The City regulator, the Financial Conduct Authority (FCA), has initiated a crackdown on financial influencers, resulting in the removal of hundreds of social media posts and websites.
This international effort, involving authorities in the UK, Australia, Canada, Hong Kong, Italy, and the UAE, has led to three arrests in the UK.
While financial influencers (“finfluencers”) can legitimately offer financial insights, many operate outside legal boundaries. This includes dispensing unauthorized financial advice, failing to disclose inherent risks, and employing promotional tactics that deceptively portray lavish lifestyles.
The FCA’s actions involved 650 social media post removal requests, 50 website takedowns, seven cease-and-desist letters, and four finfluencer interviews.
FCA’s Steve Smart emphasized that finfluencers must adhere to regulations and only promote financial products within their authorization limits.
Beth Harris, FCA’s head of financial crime, highlighted a common tactic: finfluencers showcasing opulent lifestyles to promote paid trading schemes, often falsely claiming superior algorithmic trading strategies. Such activities require authorization, she stressed.
Accountant Abi Foster praised the FCA’s action, noting the significant financial and emotional toll on individuals misled by these influencers. She emphasized the need for reliable online financial education, particularly for young people.
Although the FCA can request content removal from social media platforms, it lacks enforcement power. The regulator urged platforms to expedite their response to takedown requests.
This plea follows a Treasury Committee letter to Meta, questioning its response time (up to six weeks in one instance) to FCA takedown requests. Meta responded that this was an isolated incident that has been resolved.
On Tuesday, the Treasury Committee will question FCA CEO Nikhil Rathi on cryptoasset regulation. Friday’s announcement proposes lifting the ban on crypto exchange-traded notes for retail investors, reversing a 2021 decision and allowing individual investment in crypto-tracking products.
Additional reporting by Yasmin Malik
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