The Financial Conduct Authority [FCA], the UK’s financial watchdog, has interviewed 20 “finfluencers,” aka financial influencers, under caution.
According to a new report by The Guardian, these influencers were voluntarily interviewed under the FCA’s criminal arm. The reason the FCA targeted them was because they were promoting foreign exchange and contracts for difference (CFD) trading.
Per The Guardian, CFD trading is considered a high-risk investment. This is because it involves betting on the price of an asset in advance. The asset, in this case, is the price of foreign currencies.
“The latest action demonstrates that the FCA is taking the social media threat seriously and prepared to take criminal enforcement action decisively and at pace,” Natalie Sherborn, a partner at Withers law firm, told The Guardian. “Individuals and firms should take heed.”
The Financial Conduct Authority remains suspicious of finfluencers
According to The Guardian, the FCA is worried that this isn’t the only illegal activity finfluencers are engaging in. Allegedly, they’re also promoting debt solutions and credit lending. In light of this, the FCA says it is continuing its investigation.
On its dedicated warnings page, The FCA has also issued 38 alerts against some of the specific social media accounts of finfluencers.
“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt,” Steve Smart, joint executive director of enforcement and market oversight at the FCA, told The Guardian.
“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.”
