A new version of stock touts has emerged over the past decade that has increasingly caught the attention of local securities regulators.
The B.C. Securities Commission announced June 6 it has issued 76 "warning letters" to YouTube creators around the world who may have promoted B.C. public companies without making proper disclosures to their audience.
Additionally, the commission said in a release its staff hand-delivered a caution letter to an unnamed Vancouver-area “finfluencer” about potentially unregistered activity, while also directing him to get legal advice before promoting securities-related services.
A so-called finfluencer is a person who uses social media platforms to share financial advice or investment tips.
“They often don’t possess formal financial education or credentials, and their advice—often accompanied by the trappings of a lavish lifestyle—may not always align with regulatory standards or individual investor needs,” the BCSC said.
“Some finfluencers may tout products or services without regulatory authorization, or without making proper disclosure that they are being compensated by the companies they mention.”
The letter-writing campaign is part of what the commission calls a “crackdown” on these unauthorized finfluencers who are “putting millions of social media users at risk by touting financial products or services illegally.”
The campaign was organized internationally by Britain’s Financial Conduct Authority during the Global Week of Action Against Unlawful Finfluencers, the commission said.
The commission joined other Canadian regulators, as well as securities regulators in the United Kingdom, Australia, the United Arab Emirates, Hong Kong and Italy, in targeting these finfluencers.
Under B.C.’s Securities Act, any promotional content related to securities must clearly and conspicuously disclose if it’s disseminated by or on behalf of a company or someone who owns shares in that company. Failure to comply can lead to penalties.
That was the case in 2023 when a commission hearing panel fined an online stock promotion company $50,000 for illegally promoting five small public companies that paid the promoter more than half a million dollars.
Stock Social and CEO Kyle Alexander Johnston they repeatedly violated regulations of the B.C. Securities Act by not adequately disclosing that it distributed online advertorials through social media platforms.
Stock Social was fined $50,000 and Johnston was fined $25,000.
Neither have paid those fines to the BCSC, according to its sanction payment status list as of June 6.
