Samir Arora sends up finfluencers’ disclaimers on stock-tips: “What’s left… management’s janam patri?”

A recent Sebi order stated that declaring an entity's unregistered status and claiming content is only for "educational purpose" will not be accepted as an explanation. (Photo by Ann H/Pexels)

Samir Arora, veteran investor and founder of Helios Capital, tweeted about the disclaimers put out by finfluencers to distance themselves from a stock recommendation they have made, terming that practice as meaningless.

It is common practice for finfluencers to discuss a stock idea or speak about a company in glowing terms, and then try to get around the Investment Adviser Regulations, by adding that their presentation should not be seen as advice. Many of the influencers are neither registered as an investment advisor or research analyst with the market regulator, which is a requirement if someone wants to talk about the specific stock idea.

“This stock is very good. Its results are very good. Its management is very good. Its valuations are very reasonable. After writing all this, influencers write: Not a recommendation,” wrote Arora, in his tweet on July 26.

“What is left for it to be indeed a reco - janam patri of management??” he asked.

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Among the comments posted in response, one from Ketan Sahney got a thumbs-up from Arora.

Sahney had written about the many, many disclaimers added by finfluencers to escape regulatory whip.

Sahney’s post read: "This is not a trade reco"

"I am not SEBI registered"

"This is for high risk takers"

"This is for educational purpose only"

"My trade is not your trade"

"Copy at your own risk".

He added, “Even mutual funds come with lesser disclaimers.”

A recent order from the Securities and Exchange Board of India (Sebi), which impounded fee collected by three entities for provided unregistered investment advice, stated that, "Merely making statements of this nature (that an entity is not Sebi registered and that the channel is only for educational purposes) cannot exonerate the Noticees when their actions reveal that they were and continue to be prima facie engaged in unregistered investment advisory services". The entities were also banned from the securities market until further notice.

Most of the comments were in support of what Arora had tweeted.

Chirag Khanchandani wrote, “I have seen posts which mention CMP, Entry and SL: all this with a side note - saying ‘for educational purposes’”.

However, there were the stray ones asking what is wrong with adding the disclaimer.

“He is giving reasonable disclaimer because he is not SEBI registered and making the reader self responsible for gains and losses. What is wrong here.,” asked Balanced Bull, whose Twitter bio says, “CA Practising Buy the Fear & Sell the Greed”.