The Eastern Magistrates’ Court in Hong Kong today (Friday)
handed the first custodial sentence against a finfluencer, Chau Pak Yin, also
known as Chau Kin Hei, for providing unlicensed investment advice through a
paid Telegram chat group. The criminal prosecution was brought by the
Securities and Futures Commission.
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Regulators have increasingly warned about unlicensed
financial promoters. Last week, the UK’s Financial Conduct Authority cautioned
that some “finfluencers” promote unregulated offshore firms and unrealistic
returns, noting one
case in which more than 90,000 investors lost about £75 million.
Hong Kong Finfluencer Jailed for Telegram Advice
Chau received a six-week prison sentence and was ordered to
pay the SFC’s investigation costs. The court was told that between mid-April
and mid-May 2021, he operated a paid Telegram group that admitted members of
the public on a subscription basis.
During that time, Chau shared commentaries, recommendations,
and target prices on various securities and answered questions from paid
subscribers about the performance of Nasdaq-listed stocks. He charged US$200 per
month, earning US$5,580 in total.
Regulator Targets Social Media Investment Advice
The SFC’s Executive Director of Enforcement, Michael
Duignan, said the regulator “will have no hesitation in holding finfluencers
accountable when their provision of investment-related content and advice on
social media and online platforms constitute regulatory activities for which
they should have been licensed.”
He added that unlicensed finfluencers may not meet “the
SFC’s required standards of conduct and accountability,” potentially exposing
investors to “significant risks and harm.”
Chau was remanded in custody after his bail application was
denied pending his intended appeal against the conviction and sentence.
UK, UAE Regulators Target Rogue Finfluencers
In September, the FCA criminally charged three
finfluencers for promoting high-risk CFDs on social media without
authorisation. They pleaded not guilty and will appear in court in October
2025.
The FCA noted CFDs are complex leveraged products, often
resulting in losses for retail investors. This follows a broader crackdown on
“rogue finfluencers,” including cease-and-desist letters, warning alerts, and
interviews, reflecting increasing regulatory scrutiny of social media-based
investment promotions.
Meanwhile, the UAE’s Securities and Commodities Authority has
become the first regulator to require a licence for individuals producing
financial content online, covering investment advice, market commentary, or
financial promotions through digital channels.
This article was written by Tareq Sikder at www.financemagnates.com.
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