Sri Lanka’s Securities and Exchange Commission (SEC) has issued a strong public warning against individuals and social media influencers who promote investment advice without being formally registered or licensed, as regulators intensify efforts to curb the rapid rise of online financial scams.
The regulator stressed that investment recommendations shared through digital platforms—whether presented as tips, predictions, or guidance must not be made without proper regulatory approval.
“Social media content that amounts to investment recommendations must not be made without proper basis and without being a Registered Investment Advisor or a body licensed by the SEC,” the Commission said, noting that unauthorized advisors will face severe penalties.
The watchdog reiterated that violations of the SEC Act are prosecutable before the High Court, with offenders facing fines of not less than Rs. 10 million, imprisonment of up to ten years, or both. According to the regulator, these measures are essential to protect small investors who are increasingly exposed to unverified and often misleading online content.
The SEC highlighted that many inexperienced investors have been misled by self-styled online “experts” who promote unsolicited stock tips through platforms such as Facebook, YouTube, WhatsApp, and Telegram.
Authorities warn that some of these individuals engage in manipulative practices that can distort market behaviour, while others misuse the credibility of social media to draw people into high-risk or fraudulent schemes. The trend, the SEC noted, has resulted not only in significant financial losses but has also weakened public trust in regulated financial markets.
Reinforcing the SEC’s warning, the Central Bank of Sri Lanka (CBSL) has raised red flags over a new online pyramid scheme operating under the name “SGO/sgomine.com”.Following investigations, the Central Bank confirmed that the entity is conducting and promoting a prohibited scheme in violation of the Banking Act.
The regulator reminded the public that pyramid and Ponzi schemes often disguised as cryptocurrency platforms, trading apps, or digital investment opportunities are illegal, and both the operation and promotion of such schemes are criminal offences.
The Central Bank also released an updated list of entities determined to be engaged in prohibited pyramid-type activities, including Tiens Lanka Health Care, Best Life International, Mark-Wo International, Global Lifestyle Lanka, Fast3Cycle International, OnmaxDT, Sport Chain app, MTFE App and related groups, Fastwin, Fruugo Online App, Qnet/Questnet, Ride to Three Freedom, Era Miracle, Beecoin App, The Enrich Life, Windex Trading, Smart Win Entrepreneur, Net Fore International/Netrrix, Pro Care and several other affiliated entities.
Regulators have urged the public to exercise extreme caution and avoid falling prey to schemes promising extraordinary returns with little or no real economic activity.
Both the SEC and CBSL emphasised that legitimate investment opportunities are always conducted through licensed institutions, and encouraged the public to verify credentials before acting on any financial advice shared online.
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