The UK Financial Conduct Authority (FCA) is urging lawmakers to develop legislation aimed at addressing the activities of Big Tech companies and financial influencers, or “finfluencers,” who promote unauthorized financial schemes.
During a Treasury Select Committee inquiry focused on the influence of finfluencers in the financial markets, Steve Smart, the FCA’s director of enforcement, and Lucy Castledine, director of consumer investments, expressed concerns over the lack of accountability among Big Tech firms in managing harmful content related to unsuitable investments shared on their platforms.
Castledine highlighted the challenge posed by finfluencers who evade regulatory actions by simply opening new accounts after being asked to close down their current ones. “We cannot allow this content to resurface within hours,” she emphasized. “Currently, we must request individual account removals, but Big Tech possesses the technology to take a more proactive stance. If they don’t, we’ll remain caught in a never-ending cycle.”
Additionally, the issue of social media influencers unlawfully promoting investment products to their followers has become increasingly pressing. The FCA has charged numerous finfluencers for marketing unauthorized trading schemes, but it has yet to secure a conviction.
Under existing legislation, social media influencers found guilty of illegal activity face imprisonment of up to two years, a penalty the FCA deems insufficient. The authority is advocating for a revision of the law to potentially increase the maximum sentence to five years.
“At its core, this content is illegal,” Castledine stated. “It is at the heart of many individuals losing their money. This is a persistent issue and a growing trend. Urgent action is necessary.”