ASIC’s win against self-proclaimed ASX Wolf shows finfluencer’s days of flouting the law are numbered

ASIC says taking down the ASX Wolf is only the start of a crackdown on dodgy ‘finfluencers’.

Self-described “ASX Wolf” Tyson Scholz maintained a lavish online persona.

The corporate regulator’s case against “ASX Wolf” Tyson Scholz is only the beginning of enforcement action against so-called “finfluencers” who push the bounds of legal behaviour, after it laid down the law earlier this year.

The Australian Securities and Investments Commission has flagged plans to push forward in policing social media influencers who trade in personal finance advice, telling The Australian finfluencers would have to abide by the law.

ASIC recently wrapped up a landmark case against Mr Scholz, who offered training courses and access to private online forums, and provided advice on sharemarket investments.

The Federal Court found Mr Scholz had been operating a ­financial services business without a licence, after the regulator alleged he was manipulating his followers to pump the price of listed equities.

Federal Court judge Kylie Downes said Mr Scholz’s Instagram account was a key pillar of his law-breaking, finding that, although he did not make any “overt recommendation to acquire the shares: it was enough that Mr Scholz referred to a company or its shares in the stories, which was usually done in a way which indicated that he liked that company”.

ASIC market supervision senior executive leader Calissa Aldridge said the judgment against Mr Scholz “reaffirms the position that is clear in the law and that we’ve been reiterating in our work in the last couple of years”.

“When you’re carrying on a business related to financial services in Australia you need to be ­licensed,” she said.

“It makes it clear that opinions and recommendations don’t need to be overt. Brokers, advisers, managed funds – all licensees should think about how they’re using influencers to promote their product or service.”

Several finfluencers told The Australian they were closely watching the Scholz case and ­assessing what the judgment meant for them.

ASIC has been banging the drum for some time now that social media influencers must hold an Australian Financial Services Licence if they present recommendations or opinions about ­financial products.

The regulator issued an information sheet in March in a bid to put finfluencers on notice about their obligations and indicate ASIC’s intentions. ASIC also called in a group of finfluencers for meetings.

“We’ve been actively engaging with a range of different financial influencers and we’ve been transparent about undertaking surveillance activities,” Ms Aldridge said. “There were a lot of people operating without understand how the law operates. It was about setting out the guardrails.”

Following the meetings several finfluencers gained AFSLs, while others stopped posting.

Ms Aldridge said ASIC had noted a 15-30 per cent decline in the number of financial keywords on prominent social media platforms and groups after putting out its information sheet. Several others added financial services guides to their sites.

The regulator went further in November when it announced it would be targeting “misconduct that involves misinformation through social media about investment products, including ‘finfluencer’ conduct”.

Not every finfluencer and financial social media poster has been dissuaded by the regulator’s warnings. ASIC’s market supervision team has been monitoring several Telegram, WhatsApp, Discord, and Twitter groups that have been sharing stock tips or even encouraging members to collude to pump stock prices.

The Australian has previously revealed how ASIC was tipped off to a 400-strong Telegram group by UTS professor Talis Putnins that was pumping the shares.

ASIC stepped into the chat, warning members they were being watched, but has since refrained from intervening.