OSC joins international regulators for Global Week of Action Against Unlawful Finfluencers

TORONTO – The Ontario Securities Commission (OSC) joined regulators from across the globe this week to crack-down on unauthorised finfluencers who are putting millions of social media users at risk by touting financial products or services illegally. The ‘Global Week of Action Against Unlawful Finfluencers’ involved regulators using a combination of tools and interventions, including in-person warnings delivered with law enforcement, interviews, evidence gathering, educational outreach, and consumer awareness programs to prevent people from investing after encountering misleading content.

“International relationships are vital in countering this growing issue, and we are pleased to have played an important part in disrupting harmful finfluencer activity,” said Bonnie Lysyk, Executive Vice President, Enforcement at the OSC. “The OSC’s recent research highlights the substantial influence social media personalities have on investor behaviour, underscoring the need for proactive intervention to protect investors.”

87 finfluencers and 9 issuers that hired finfluencers for stock promotions were reviewed by the OSC during the exercise. There was a spectrum in the quality and accuracy of information shared by finfluencers, with some providing investment advice without appropriate registration. Several finfluencers were found to have provided misleading information – particularly in the crypto space – among other issues.

The OSC wishes to thank the RCMP’s Integrated Market Enforcement Teams (IMET) for their assistance in this important exercise.

The OSC’s participation in this global exercise follows its own research and behavioural science experiments to understand the impact of finfluencers and develop strategies to combat misinformation. ‘Social Media and Retail Investing: The Rise of Finfluencers’ found that content on social media significantly influences retail investors’ attitudes and financial decisions.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets, and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at https://www.osc.ca.

Notes to Editors:

• Finfluencers are social media personalities who uses their platform to promote financial products and share insights and advice with their followers. Many are acting legitimately and not breaking any laws. Others are individuals who 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.
• The following regulators participated in the operation: Quebec’s Autorité des marches financiers (AMF), the BC Securities Commission (BCSC), the Alberta Securities Commission (ASC), the United Arab Emirates Securities and Commodities Authority (SCA), the Securities and Futures Commission of Hong Kong (SFC), the Australian Securities and Investments Commission (ASIC), the Commissione Nazionale per le Società e la Borsa (CONSOB), and the United Kingdom Financial Conduct Authority (FCA).

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