Asmita Patel, famously known as the "She-Wolf of the stock market," faces a major setback as the Securities and Exchange Board of India (Sebi) clamps down on her unregistered trading advisory activities. Patel, who amassed a significant following of over 500,000 subscribers on YouTube and hundreds of thousands more on Instagram, allegedly provided stock market tips without the necessary registration. Sebi's action came after 42 participants reported trading losses and demanded compensation.
Patel, along with her husband Jitesh, directed students and investors to trade specific stocks through their advisory firm. From this activity, she accrued a modest trading profit of just over $13,700 (£10,800) over the past five years. Meanwhile, her real earnings came from selling courses, from which she made more than $11.4 million (£9 million). These courses, marketed at fees running into thousands of rupees, positioned Patel as a key player in a growing trend where influencers leverage their online presence for financial gain.
Sebi's intervention has led to a ban on Patel and six associates from trading. The regulator alleges that Patel disguised illegal stock tips as investor education, a move that has prompted it to seize millions of rupees earned from course fees between 2021 and 2024. This case highlights a broader issue within India's rapidly growing online trading community—online trading accounts surged from 36 million in 2019 to over 150 million last year, according to brokerage Zerodha.
Patel's mission to "make India trade" underscores the allure and risk of such ventures. However, it has sparked a wave of criticism and legal scrutiny as thousands of investors have accused high-profile influencers of fabricating success stories to sell courses and earn lucrative brokerage referrals. In response, Sebi has banned at least a dozen influencers, including a Bollywood actor, from offering trading advice.
The situation reflects the complexities in Sebi's regulatory framework. New rules have created confusion about the boundaries of legal trading advice and the role of influencers in promoting financial products. Veteran financial journalist Sucheta Dalal commented on the delay in regulatory action:
"It should have acted a few years ago when trading sites started paying influencers to promote their products. Now this phenomenon has become too big" – Sucheta Dalal
Patel's use of private Telegram channels and Zoom calls for selling tips without mandatory registration adds another layer to the regulatory challenges facing Sebi. The case serves as a cautionary tale for both regulators and investors about the potential pitfalls of the burgeoning influencer economy in the finance sector.