Social media influencers with a combined Instagram following of 4.5 million people have been charged in connection with promotions of unauthorized investments.
The Financial Conduct Authority (FCA), the City watchdog, has levied charges against individuals, including Lauren Goodger from the reality show “The Only Way is Essex,” and Biggs Chris, a former contestant on “Love Island.” This move comes after warnings from the FCA that it would crack down on misleading posts by so-called “influencers.”
The FCA alleges that Emmanuel Nwanze, 30, and Holly Thompson, 33, operated an Instagram account under the handle @holly_fxtrends. The account purportedly offered advice on buying and selling investments known as contracts for difference (CFDs) without the required authorization from the regulator.
Contracts for difference are high-risk investments used to speculate on the price movements of assets, such as foreign currencies. The FCA emphasizes that the majority of investors, approximately 80%, incur losses due to the inherent risks associated with CFDs.
Mr. Nwanze is accused of orchestrating the foreign exchange trading scheme and disseminating unauthorized financial promotions. The FCA alleges that he paid social media influencers to endorse @holly_fxtrends to their Instagram followers.
Love Island alumni Jamie Clayton, Rebecca Gormley, and Eva Zapico, along with Towie’s Yazmin Oukhellou, and Geordie Shore’s Scott Timlin are among those implicated.
Mr. Nwanze, Ms. Thompson, and the influencers involved have been charged with unauthorized communications of financial promotions. Additionally, Mr. Nwanze faces one count of breaching the general prohibition under the Financial Services and Markets Act 2000, which prohibits individuals from conducting regulated activities in the UK without proper authorization.
If convicted, the defendants could face imprisonment for up to two years. They are scheduled to appear before Westminster Magistrates Court on 13 June.
This development underscores the FCA’s commitment to safeguarding consumers from potentially harmful financial promotions and reinforces the importance of transparency and compliance within the influencer marketing sphere.
