A Hong Kong court has imprisoned a finfluencer who provided unregulated investment advice on Telegram.
Shutterstock.com/Shing Chan
Hong Kong’s Securities and Futures Commission (SFC) confirmed today that the Eastern Magistrates’ Court convicted Chau Pak Yin for providing investment advice on a Telegram group chat he hosted without a licence.
The court heard that between April and May 2021, Chau operated a subscription-based Telegram group that charged members HK$1,560 (US$200) per month. Chau posted commentaries, recommendations and target prices on various securities and answered group questions regarding the performance of securities listed on the Nasdaq.
He will serve a six-week prison sentence and pay the SFC’s investigation costs. The regulator said Chau was remanded in custody after his bail application was rejected pending an intended appeal against his conviction and sentence. It marks the first time a finfluencer has been imprisoned in Hong Kong.
Michael Duignan, the SFC’s executive enforcement director 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”.
The SFC has set finfluencers in its sights this year, and in March took almost identical action against another individual. It suspended Wong Ming Chung, a finfluencer and licensed representative of SFC-regulated Tse’s Securities, for 16 months for providing investment advice in another Telegram subscription group.
Wong had pleaded guilty to carrying on a business advising on securities without proper authorisation. The court fined him HK$10,000 (US$1,250) and ordered him to pay the SFC’s investigation costs.
Global awareness of the threat posed by finfluencers has been growing. The SFC participated in a coordinated “week against finfluencers” in June, alongside counterparts from Australia, Canada, Italy, the United Arab Emirates and the United Kingdom.
The UK’s financial regulator has been particularly active in pursuing finfluencers, announcing last year it was interviewing 20 finfluencers under caution for potentially promoting financial services products on social media illegally. Six British reality TV personalities, some from Love Island and The Only Way is Essex, pleaded not guilty to promoting unauthorised trading schemes at a hearing in London last year after the FCA filed charges. The trials are slated for 2027.