers make money from views and sponsorships, not from actual investing. Further, check and compare their returns with what the markets have given. If PMS managers and mutual funds cannot give significantly higher returns than the
benchmarks, then nobody can give high returns and any promise or assurance of such high returns should not be considered.
- Don’t Fall for FOMO
– Stock market success is about patience. If it sounds too good to be true, it probably is.
- Verify Investment Products
– If someone asks you to buy a course, subscription, or stock tips, ask yourself: Why are they selling this if they can make money trading?
The Right Way to Invest
- Choose SEBI-Registered distributors and producers
– Choose to invest in mutual funds, Portfolio Managers and Alternative Investment Funds which are licenses and regulated by Sebi. Also, check whether the person dealing with you is registered either as a mutual fund distributor with AMFI or as an Investment Advisor with Sebi. Consider the education and experience of the person advising you. Check whether they have the right investment qualifications such as CFA, CFP, etc and have been in the business of investment advisory for a considerable period of time.
- Diversify Your Investments
– Never put all your money into a single stock or strategy. Use mutual funds, ETFs, and index funds for balanced growth. Invest a portion of your wealth in fixed income instruments such as fixed deposits, Public Provident Fund, Post office deposits, bonds and debentures and debt mutual funds. Remember the thumb rule of equity allocation – 100 minus your age. The rest should be in fixed income and gold.
- Learn the Basics
– Instead of following social media advice, educate yourself through SEBI’s investor awareness programs or reliable finance books.
- Think Long-Term
– Stock markets reward patience, not speculation. Focus on consistent, compounding growth instead of quick gains. Don’t indulge in trading. Own good companies and ensure that you own shares of more than 20 companies. However, do not over diversify. Owning more than thirty companies or many mutual funds will become to cumbersome to manage.
- Use Trusted Platforms
– Invest through registered brokers and financial platforms.
Final Thoughts
SEBI’s crackdown on finfluencers is a wake-up call for investors. While social media can provide useful insights, relying on unregulated advisors can lead to massive financial losses. Stay informed, invest wisely, and always verify the credibility of financial advice before taking action.
About EquiZen
EquiZen is a registered mutual fund and PMS distributor, committed to offering transparent and well-researched investment solutions. We ensure that all recommended investments are credible, well-regulated, and aligned with your financial goals. Visit www.equizen.in or contact us at +91 9820605203 via call or WhatsApp. You can also email us at sanjay@equizen.in for expert financial guidance. Secure your investments with knowledge and diligence.
