The Australian Federal Court has found Tyson Scholz, a social media 'finfluencer' famous for the name ASX Wolf, in violation for breaching the country's financial market laws.
The judgment came on civil complaints from the Australian Securities and Investments Commission (ASIC ). He was blamed for providing financial advisory between march 2020 and November 2021 without having a mandatory Australian financial services license.
ASIC Takes Aim at ASX Wolf Tyson Scholz
Scholz provided trading courses and seminars on ASX-listed equities . In addition, he offered share purchase recommendations on private online forums and Instagram, where he had more than 20,000 followers.
He posted photos of expensive cars with the license plates 'ASX Bull' and photos of costly boats. He used these posts as bait for his trading courses and seminars.
"Financial services laws exist to protect investors if something goes wrong," said ASIC's Deputy Chair, Sarah Court. "The individuals who paid Mr Scholz for his tips, to attend seminars or access private online forums, as well as those individuals who purchased shares based on his recommendations or statements of opinion, did not have the benefit of these protections."
Scholz's offerings were also structured: he offered three stages of memberships and subscriptions to his services. The higher tired packages even provided subscribers with one year of access to a private Discord chat group named 'Black Wolf Pit'.
ASIC Cautions Against 'Finfluencers' like ASX Wolf Tyson Scholz
The regulatory watchdog's action came after warning against the practices of financial influencers or 'finfluencers' who provide financial advisory by showing off their luxurious lifestyle. ASIC even threatened these illegal influencers with possible jail term and penalties of up to AU$1 million and even cautioned Aussie companies from associating with such unlicensed 'finfluencers'.
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On top of that, the court highlighted that even if the 'finfluencers' do not make any "overt recommendation to acquire the shares," indirect indications will put them under the purview of the existing licensing regime.
"The financial product advice given by Mr Scholz formed an integral part of this business. The advice which was given by him was not a one-off but formed part of the continuous and systemic business operations by which Mr Scholz derived profit," the court stated.
