The Securities and Exchange Board of India (SEBI) imposed a penalty of Rs 6.5 crore and a one-year trading ban on PR Sundar, a renowned YouTuber and options trader, for alleged violations of investment adviser norms. This action marks the first instance of action taken against a finfluencer (financial influencer) by the market regulator.

SEBI’s investigation revealed that PR Sundar was operating the website www.prsundar.blogspot.com, where he offered various packages for providing advisory services. Payments for these services were collected through a payment gateway linked to the bank account of Mansun Consultancy Pvt Ltd, of which Sundar is a co-promoter.

SEBI noted that the firm recommended purchasing, selling, and dealing securities, activities without a registered investment advisory business.

The case, dating back to 2022, involved PR Sundar, his company Mansun Consulting, and Mangayarkarasi Sundar, a co-promoter of the company. They are strictly prohibited from buying, selling, or dealing in securities for one year from the date of the settlement order.

As part of the settlement, they agreed to pay a settlement amount of Rs 46.80 lakh (Rs 15.60 lakh for each Mansun Consultancy & 2 of its directors) and disgorge Rs 6 crore, which includes the profits earned from the advisory services amounting to Rs 4.6 crore and the associated 12% interest.

Recently, Finance Minister Nirmala Sitharaman also addressed the concerns related to financial influencers in India and cautioned about the dangers posed by Ponzi apps offering financial solutions. While there is currently no proposal to regulate “finfluencers,” a word of caution is essential.