The British Columbia Securities Commission recently partnered with regulators worldwide to act against illegal finfluencers during the Global Week of Action Against Unlawful Finfluencers.
The event was held from April 20 to 24 and saw 16 regulators taking down online content, launching consumer awareness programs, and educating finfluencers on the applicability of securities regulations. The BCSC worked alongside securities regulators from Canada, Europe, South America, Asia, the Middle East, and Oceania in the second initiative of its kind.
The BCSC sent 14 letters to YouTubers and other finfluencers worldwide who touted publicly traded companies in the province. The letters outlined the compliance processes for rules involving the sharing of information likely to drive the buying, selling, or holding of company shares or other securities. Moreover, the securities commission released educational information and developed social media content for investors.
The BCSC said that global collaboration was key to regulators’ efforts to protect people from illicit financial promotions given their spread via social media.
“Finfluencers use social media platforms to share financial advice or investment tips. Many don’t possess formal financial education or credentials, and their advice – often accompanied by the trappings of a lavish lifestyle – may not always align with regulatory standards or individual investor needs,” the commission said in a statement. “Some finfluencers may tout products or services without regulatory authorization, or without properly disclosing that they are being compensated by the companies they mention.”
A BC-based finfluencer and his companies breached the province’s Securities Act earlier this year by promoting certain issuers without clarifying that it was sponsored; under the Act, any promotional content related to securities must clearly and conspicuously disclose if disseminated by or on behalf of a company or a shareholder in said company. The BCSC slapped the finfluencer with a notice of hearing over these claims.
Last year, the Alberta Securities Commission found finfluencer James Domenic Floreani guilty of violating Alberta's Securities Act because he failed to disclose that social media posts he made in line with investor relations activities were crafted on behalf of issuers.
The UK Financial Conduct Authority took point on this year’s Global Week of Action Against Unlawful Finfluencers.