The Australian Securities and Investment Commission (ASIC) warns unlicensed social media influencers to give financial advice. The corporate watchdog said that these influencers will face five years in jail if they break the law.
The Australian Securities and Investment Commission (ASIC) issued an information sheet about so-called ‘’ influencers’’ on Monday. The warning came as these influencers promise big returns dreams. Also, recommend that the investments are as good as putting money in the bank. However, most of them are misguided and negatively impact the audience.
Online Brokers
Moreover, these influencers earn money through affiliate links they send to the readers. These links take the readers to online brokers providing financial services but without a license. According to the Asic survey conducted last year a third of Australians between 18 and 21 followed on social media. Moreover, a further 64% were seen a change in behaviour due to influencers’ posts.
Asic is suing Tyson Scholz in federal court for not having a license and operating financial services. He delivers training courses and seminars about trading in securities on ASX. Moreover, he offers stock tips and access to the discord chat server Black Wolf Pit.
ASIC Action
ASIC Commissioner, Cathie Armour said, ‘’ It is crucial that influencers who discuss financial products and services online comply with the financial services laws. If they don’t, they risk substantial penalties and put investors at risk.’’
Aleks Nikolic, a 27-year-old influencer who post-financial investment content welcome the initiative, and said, ‘’ I think it’s some of their clearest and best comms they’ve put out, potentially ever.’’ She added, ‘’ I think they’ve taken on a lot of comment, that certainly I’ve made in the past, that it was confusing and the target market was sophisticated companies with legal teams that could craft policies.’’
In the end, the actions by Asic save consumers from harm such that happened in crypto schemes, pump and dump schemes.