Stars from reality TV shows “Love Island” and “The Only Way is Essex” (Towie) are among nine people charged by the UK Financial Conduct Authority.
“Towie” stars Yazmin Oukhellou (pictured), 30, and Lauren Goodger, 37, former “Love Island” contestants Biggs Chris, 32, Jamie Clayton, 32, Rebecca Gormley, 26, and Eva Zapico, 25, and Scott Timlin, 36, a former winner of “Celebrity Big Brother”, have all been charged in connection with promoting unauthorised trading schemes on Instagram.
The FCA alleges that the reality TV stars, who have a combined audience of 4.5 million followers on Instagram, were recruited to promote an account which “offered advice on trading high-risk foreign currency”, Reuters reported.
If found guilty of issuing unauthorised communications of financial promotions in violation of the Financial Services and Markets Act 2000, they could receive a fine and be sentenced to up to two years in jail.
Emmanuel Nwanze, who allegedly ran the trading scheme, and another “finfluencer”, Holly Thompson, will also appear before Westminster Magistrates’ Court on 13 June.
Back in March, the FCA introduced new guidance aimed at regulating the behaviour of so-called “finfluencers” – social media personalities who issue financial advice and tips to their followers.
Nearly two-thirds of 18 to 29-year-olds follow “finfluencers” on social media, the Financial Times said, and 74% of those who do said they trust the advice they share.
The decision to charge the social media stars paid to promote the scheme as well as the alleged operators is a “landmark move”, said MoneyWeek, and speaks to the FCA’s concerns that the use of familiar figures “could encourage people to invest in products they don’t understand”.
Laura Suter, director of personal finance at AJ Bell, told the publication that the “high-profile” case was “no doubt intended to send a message to other influencers”.
The FCA said anyone who believed they may have sustained a loss due to the scheme the TV stars promoted should contact its consumer centre.