‘Shush’ to social media on stocks
The capital market regulator is closely monitoring those offering investment advice on social media channels and has issued warnings to such unlicensed advisors to curb market manipulation.
“No one can give investment advice unless they are a registered investment advisor (RIA),” Tushara Jayaratne, Deputy Director General Securities and Exchange Commission (SEC), told the Sunday Times Business. No one can promote buy or sell recommendations, unless it’s a registered investment advisor attached to a stockbroking firm, he added. He said that the SEC has observed YouTube channels, WhatsApp groups, and X accounts disseminating such recommendations. “We are tracking them, and closely monitoring them, and some have been warned by the SEC,” he said further.
Being an RIA is a requirement for anyone submitting such advice, he said. The SEC has issued warnings to companies and individuals regarding “reckless conduct” in sharing information on social media. In 2023, the regulator banned an 18-year-old from the industry for five years for continuing to give investment advice on Twitter. The regulator has also intensified its scrutiny of financial influences on platforms such as Facebook and Twitter.
The SEC also started a dedicated website page in February 2024, allowing anyone to confidentially report suspected market-related misconduct on social media.
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