The UK’s Financial Conduct Authority (FCA) has revealed that it made three arrests, launched criminal proceedings against three individuals, and issued seven cease-and-desist letters as part of its efforts to tackle “rogue finfluencers.” The regulator also published 50 warning alerts and invited four finfluencers for interviews.

FCA Takes the Lead

The figures were released as the FCA takes the lead among a group of nine global regulators working to protect social media users from illegal financial promotions. Other participants in the initiative include financial regulators from Australia, Canada, Hong Kong, Italy, and the United Arab Emirates.

The FCA noted that its alerts resulted in more than 650 takedown requests on social media, along with actions against over 50 websites operated by unauthorised finfluencers.

You may also like: Finfluencers Had a Good Run, but the Party may Fizzle Out

“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 regulator defines finfluencers as social media personalities who use their platforms to promote financial products and share advice or insights with followers.

While many finfluencers operate within the rules, the FCA warned that others “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.”

Traders Trust Finfluencers

A study conducted last year by CMC Markets found that 33% of traders said they were more likely to act on a trade when an influencer they follow flagged an opportunity.

Recently, the regulator in Dubai introduced a licensing requirement for individuals who produce financial content online, making it the first region to mandate such approval for influencers. The licence targets those offering investment advice, market commentary, or financial promotions through digital channels.

The UK does not currently require licences for finfluencers and has not signalled any plans to introduce such rules. However, the FCA continues to monitor the space and take action against those engaging in misleading or unauthorised promotion.

Source: Finance Magnates