Three 'finfluencers' are to face trial in a London court, accused of illegally encouraging social media followers to invest in high-risk foreign exchange trading.
The prosecutions come after financial regulators across the globe, including the UAE, took part in a week of action targeting unlawful financial promotions.
Finfluencers are social media personalities who use their platforms to promote financial products and share insights and advice with their followers.
Many act legitimately without breaking any laws but others tout products or services illegally and without authorisation through online videos and posts. They often target younger social media users through the pretext of a lavish lifestyle, often fabricated, to promote success.
As part of the global crackdown, the UK’s Financial Conduct Authority (FCA) began criminal proceedings against Charles Hunter, 29, Kayan Kalipha, 35, and Luke Desmaris, 30. There is no suggestion in Wednesday's hearing that the three men were involved in transactions in the UAE.
All three are alleged to have encouraged social media followers to invest in foreign exchange trading through high-risk products known as Contracts For Difference (CFDs), without having the authorisation to promote these investments.
They all appeared at Southwark Crown Court in London, charged with one count of communicating an invitation to engage in investment activity, contrary to section 21(1) of the Financial Services and Markets Act 2000. If found guilty, they face up to two years in prison, as well as a fine.
All three will now face separate trials in 2027, but lawyers for Mr Hunter and Mr Kalipha, and Mr Desmaris, who is representing himself, have indicated they will seek to have the charges dismissed.
When they appeared at Westminster Magistrates last month, they all indicated they would plead not guilty. As well as the UAE and the UK, regulators from Australia, Canada, Hong Kong, and Italy took part in the week of action, which began on June 2.
About the same time, the UAE introduced a new licensing regime for 'finfluencers', the first in the Middle East. This requires anyone providing financial content to obtain a licence from the Securities and Commodities Authority.
The FCA in the UK has sought more than 650 takedown requests on social media platforms and more than 50 websites operated by unauthorised people.
The Contracts For Difference products allow traders to profit from price movements without owning the underlying asset. The FCA has previously said that 80 per cent of customers lose money when investing in them because of the risks. They often depend on debt to amplify returns, which can result in investors losing more than they invested.
In the UK, the FCA has imposed restrictions on how CFDs and CFD-like options can be sold and marketed to retail customers.
