Sebi has sent a strong message to financial influencers, or ‘fin-fluencers’, with its first action coming against PR Sundar, known for providing investment advice. The regulator has directed Sundar, his company Mansun Consultancy and Mangayarkarasi Sundar to disgorge Rs 6.07 crore, including interest at 12% per annum from June 1, 2020 till the date of submission of the settlement terms.
The case relates to Sundar and Mangayarkarasi, promoters of Mansun Consulting, offering investment advice without the necessary registration from the regulator.
Sundar has settled the case with Sebi. Under the settlement, the three entities have agreed to a settlement amount of Rs 15.6 lakh each i.e. a sum of Rs 46.8 lakh to Sebi. They have also agreed on a disgorgement amount of Rs 6.07 crore.
They will refrain from buying, selling, or otherwise dealing in securities for one year from the date of passing of the settlement order. Following the settlement, Sebi won’t initiate any action against Sundar.
Sundar has over a million followers on YouTube and hundreds of thousands on Twitter. According to reports, Sundar allegedly posts screen shots of only his profitable positions, and fakes or deletes those when trades go against him.
According to the order, Sebi had received two references inter alia alleging that Sundar was providing advisory services without obtaining the requisite registration from the regulator. The two, along with Mansun, were served a show-cause notice in May last year, and a supplementary show-cause notice in November.
The regulator’s examination revealed that he was running a website, http://www.prsundar.blogspot.com, offering packages for advisory services. Fees were received via a gateway linked to the bank account of Mansun Consultancy.
“The website, http://www.prsundar.blogspot.com, had posts from August 27, 2013 onwards. It has a tab titled “Advisory” wherein the following is mentioned: ‘Advisory services – Daily calls on Telegram: We will be giving daily calls on what positions to take, adjustments, etc. on telegram messaging app’. The website also provided a payment link including a Razorpay link,” read the Sebi order.
The probe also identified Mangayarkarasi Sundar as the fellow promoter-director of the company with a 50% shareholding. The firm had received close to Rs 4.6 crore in lieu of investment advice for dealing in securities.
On inquiry, Mansun submitted a list of recommendations it had provided for January 2021. “Upon analysis of a sample of such recommendations, it is observed that the aforesaid recommendations are related to purchasing/selling/dealing in securities that were communicated to the clients. Therefore, it was alleged that the recommendations provided by Mansun fall under the category of ‘investment advice’ as defined under Reg. 2 (1) (l) of SEBI (Investment Advisers) Regulations, 2013,” stated the order.
They were called upon to show cause as to why suitable directions — including refund of fees collected, debarment, non-association with listed entities, intermediaries, and imposition of monetary penalty — should not be issued. However, during the proceedings, there were three applications for settlement filed by these entities as per the Sebi (Settlement Proceedings) Regulations, 2018.
