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Reality Check: UK Charges TV Stars Over Forex Scheme

Finfluencer, watch out.

Ludo Lugnani profile image
by Ludo Lugnani
Reality Check: UK Charges TV Stars Over Forex Scheme

In Short: UK regulators have charged former reality TV stars for promoting an unauthorised financial trading scheme on Instagram.

What's Going On?

Remember those familiar faces from Love Island and The Only Way is Essex? Well, nine of them have been charged by the Financial Conduct Authority (FCA) for pushing a risky forex trading scheme on Instagram. These influencers allegedly enticed their followers into a high-risk derivatives scheme linked to contracts for difference (CFDs), all without proper authorisation. Emmanuel Nwanze, the mastermind behind the scheme, paid these celebs to promote his trading advice account from 2018 to 2021.

What Does This Mean?

This move by the FCA is a clear shot across the bow at "finfluencers" – influencers dabbling in financial promotions without the right credentials. Promoting unauthorised financial products isn’t just a slap on the wrist; it's a serious crime under UK law, with penalties including hefty fines or even prison time. The case spotlights the potential dangers of social media’s influence in financial markets, particularly when followers are left in the dark about the risks involved.

By going after these high-profile figures, the FCA is making it clear that regulatory compliance is non-negotiable. The spotlight also returns to the 2019 restrictions on CFDs, notorious for their high risk and the fact that many investors end up losing money.

The defendants are gearing up for their day in court, and the outcome could set a new standard for how financial promotions are regulated on social media. For fans and followers, this serves as a stark warning: don’t take financial advice from your favourite TV stars without doing your homework first.

How does this impact Law Firms?

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by Ludo Lugnani

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