UK regulator leads crackdown on 'finfluencers'
LONDON: Market regulators from six countries are cracking down on the illegal promotion of financial products by influencers on social media, UK officials said Friday.
Britain's Financial Conduct Authority (FCA) said the action, which began on Monday, has resulted in three arrests in the UK and the authorisation of criminal proceedings against three individuals.
Some 50 "warning letters" have also been issued, which will result in more than 650 requests to remove content from social media platforms and more than 50 websites "operated by unauthorised finfluencers", the FCA added.
It has also sent seven "cease and desist" letters, and invited four so-called finfluencers for interviews.
"Our message to finfluencers is loud and clear," said Steve Smart, joint executive director of enforcement and market oversight at the FCA.
"They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences."
The crackdown is being conducted jointly with regulators from Italy, Canada, Hong Kong, Australia, and the United Arab Emirates.
So-called finfluencers, or financial influencers, use their social media audiences to promote investment products, share advice, or offer their opinions on investments.
Many act legitimately, but some "tout products or services illegally and without authorisation through online videos and posts, where they use the pretence of a lavish lifestyle, often falsely, to promote success", according to the FCA.
These products can be risky, such as cryptocurrencies.
The announcement came as a group of British MPs said it had sent a letter to Meta, owner of Facebook and Instagram, asking for information on its approach to financial influencers.
The letter from Parliament's Treasury Committee follows evidence from FCA officials that Meta took up to six weeks to remove harmful content, longer than other platforms.
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