In a first, SEBI acts against finfluencer PR Sundar over violation of investment adviser norms

In probably one of the first cases of action against a financial influencer or 'finfluencer', the Securities and Exchange Board of India (SEBI) has penalised and barred YouTuber and options trader PR Sundar from engaging in trading for a year over alleged violations of investment adviser norms. 

Finfluencer PR Sundar, his company Mansun Consultancy, and co-promoter Mangayarkarasi Sundar, have reached a settlement regarding SEBI complaints alleging they were providing investment advisory services without the necessary registration from the regulatory body. The case dates back to 2022.

According to the SEBI order, Sundar was operating a website (named prsundar.blogspot.com), which offered different packages for advisory services, and the fees collected for these services were received through a payment gateway connected to the bank account of Mansun Consultancy, held with ICICI Bank. Mansun Consultancy was established on June 30, 2017. PR Sundar and Mangayarkarasi Sundar, who both hold 50% shares, are the promoter directors of the company. 

Mansun submitted a list of recommendations for the month of January 2021 via email on March 17, 2022, in response to an inquiry.

After analysis of a recommendation, SEBI discovered that it pertained to purchasing/selling/dealing in securities, which were conveyed to the clients.

Therefore, it was alleged that the recommendations given by Mansun fall under the category of 'investment advice' as defined under Reg.2 (1) (I) of SEBI (Investment Advisers) Regulations, 2013. 

Further, on account of the above activities, it was alleged that the applicants have engaged in the activities of an 'investment adviser' as defined under regulation 2 (m) of IA Regulations. 

Once their violation was proved, Mansun agreed to pay a revised settlement amount of Rs 15,60,000 each that is a total sum of Rs 46,80,000 to SEBI, disgorgement amount of Rs 6,07,69,863, including interest at 12% p.a. from June 1, 2020, till the date of submission of the RST. 

As part of its order, SEBI instructed the applicants to refrain from buying, selling or otherwise dealing in securities in India for a period of one year from the date of passing of the Settlement Order (May 25). 

Following SEBI's crackdown, Sundar put out a tweet, which read, "People who believe you, need no explanation. People who do not believe you, no amount of explanation will help. So keeping silent, at least for some time, is the best response."