SEC warns YouTubers, social media content creators
The Securities and Exchange Commission (SEC) is constantly and consistently warning social media content creators on the repercussions of promoting stocks on social media and also taking action against capital market manipulators.
The SEC on October 26 issued a letter of warning to K.G.D.C. Rukshan for publishing certain posts on social media, making recommendations and comments on securities trading on the Colombo Stock Exchange (CSE) without a proper basis, and without being registered by the SEC as a Registered Investment Advisor. Social media content, which is tantamount to recommendations, should not be made without proper basis and without being a Registered Investment Advisor or a body licensed by the SEC, it said in a Twitter message recently.
Certain YouTube content creators and other social media stock promoters have been warned over the past few months.
The capital markets regulator has also intensified probes on high networth individuals and has called certain traders to show cause pertaining to offences committed over the past few years. The SEC issued a letter of warning on September 26 to I.E. Abeyratne for trading in the shares of Hunas Falls PLC during the period 2nd January to 9th January 2019 after considering certain mitigatory factors surrounding his trades. On September 26 it warned L. T. Samarawickrama for communicating certain information he possessed by virtue of being a connected person to Hunas Falls PLC during the period January 2 to January 9 2019 which information was used by another to trade in the securities of that listed entity.
Upon a request to compound, with regard to creating a false market or misleading appearance of active trading in the shares of Commercial Leasing & Finance PLC (CLC) during the period, 09th – 25th August 2021, the SEC decided to compound the offence by K.D. Gunaratna as provided for in the Act after he paid Rs. 3.3 million to the Compensation Fund of the SEC.
However still certain traders feel that SEC and the CSE has much to prove. To a tweet by SEC saying, “Like most stock markets, the CSE is a disclosure-based market. It is the responsibility of a Listed Company to disclose all material information accurately, in a timely manner,” an investor had replied; “Anyone with intelligence and perspicacity knows the CSE is a specialised ‘pump and dump’ insider trading entity for Lankan Oligarchs to suck blood from the gullible public looking for the quick buck and the proverbial but non-existent pot at the end of the rainbow.”
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