India's demat account base has expanded from about 40 million in 2020 to over 170 million today, making stronger regulatory oversight more critical than ever
NEW DELHI: SEBI issued an ex-parte interim order on July 24 against Stark Investments and associated entities for running unregistered investment advisory and portfolio management services. The order, among the regulator’s strongest enforcement tools, immediately froze the entities’ bank and demat accounts, banned them from the securities market and directed the removal of all promotional material used to solicit clients.
While the case itself centres on one operator, it reflects something genuinely encouraging: SEBI’s growing willingness to act swiftly and decisively against illegal advisory operations at a time when India’s retail investing base has expanded dramatically.
Why This Kind of Enforcement Matters
India’s demat account base has grown from around 40 million in 2020 to over 170 million today, an extraordinary influx of first-time investors into equity and derivatives markets. This rapid growth naturally outpaced the supply of certified, registered financial advisors, creating space that unregistered operators sought to fill through platforms like Telegram, WhatsApp and Instagram.
The good news is that SEBI has responded to this challenge with increasing sophistication. Ex-parte interim orders of the kind issued against Stark Investments, allow the regulator to act immediately when investor harm is ongoing, freezing assets before they can be dissipated rather than waiting through lengthy preliminary proceedings that could give bad actors time to move funds offshore or into other jurisdictions.
A Track Record of Serious Follow-Through
Stark Investments is not an isolated case and that is precisely the point. In December 2025 SEBI moved against Avadhut Sathe Trading Academy, impounding over ₹546 crore collected from more than 337,000 students who had been given real-time trading calls disguised as educational content. Earlier, the regulator acted against “Baap of Chart,” a prominent finfluencer, impounding over ₹17 crore in illicit gains. Just this July alone, SEBI issued enforcement action against Shree Sai Proficient Financial Services and completed recovery proceedings against Rocket Tips, alongside separate front-running crackdowns involving Madhav Stock Vision and entities linked to Axis Mutual Fund.
This consistent cadence of enforcement, spanning unregistered advisory, portfolio management violations and market manipulation, shows a regulator working across multiple fronts simultaneously rather than treating these as isolated incidents.
Smart Structural Reforms Alongside Enforcement
Beyond individual enforcement actions, SEBI has also built structural safeguards to reduce the profitability of illegal operations at their root. Since 2024 the regulator has prohibited SEBI-registered intermediaries, including stockbrokers and mutual funds, from partnering with or paying unregistered finfluencers, cutting off a major revenue channel that previously helped illegal operators reach large audiences through legitimate platforms.
Additional rules restrict how educational content can reference specific stocks or use live market data, making it harder for bad actors to disguise stock tips as harmless investor education. While determined operators inevitably adapt by shifting to private groups or rebranding their offerings as “masterclasses,” these structural changes meaningfully raise the cost and complexity of running an illegal advisory operation.
Clear Tools Now Exist for Investors
Perhaps most encouragingly retail investors today have straightforward, accessible ways to protect themselves. Verifying an advisor’s registration takes just a few minutes through SEBI’s official intermediary portal or the BSE-managed IAASB portal, checking for legitimate registration prefixes like INA for investment advisers or INP for portfolio managers. Clear red flags, such as promises of guaranteed returns, requests to transfer funds into personal accounts or profit-sharing fee structures that violate SEBI’s caps, are now well documented and increasingly well publicised.
For any investor who has already been affected, formal channels exist through SEBI’s SCORES 2.0 portal and dedicated investor helplines, alongside cybercrime reporting mechanisms for cases involving outright fraud. These systems, while not able to guarantee full recovery in every case, ensure that complaints are formally logged and fed directly into the regulator’s ongoing enforcement pipeline.
A Regulator Moving in the Right Direction
Some challenges remain, including operators who resurface under new names after enforcement action and appellate proceedings that occasionally slow the finality of asset freezes. But taken as a whole, the pattern emerging from 2025 and 2026 shows a securities regulator that is proactively expanding its enforcement toolkit, closing structural loopholes and building investor awareness simultaneously.
For India’s rapidly growing retail investor base, actions like the Stark Investments order serve as both a deterrent to bad actors and a reassuring signal that the institutions meant to protect them are increasingly capable of doing so effectively.
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