Finance influencer ‘ASXwolf’ banned from operating or giving advice
A flashy Gold Coast-based ‘financial influencer’ landed on ASIC’s radar after gathering a huge following on his Instagram account where he promoted himself as a successful share trader.
Police & Courts
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Controversial “wolf trader” Tyson Robert Scholz has been banned from carrying on financial services business in Australia and blocked from running paid online trading advice groups.
The ruling, delivered on Thursday, follows the Federal Court in December finding the Gold Coast “finfluencer” had contravened the Corporations Act by engaging in financial services business without a licence.
The flashy Gold Coast-based “financial influencer” landed on the corporate watchdog’s radar after gathering a huge following on his Instagram account asxwolf_ts, where he promoted himself as a successful share trader.
Federal Court action brought by the Australian Securities and Investments Commission heard Scholz used his Instagram account to boast about his lavish lifestyle, posting images of exotic cars, speedboats and expensive champagne.
“The impression given by these posts and stories was that this lifestyle had been achieved by Mr Scholz as a consequence of his share trading on the ASX,” the court found.
“These posts appeared to be designed to encourage followers to see Mr Scholz as an expert in share trading who had achieved significant success.”
From early 2020, Scholz posted “stories” on his Instagram account about his share acquisitions with a likely consequence that followers would be influenced to buy shares and therefore increase the value of his own purchases.
In messages to a friend, Scholz described the posts as a “clever way of pumping”, telling them as long as he didn’t charge people for the information “that’s why (i) can get away with it”.
In mid-2020 he began selling private tips through Instagram for $500.
He also used the social media platform to promote online and in-person seminars in which he taught people how to trade on the Australian Securities Exchange.
He described the seminars Stage 1, with an offer to attendees to progress to Stage 2, which was an online group in which members paid $1000 a year to discuss share trades.
The group, hosted on the social media platform Discord, was described as the “Black Wolf Pit Channel” and Scholz would give advance notice to members of shares he would later promote on his Instagram stories.
Justice Kylie Downes on Thursday made orders restraining Scholz or anyone acting on his behalf from hosting paid membership groups in which members discuss share trades.
During the Federal Court hearing, ASIC’s lawyers asked the court to take into account Scholz still appeared to be promoting himself as an authority on trading, using the Instagram handle tysonscholz_asxwolf.
The private Instagram account boasts more than 20,000 followers, with Scholz’s profile describing him as a global equity trader offering “market-leading education learn-to-trade courses” and “teaching the world to develop and scale up” with a call to “DM (direct-message) now”.
But Justice Downes said that information was irrelevant to the proceedings.
“Mr Scholz may well be a global equity trader, and the fact that he operates learn to trade courses may or may not fall foul of the Corporations Act,” she said.
“And as to the ‘teaching the world to develop and scale up’, to the extent that one can ascribe any meaning to those words, again it doesn’t seem to add to or demonstrate that Mr Scholz is breaching the Corporations Act.”
Scholz, who had argued each party should bear their own costs of the proceedings, was also ordered to pay ASIC’s costs.
“Because in the end he lost, he lost on the two main issues of the case and lost the case overall…. and as a consequence it is appropriate Mr Scholz should pay ASIC’s costs,” Justice Downes said.
Scholz was not in court for the hearing of his matter and it is understood he is not in the country.
There is an outstanding warrant for his arrest over separate allegations in the Magistrates Court where is charged with offences of fraud and making false or misleading statements.
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