The UK Financial Conduct Authority is calling on politicians to draft legislation to crackdown on Big Tech and finfluencers who promote unauthorised financial schemes.
Speaking at a Treasury Select Committee inquiry into the role of finfluencers in financial markets, Steve Smart, director of enforcement and Lucy Catledine, director of consumer investments at the FCA, lamented the failure of Big Tech firms to keep track of bad actors promoting unsuitable investments on their social media site.
Castledine said many finccluencers continued to operate even after the FCA requestesd that a social media account be closed down by simply switching to another acount.
“We can’t have that content popping up 12 hours later,” Castledine told MPs. “At the moment we have to submit individual account takedowns. The Big Tech platforms have got the technology to identify this; they need to be proactive about it otherwise we will be in a continued whack-a-mole.”
Mixed in with this is the role of 'finfluencers' on social media sites who illegally promote financial investment products to their followers. The watchdog has so far charged a host of such finfluencers with promoting an unauthorised trading scheme but has yet to secure a single conviction.
Under current laws, social media influencers found guilty of acting illegally face up to two years in prison.
The FCA believes that this is an insufficent deterrent and is calling for legislation to be amended to extend the maximum term to five years.
“Fundamentally this content is illegal,” Cstledine told MPs. “It is driving people into parting with their money. It is very much a recurring theme we are seeing and it is a growing trend. We need people to sit up and take action.”