The Alberta Securities Commission has determined that finfluencer James Domenic Floreani violated s. 103.1(2) of the Securities Act (Alberta) by failing to disclose that social media posts he made in line with investor relations activities were crafted on behalf of issuers.
In a decision issued on April 24, an ASC panel found that Floreani acted as a finfluencer from November 2020 to March 2022 despite not being formally educated in finance or investing. He recommended purchasing specific securities in posts on YouTube, X, and Patreon, presenting himself as knowledgeable, familiar, and competent with finance and investment terms. Public comments on his posts indicated that his audience was taking his advice.
However, several Floreani’s posts did not clearly and conspicuously disclose that they were being shared on behalf of four Alberta issuers. The Securities Act requires this disclosure so prospective investors can evaluate the objectivity of the information provided.
The ASC will issue sanction or cost recovery orders in the proceeding's second phase. The timeframe of subsequent steps will be determined after hearing from Floreani and Jayconomics Inc., as the respondents. The ASC and the respondents must advise each other and the registrar as to whether they plan to adduce new evidence related to appropriate sanctions and costs orders, as well as their expected timing and suggested dates.
The panel consisted of Kari Horn, Tom Cotter, and Karen Kim. Roger Baker represented Floreani and Jayconomics, while Richard Van Dorp and Matthew Bobawsky acted for ASC staff.
The ASC warned investors to verify advice and information accessed online, as they may not be provided by qualified individuals. It urged investors to ensure that the investment professionals, firms and online trading platforms they plan to use are registered, since registered individuals, firms, and platforms must be qualified to sell securities and adhere to securities laws and requirements like risk management, disclosure, and client-focused behaviour.
Finfluencers are creators of online content centered on finance, investment products, and providing advice.