Finfluencer red flags: how to spot risky market advice online

Education or advice: the line that matters

Teaching how markets work is allowed for anyone. Telling people which security to buy or sell is advice or research, and needs a SEBI registration as an investment adviser or research analyst.

SEBI's circular of January 2025 made this sharper. A person who is only an educator must not use market prices from the previous three months to talk about a security, and must not name a security or use a code name to suggest where its price will go. SEBI-regulated entities are also barred from tying up with unregistered people who give advice or make return claims.

10 red flags

• Guaranteed, fixed or "sure-shot" returns.
• Screenshots of profits as proof. They are easy to fake and never show the losses.
• A paid Telegram or WhatsApp group for calls or tips.
• No SEBI registration number, or one that does not match SEBI's website.
• Live buy and sell calls presented as "education".
• Small, little-known stocks pushed to a large audience. This is how pump-and-dump schemes work: the promoters sell while followers buy.
• Offers to trade in your account, or requests for your login, OTP or screen sharing.
• Pressure to act now: countdowns, "last few seats", "price going up tonight".
• A lavish lifestyle used as the main proof of skill.
• Account-opening or app links without saying they earn a commission from them.

Questions to ask before you trust any source

• Are they registered with SEBI, and does the number match on sebi.gov.in?
• How do they earn money: from teaching, from commissions, or from your trades?
• Do they show losses and risks as clearly as gains?
• Do they explain the reasoning, so that you can check it yourself?
• Would the advice still make sense if you had no hurry?

How pump and dump works on Telegram

1. 1Operators quietly buy a small, thinly traded stock.
2. 2Channels and videos promote it with a story and a target price.
3. 3Followers rush in, and the price jumps because few shares trade.
4. 4Operators sell to the incoming buyers.
5. 5The price falls back and the late buyers hold the loss.

If you were misled

• Report unregistered investment advice to SEBI through the SCORES portal (scores.sebi.gov.in).
• For fraud or lost money, call 1930 and report at cybercrime.gov.in.
• Report the channel or account on the platform as well.

Common questions