Background
In the digital age, finance is as much about algorithms and markets as it is about narratives and personalities. A generation of finfluencers, financial influencers on social media platforms, has risen, attracting millions of aspiring retail investors with bold stock picks, promises of life-changing returns, and alluring portrayals of wealth creation. For many, these charismatic figures appear as benevolent mentors guiding the uninitiated through the labyrinth of markets. But when influence crosses the line into unregulated financial advice, the consequences can be severe. Over the past decade, digital platforms have transformed how individuals learn about finance and investing. YouTube channels, Instagram reels, Telegram groups, and other online forums now disseminate investment content at an unprecedented scale. Many finfluencers began as educators, sharing insights aimed at demystifying markets for novice investors. However, as their audiences grew, so did the commercial imperatives behind their channels. Paid subscriptions, exclusive groups, online courses, and premium tip services became commonplace. In some cases, the boundary between education and investment advisory blurred, and that is precisely where SEBI’s regulatory framework becomes relevant.
What’s the Controversy?
The morning air in Karjat is usually still, but in August 2025, it was filled with the arrival of investigators from the Securities and Exchange Board of India. This search and seizure operation at the Avdhut Sathe Trading Academy was the culmination of years of quiet monitoring by the market regulator. For nearly two decades, Avdhut Sathe had cultivated the image of a master trader who combined technical prowess with spiritual discipline. His academy promised to turn ordinary people into wealthy market participants through a mix of psychology, technical analysis, and community support. However, the evidence collected during the thirty-six-hour raid suggested that the education being provided was a thin cover for a massive, unregistered advisory business. Under Indian law, any entity providing tailored investment advice or specific buy/sell recommendations must register with SEBI as an investment advisor or intermediary. This registration is not a mere formality: it ensures that advice is provided under a framework designed to protect investors, including mandatory disclosures, conflict-of-interest management, qualifications and certifications, and mechanisms for grievance redressal. Unregistered advice may expose investors to significant financial risk without any recourse. Yet many finfluencers operate outside this legal mandate, offering actionable trading strategies under the guise of education. SEBI views such practices as dangers masquerading as learning.
In December 2025, SEBI’s crackdown reached a turning point with its action against Avadhut Sathe, a well-known figure in India’s trading education space. Sathe, founder of the Avadhut Sathe Trading Academy (ASTA), built a substantial following by offering stock market training programs and online mentorship to a vast audience of retail investors. According to SEBI’s interim order, Sathe conducted unregistered investment advisory activities and provided specific trading examples and market predictions in his courses, practices that fall squarely within the ambit of regulated advisory services. As a result, SEBI imposed a ban on Sathe’s participation in the securities market and impounded over ₹546 crore of alleged unlawful gains linked to these activities. This action was historic not only for the size of the amount involved but also for its symbolic weight. It marked one of the most stringent enforcement moves SEBI has taken against a finfluencer, signaling a clear regulatory stance: charismatic personalities cannot circumvent the law simply because their delivery mechanism is digital and entertaining. In the past, SEBI had acted against finfluencers on a smaller scale, including bans and refunds in cases involving tens of crores, but the Sathe order dwarfs those efforts in scale and impact.
Gamification of Markets
What precisely led SEBI to take such draconian action? Beyond the lack of registration, the regulator documented practices that went beyond generic knowledge sharing into the realm of specific, actionable investment guidance. For example, videos and course content allegedly walked students through real-time trades, including exact entry and exit points, an activity that, from a legal perspective, constitutes investment advice. Additionally, promotion via selective success stories and testimonials created unrealistic expectations about returns, further blurring the line between education and unregulated financial promotion. The regulatory response is rooted in investor protection. Unlike registered advisors, who must adhere to fiduciary duties and standardized processes, unregistered influencers often operate without oversight or accountability. Their followers, usually retail investors with limited market experience, are particularly vulnerable to biased or ill-informed recommendations. In markets with high retail participation, such guidance can amplify herd behavior, contribute to market distortions, and, worst of all, result in significant personal financial losses for everyday investors. The situation is reminiscent of historic episodes like the US stock-market bubbles fueled by unregulated tipsters, where enthusiasm outpaced fundamentals and costs were borne by the most vulnerable participants.
Was SEBI’s action correct?
SEBI’s approach mirrors global trends. Financial markets regulators worldwide are grappling with how to oversee advice disseminated via digital platforms. In the United States, the Securities and Exchange Commission (SEC) has long enforced rules on investment advice, ensuring that those providing such guidance do so under regulated frameworks. India’s step to extend these principles into the digital influencer ecosystem reflects a maturation of regulatory thinking, acknowledging that the medium, whether social media or traditional channels, does not change the nature of the service provided.
Critics of the crackdown argue that the regulatory framework was not originally designed with digital influencers in mind, leading to ambiguity about what constitutes advice versus education. Some finfluencers claim that their content is purely informational and not tailored to individual investment decisions. The legal definitions around advice versus education continue to be debated, with calls for more clarity in regulations to help content creators understand their obligations without stifling legitimate educational efforts. Nevertheless, SEBI’s firm stance suggests that generic disclaimers are insufficient when the substance of content includes specific trade recommendations or actionable strategies. Beyond individual cases, SEBI has broadened its efforts to curate the informational environment. It has reportedly taken steps to remove tens of thousands of misleading investment posts and channels from social platforms, attempting to prune out content that could harm investors. These actions underscore the breadth of the challenge regulators face in a decentralized, user-generated content landscape where reach can rival that of established media with far less accountability.
The Way Forward
For investors, SEBI’s crackdown serves as a potent reminder of the importance of due diligence and critical thinking. Reliable financial guidance should come from sources that are transparent, regulated, and accountable. Retail investors should be wary of promises of guaranteed returns, secret formulas, or exclusive communities that charge for access to supposedly privileged information. Registrations with SEBI and compliance with established investment adviser norms are not bureaucratic hurdles; they are safeguards designed to protect both markets and participants. The implications of SEBI’s actions extend beyond any single finfluencer. They signify a shift in how India’s financial regulatory architecture adapts to the digital age. As social media continues to democratize access to financial knowledge, regulators must balance two competing imperatives: enabling financial literacy while preventing misinformation and harm. SEBI’s recent enforcement actions suggest that India is willing to impose strict boundaries on digital financial influence to uphold market integrity. For finfluencers themselves, the message is unmistakable: popularity does not confer regulatory immunity. Those who wish to operate legitimately within India’s financial ecosystem will need to engage with SEBI’s frameworks, register appropriately, and adhere to standards of conduct designed to protect investors. This may not only enhance the credibility of the finfluencer community but also foster a healthier, more sustainable environment for financial education and engagement.